$1 Billion Telemedicine Conviction in the Southern District of Florida: What the HealthSplash Verdict Signals for Telehealth Operators, DME Suppliers, and Marketing Companies

A federal jury in the Southern District of Florida convicted Brett Blackman, the founder and CEO of HealthSplash, on healthcare fraud, anti-kickback, and false statement conspiracies tied to a $1 billion telemedicine and durable medical equipment scheme. The verdict came down on May 14, 2026. Sentencing is set for August 26, 2026. His co-defendant, Gary Cox, was already convicted in a prior trial and sentenced to 15 years.

If you operate a telemedicine platform, a DME company, a pharmacy that takes referrals from marketers, or a lead-generation business that touches federal health care programs, this case is the template prosecutors are using right now. The Justice Department is no longer chasing only the doctors who signed bad orders or the suppliers who billed them. They are charging the people who built the platforms that connected everyone.

The HealthSplash verdict shows DOJ is targeting the platform builders behind telemedicine and DME schemes, not just the clinicians downstream.

What the Jury Found

The government proved a layered scheme. Blackman and his co-conspirators ran HealthSplash, which acquired Power Mobility Doctor Rx, or DMERx, in 2017. DMERx was an internet-based platform that produced doctors' orders and prescriptions for orthotic braces, DME, and other items. According to the trial record, the orders looked legitimate on their face. They were not.

Foreign call centers and direct-mail campaigns pushed Medicare beneficiaries to accept braces they did not need. Marketers paid telemedicine companies for the resulting leads. Telemedicine companies paid doctors to sign the orders generated by the DMERx platform, often without any meaningful patient contact. In some instances, the doctor never spoke to the patient at all. The signed orders flowed back to pharmacies and DME suppliers, who billed Medicare and other federal programs over $1 billion. Medicare paid more than $450 million.

Sham contracts and document manipulation were used to dress the kickbacks as legitimate platform fees and to dodge Medicare audit triggers. The jury was not persuaded.

The Enforcement Posture: Platforms, Not Just Providers

Three signals from the DOJ press release should change how operators in this space think about risk.

First, the announcement came from the new National Fraud Enforcement Division, formed on April 7, 2026. The Division is a permanent restructuring of DOJ resources around fraud, including healthcare fraud, and it now coordinates with the Vice President's Task Force to Eliminate Fraud. The Division is staffing up, not standing down.

Second, the Health Care Fraud Strike Force, which prosecuted this case, has charged more than 6,200 defendants since 2007, with combined alleged loss exposure over $45 billion. South Florida is one of the most active strike force jurisdictions in the country.

Third, this is the second conviction out of the DMERx ecosystem. Gary Cox is already serving 15 years. The prosecutors who built the case against Cox were able to use that record against Blackman. Prosecutors do this routinely. They run the first case to lock in cooperator testimony, exhibit foundations, and jury-tested theories, then they roll the same evidence into the next trial.

If you are downstream of a platform that has already produced a conviction, assume the government has already mapped your role in the chain. The question is not whether you are on their radar. The question is what they have already documented.

Exposure: The Statutes Driving These Cases

The Blackman jury returned guilty verdicts on three counts. Anyone working in this space should know what each one means in practical terms.

Conspiracy to commit health care fraud and wire fraud, 18 U.S.C. §§ 1349, 1347, and 1343. This is the workhorse statute. The government must prove an agreement to defraud a health care benefit program, knowing falsity, and use of wires. Maximum exposure is 20 years per count. Loss amount drives the guidelines, and at $1 billion in billings the guideline range pushes life-equivalent numbers before any variance.

Conspiracy to pay and receive health care kickbacks, 42 U.S.C. § 1320a-7b(b) and 18 U.S.C. § 371. Anti-Kickback Statute violations are charged whenever remuneration is exchanged for federal program referrals. Five-year statutory max per count, but in fraud schemes the AKS counts compound with the wire fraud counts and add criminal forfeiture exposure under 18 U.S.C. § 982.

Conspiracy to defraud the United States and false statements in connection with health care matters, 18 U.S.C. §§ 371 and 1035. The 1035 count is the prosecutors' insurance policy. Even when the underlying billing fraud is contested, false statements made during the scheme, on enrollment forms, or to investigators are independent crimes. Five years per count.

Guideline math at this loss level is brutal. Under USSG § 2B1.1, a $1 billion intended loss adds 30 levels. Sophisticated means, mass marketing, ten or more victims, and abuse of position of trust enhancements stack on top. Acceptance reductions are theoretical after a trial loss. The government will ask for a sentence in the high teens to low twenties, and the only meaningful defense work at that point is variance argument.

The Mistakes Operators Make Before Charges Are Filed

By the time a healthcare fraud indictment lands, the government usually has 18 to 36 months of investigation behind it. The mistakes that hurt clients most are made before they ever see a target letter.

• Talking to agents at the door. Healthcare fraud investigations open with HHS-OIG, FBI, or DCIS agents knocking. They are pleasant. They want a quick conversation. Anything said in that conversation is admissible and is often the centerpiece of the false statements charge under 18 U.S.C. § 1001 or § 1035.
• Producing documents in response to subpoenas without counsel reviewing scope, privilege, and litigation hold issues. Document productions lock in the government's narrative and create authentication shortcuts at trial.
• Assuming a civil False Claims Act inquiry is purely civil. Many qui tam matters are running parallel to a criminal investigation in the same district, often with the same line AUSA. By the time the criminal side surfaces, decisions made on the civil side have already constrained the criminal defense.
• Continuing to operate the same model after the first subpoena lands. Every claim submitted after the company is on notice gets charged as a separate substantive count and a separate predicate for forfeiture.
• Waiting for the indictment. Once an indictment is returned, the leverage to influence charging decisions, secure a non-target letter, or negotiate cooperation terms is largely gone.

By the time the subpoena arrives, the government usually already has a working theory, a records map, and a timeline.

What a Real Defense Looks Like Early

Healthcare fraud cases are won or controlled in the pre-indictment phase. Once the case is charged, the work shifts to damage control. Three pieces of early work matter most.

Narrative control. The government's case is built on a narrative: legitimate platform turned into kickback machinery, doctors who never met patients, beneficiaries who never wanted the products. Effective defense work in the pre-charge phase means identifying which pieces of that narrative are factually contestable and documenting the counter-narrative with contemporaneous records, contracts, compliance materials, and legitimate business rationale. This is not spin. It is a record the AUSA can take to a supervisor when deciding whether to indict, decline, or offer a deferred prosecution agreement.

Compliance posture. The Anti-Kickback Statute has safe harbors. Telemedicine has specific HHS-OIG advisory opinion guidance on permissible fee structures. A defense team that can map the client's operations against the safe harbor language, identify what does qualify for protection, and document remediation of what does not, has a fundamentally different conversation with the government than one that just denies wrongdoing.

Cooperation versus trial. This decision should never be made in the abstract. It requires a careful analysis of the client's actual exposure, the strength of the government's evidence, the value of what the client can offer, and the realistic sentencing differential between cooperation and trial. In a Blackman-style case, that differential is often the difference between five years and twenty.

Why the Window Is Closing for Operators in This Space

The DOJ press release was unusually direct about strategy. The Acting Attorney General called the conviction proof that the Department is going after every fraudster ripping off the American people. The Fraud Division head described the work as protecting the integrity of America's health care system. These statements signal a sustained enforcement push, not a one-off prosecution.

Three things are converging right now. The National Fraud Enforcement Division is staffing up. The Strike Force has decades of institutional memory in South Florida. The new administration's fraud task force is creating cross-agency referral pipelines from HHS, VA, DOD, CMS, and the IRS that did not exist in this coordinated form before.

Operators in telehealth, DME, compounding pharmacy, lab testing, hospice, home health, and behavioral health should treat the next twelve months as the period where criminal exposure is most likely to crystallize. Subpoenas issued now will mature into target letters and indictments in 2027 and 2028. The decisions made in the next several months, about counsel, document control, voluntary disclosure, and operational changes, will determine outcomes for years.

Facing a Healthcare Fraud Investigation or Charges in Florida?

AMC Defense Law represents clients in federal healthcare fraud, anti-kickback, and complex white collar investigations across the Southern District of Florida and other federal districts. Our practice focuses on early intervention, pre-indictment defense strategy, and federal sentencing advocacy in high-exposure matters.

Telemedicine and DME cases are document-heavy, platform-driven, and usually won or lost before indictment.

If you have received a subpoena, a target letter, a CID, or a knock on the door from HHS-OIG, FBI, DCIS, or another federal agency, the most valuable thing you can do is have a confidential conversation with experienced federal counsel before you do anything else.

Aaron M. Cohen | AMC Defense Law
1200 N. Federal Highway, Suite 300, Boca Raton, FL 33432
561-542-5494 | amc@amcdefenselaw.com | amcdefenselaw.com

This article is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Every case is fact-specific, and prior results do not guarantee a similar outcome. If you are facing a federal investigation or criminal charges, consult qualified federal criminal defense counsel immediately.