Zynex, Inc., a medical device company based in Colorado, has agreed to a non-prosecution agreement with the U.S. Attorney’s Office for the District of Rhode Island. The company admitted to taking part in a conspiracy involving health care fraud, securities fraud, mail fraud, and other violations. The agreement is pending approval from the bankruptcy court as Zynex continues its Chapter 11 proceedings.
As part of the settlement, Zynex will pay between $5 million and $12.5 million depending on its earnings during the period covered by the agreement. The company will also forfeit all unpaid claims submitted before September 1, 2025. This includes over $85 million billed to TRICARE during a payment suspension and more than $13 million billed to other insurers and patients.
According to facts outlined in the non-prosecution agreement, Zynex admitted that it obtained millions of dollars from government and private health care payors and patients through excessive and improper billing for medical devices and supplies. During this period, Zynex collected more than $873 million for its products—over $600 million was for supplies—and most of these revenues were linked to fraudulent activities. The company shipped unnecessary supplies in large quantities per patient each month and misled investors by hiding that much of its revenue came from fraudulent billing.
Under the terms of resolution, Zynex has committed to improving compliance measures and corporate governance reforms intended to prevent future misconduct. These reforms aim to strengthen internal oversight and ensure accountability under new leadership. The company has also agreed to cooperate fully with ongoing government investigations.
United States Attorney Charles C. Calenda stated: “This resolution addresses the seriousness of the fraud committed by Zynex while recognizing the substantial turnaround in conduct implemented under new management,” adding that cooperation from new management played a role in determining an appropriate outcome.
Former CEO Thomas Sandgaard and former Chief Operating Officer Anna Lucsok have already been indicted on related charges; both appeared in federal court in January 2026. Lucsok was released with electronic monitoring while Sandgaard was ordered detained later that month.
Amanda Koldjeski, Acting Special Agent in Charge of FBI Denver, commented: “The FBI remains steadfast in uncovering and deterring fraud against our health care system… In order to maintain the integrity of our health care system, the FBI will hold any individual or entity engaging in health care fraud responsible for their conduct.”
Chad Gosch from Defense Criminal Investigative Service emphasized efforts against wasteful spending within TRICARE: “These efforts reaffirm our unwavering dedication to protecting the DoD community, its resources, and programs that are essential to military readiness.”
Anthony Heddell with Veterans Affairs Office of Inspector General said: “This agreement reinforces the Veterans Affairs Office of Inspector General’s commitment to protecting the integrity of VA’s health care programs and preserving taxpayer funds.”
Roberto Coviello from U.S. Department of Health and Human Services added: “Zynex’s former executives engaged in a scheme that defrauded taxpayer-funded health care programs and deceived investors… companies should always uphold their responsibility to operate ethically.”
The case is being prosecuted by First Assistant United States Attorney Sara Miron Bloom along with Assistant United States Attorneys Peter I. Roklan and Milind Shah.
Multiple agencies contributed to investigating this case including offices from Federal Bureau of Investigation (Denver/Boston), U.S. Department of Health & Human Services OIG, Department of Defense OIG-DCIS, Department of Veterans Affairs OIG, Office of Personnel Management OIG, United States Postal Service OIG, Food & Drug Administration OCI as well as support from Defense Contract Audit Agency, Securities & Exchange Commission, and National Insurance Crime Bureau – Northeast Region.
