A federal grand jury has unveiled a staggering indictment against two former top executives of a Colorado-based medical device company, alleging a complex fraud scheme that prosecutors claim bilked hundreds of millions of dollars from patients, insurance providers, and investors. The charges brought against Thomas Sandgaard, 67, the former Chief Executive Officer of Zynex Inc., and Anna Lucsok, 39, the company’s former Chief Operating Officer, paint a picture of a multifaceted operation designed to fraudulently inflate company revenues and deceive stakeholders on a massive scale. According to the indictment, the pair orchestrated a scheme that involved fraudulent billing for over $873 million worth of Zynex products over a period stretching from 2017 to late 2025. This case highlights the significant vulnerabilities within the healthcare billing system and the extreme lengths to which corporate leaders may allegedly go to manipulate financial appearances for personal and corporate gain, ultimately leading to significant legal and financial repercussions.
A Deep Dive into the Alleged Scheme
The central pillar of the prosecution’s case is an elaborate healthcare fraud operation that systematically billed for medically unnecessary products, creating a deceptive revenue stream that formed the basis of the entire scheme. Investigators allege that a substantial portion of the fraudulent billing, amounting to more than $600 million, was for medical supplies, specifically electrode pairs used with the company’s electrotherapy devices. These supplies were purportedly shipped in excessive quantities far beyond what patients required. The indictment details a persistent pattern of over-shipment that allegedly continued despite receiving numerous objections from employees within the company who raised concerns about the practice. Furthermore, the company faced a barrage of complaints from patients filed with consumer protection organizations like the Better Business Bureau, all of which reportedly went unheeded by the executive leadership. This consistent disregard for internal warnings and external complaints suggests a deliberate strategy to maximize billings against both private and federal insurance programs, regardless of patient needs or ethical guidelines.
The alleged fraud served a dual purpose that extended beyond illicit healthcare billing into the realm of high-stakes financial markets. Prosecutors contend that the artificially inflated billing numbers were a key component of a conspiracy to commit securities fraud. By reporting these falsified revenues, Sandgaard and Lucsok allegedly presented a misleadingly robust financial picture of Zynex Inc. to the public and the investment community. This deception was designed to artificially boost the company’s stock price, creating a facade of rapid growth and profitability. The scheme effectively linked the over-billing of patients and insurers directly to the perceived value of the company on the stock market. This strategy not only defrauded healthcare payers but also lured investors into purchasing stock at inflated prices based on financial data that did not reflect the company’s true performance, compounding the fraudulent activities and widening the circle of victims to include shareholders who were deceived by the manipulated figures.
Retaliation and Corporate Fallout
The indictment reveals a darker, more personal dimension to the case, detailing shocking allegations of extreme retaliation orchestrated by Sandgaard against journalists who were investigating the company’s questionable billing practices. In an alleged effort to silence and intimidate reporters, Sandgaard is accused of hiring an individual to conduct a campaign of severe harassment. This campaign reportedly included signing the journalists up for therapy sessions to treat fabricated and embarrassing medical conditions, such as erectile dysfunction. In a particularly disturbing move, the former CEO is also accused of attempting to sabotage a reporter’s marriage by having used underwear mailed to the journalist’s spouse. The package was accompanied by a fraudulent note implying infidelity, a tactic seemingly designed to inflict deep personal and emotional distress. These alleged actions represent a significant escalation, moving beyond corporate malfeasance into what prosecutors describe as a malicious campaign of personal intimidation against members of the press.
In the aftermath of the sweeping indictment, the corporate landscape at Zynex Inc. underwent a dramatic and immediate transformation. Both Thomas Sandgaard and Anna Lucsok ceased to be employed by the company, and Sandgaard was promptly removed from his position as the chairman of the board. It is important to note that Zynex Inc. itself has not been charged, and the company has reportedly cooperated fully with the federal investigation. Facing immense pressure, the medical device firm filed for Chapter 11 bankruptcy in December and stated that it had initiated a complete overhaul of its internal structures. This included replacing its senior leadership, implementing new and rigorous compliance programs, and fundamentally reforming its billing practices to prevent future misconduct. Meanwhile, the U.S. government took steps to reclaim the proceeds of the alleged fraud, seeking to seize a wide array of the defendants’ assets, which included luxury vehicles, a private jet, and valuable real estate holdings.
