`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 1 of 17
`
`
`
`GARY M. RESTAINO
`United States Attorney
`District of Arizona
`
`MATTHEW WILLIAMS
`Assistant U.S. Attorney
`Arizona State Bar No. 029059
`Two Renaissance Square
`40 N. Central Ave., Suite 1800
`Phoenix, Arizona 85004
`Telephone: 602-514-7500
`Email: matthew.williams3@usdoj.gov
`
`GLENN S. LEON
`Chief
`Criminal Division, Fraud Section
`U.S. Department of Justice
`
`SHANE BUTLAND
`Trial Attorney
`Criminal Division, Fraud Section
`U.S. Department of Justice
`1400 New York Avenue NW
`Washington, D.C. 20005
`Telephone: 202-286-1177
`Email: shane.butland2@usdoj.gov
`Attorneys for Plaintiff
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF ARIZONA
`
`
`CR-24-01040-PHX-ROS
`
`UNITED STATES’ MOTION FOR
`DETENTION
`
`
`
`
`
`
`
`
`
`
`
`
`United States of America,
`
`
`
`Plaintiff,
`
`
`v.
`
`
`
`1. Alexandra Gehrke, a/k/a “Lexie”
`Gehrke, and
`
`2. Jeffrey King,
`
`
`
`Defendants.
`
`The United States respectfully seeks the pretrial detention of defendants Alexandra
`Gehrke, a/k/a “Lexie” Gehrke (“GEHRKE”) and Jeffrey King (“KING”) as they pose a
`significant risk of flight based on the nature of the charges, the strength of the evidence,
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 2 of 17
`
`
`
`their access to substantial financial resources and a private airplane, the severity of the
`penalties faced, evidence demonstrating their preparation and intent to flee, and their
`lies, omissions, and misrepresentations to Pretrial Services.
`PROCEDURAL HISTORY
`On June 17, 2024, a criminal complaint was filed charging GEHRKE and KING
`
`with one count of conspiracy to commit health care fraud and wire fraud (18 U.S.C. §
`1349). That evening, law enforcement arrested GEHRKE and KING at the Phoenix Sky
`Harbor International Airport as they boarded a flight to London, England.
`On June 18, 2024, GEHRKE and KING were indicted for conspiracy to commit
`
`health care fraud and wire fraud (18 U.S.C. § 1349), health care fraud (18 U.S.C. §§
`1347 and 2), conspiracy to defraud the United States and to pay and receive kickbacks
`(18 U.S.C. § 371), solicitation and receipt of kickbacks (42 U.S.C. §§ 1320a-7b(b) and
`18 U.S.C. § 2), and transactional money laundering (18 U.S.C. §§ 1957 and 2). [ECF
`No. 6.] The Indictment also seeks forfeiture of assets belonging to GEHRKE and
`KING, including two residences; four luxury vehicles; over $500,000 of gold bars,
`gold coins, and jewelry; over $52 million held in 11 bank accounts; and two
`$8,000,000 life insurance policies. Id. at 18–20.
`
`The indictment alleges that GEHRKE and KING orchestrated a massive scheme
`to defraud Medicare by targeting elderly patients, many of whom were terminally ill
`in hospice case, and causing medically unnecessary and highly expensive amniotic
`wound dressings (“allografts”) to be applied to these vulnerable patients. Id. at 2. From
`November 2022 through May 2024, GEHRKE, KING, and their co-conspirators,
`individually and through companies they owned and controlled, caused more than
`$900 million in false and fraudulent claims to Medicare for these medically
`unnecessary allografts applied to less than 500 patients. Id. at 2–3. Medicare and other
`health care benefits programs paid over $600 million based on these false and
`fraudulent claims. Id. at 3. GEHRKE and KING received over $330 million in
`unlawful kickbacks as a result of their fraud scheme. Id.
`
`- 2 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 3 of 17
`
`
`
`LEGAL STANDARD
`The Bail Reform Act (“BRA”) provides that a defendant should be detained pending
`
`trial if “no condition or combination of conditions will reasonably assure the appearance
`of the person as required . . . .” 18 U.S.C. § 3142(e)(1). This analysis involves a “two-step
`inquiry.” United States v. Gentry, 455 F. Supp. 2d 1018, 1019–20 (D. Ariz. 2006). Id. First,
`the Court must make a finding as to whether the defendant presents a “serious risk that
`such person will flee” if not detained. Id. at 1020 (quoting 18 U.S.C. § 3142(f)(2)). The
`government bears the burden of proving such risk of flight by a preponderance of the
`evidence. Id. Second, if the defendant is likely to flee, the Court next must determine
`whether any condition or combination of conditions for the defendant’s release will
`reasonably assure the appearance of the defendant. 18 U.S.C. § 3142(f).
`
`The BRA provides the following four factors for courts to consider when
`determining whether to detain a defendant: (1) the nature and circumstances of the offense
`charged; (2) the weight of the evidence against the person; (3) the history and
`characteristics of the person, which includes, among other things, the defendant’s financial
`resources, past conduct, and history related to drug abuse; and (4) the nature and
`seriousness of the danger to any person or community that would be posed by the person’s
`release. 18 U.S.C. § 3142(g).
`
`ARGUMENT
`
`GEHRKE and KING present serious risks of flight, and there is no condition or
`combination of conditions of release that can reasonably assure their appearance as
`required.
`
`The Nature and Circumstances of the Charged Offenses Favor Detention.
`I.
`
`The severity of the offenses charged, the possible punishment if convicted, and
`the nature of the Defendants’ complex fraud conspiracy favor detention.
`
`GEHRKE faces eight charges, and KING faces seven charges, in the ten-count
`Indictment. Count 1 charges both Defendants with an offense that has a maximum
`penalty of 20 years. GEHRKE faces a combined statutory maximum penalty of 85
`
`- 3 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 4 of 17
`
`
`
`years, and KING faces a combined statutory maximum penalty of 75 years. With a
`loss of over $900 million in billed claims to the defrauded health care benefit programs
`and several likely additional enhancements, including sophisticated means and role
`adjustments, the Advisory Guidelines range under the U.S. Sentencing Guidelines is a
`life sentence for both Defendants.
`
`The offenses charged are extremely serious, involving the application of highly
`expensive allografts to vulnerable and dying patients for the purpose of stealing money
`entrusted for the elderly and disabled. Health care fraud is a serious crime that
`Congress has long condemned as contrary to the public interest and a threat to the
`viability of Medicare.1 The Ninth Circuit has also recognized that the seriousness of
`charges and severity of penalties give a defendant an incentive to flee. See United
`States v. Townsend, 897 F.2d 989, 995 (9th Cir. 1990) (“Facing the much graver
`penalties possible under the present indictment, the defendants have an even greater
`incentive to consider flight.”).
`
`Furthermore, the Defendants are charged with crimes involving a complex web
`of lies and deceit. Over the course of nearly two years, the Defendants defrauded health
`care benefit programs by causing the submission of over $900 million in false and
`fraudulent claims to Medicare, CHAMPVA, TRICARE, and commercial insurance
`companies. [ECF 6 at 12.] In addition to these numerous false claims submitted month
`after month, GEHRKE made false certifications to Medicare as her company’s
`authorized official. Id. at 9. The Defendants also concealed and disguised the illegal
`kickbacks they received by, among other ways, causing sham invoices to be issued. Id.
`at 12. The deceitful nature of the offenses charged favor detention because it makes it
`
`
`1 H.R. 95-393, pt. II, at 44 (1977) (“In whatever form it is found, . . . fraud in these health
`care financing programs adversely affects all Americans. It cheats taxpayers who must
`ultimately bear the financial burden of misuse of funds in any government-sponsored
`program. It diverts from those most in need, the nation’s elderly and poor, scarce program
`dollars that were intended to provide vitally needed quality health services.”).
`
`- 4 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 5 of 17
`
`
`
`less likely that the Defendants will abide by any conditions of release ordered by the
`Court.
`
`Thus, because the Defendants face a de facto life sentence if convicted of the
`serious offenses charged, they have a compelling incentive to flee if released, and the
`nature of the offenses against them make it less likely that they can be trusted to abide
`by any conditions of release. For these reasons, the Defendants should be detained.
`The Weight of the Evidence Favors Detention.
`II.
`
`The Government’s case against GEHRKE and KING is very strong.
`
` The evidence against the Defendants includes statements from multiple
`cooperating witnesses, audio and video recordings, internal company documents, text
`messages, emails, bank and financial records
`that show health
`insurance
`reimbursements flowing to a web of bank accounts controlled by the Defendants,
`Medicare records, other health insurance company records, medical records and
`patient files, statements from patients’ health care providers and caretakers, and other
`documents and witness statements. The Government collected this evidence over the
`course of a thorough investigation that lasted several months and involved the
`execution of multiple search warrants.
`
`Some of this evidence is highlighted in the Indictment itself. As described in
`paragraph 29(j), GEHRKE directed sales representatives to order 4x6cm allografts for
`wounds the “size of [her] little fingernail.” This is because the larger the allograft, the
`more Medicare paid, and the more money the Defendants received. This alone is
`compelling evidence establishing GEHRKE’s criminal intent. Similarly, as noted in
`paragraph 29(h) of the Indictment, KING sanctioned the application of extremely
`expensive allografts to any wound of any severity regardless of medical necessity by
`instructing the sales representatives to refer Medicare patients for grafting who had
`wounds “of any stage” that would “benefit from healing faster.”
`
`The strength of the evidence against GEHRKE and KING is underscored by the
`fact that two nurse practitioners who contracted with companies owned and controlled
`
`- 5 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 6 of 17
`
`
`
`by GEHRKE and KING agreed to plead guilty to health care fraud and wire fraud
`conspiracies for their roles in the Defendants’ scheme.
`
`In sum, the evidence gathered in this thorough and lengthy investigation by the
`Federal Bureau of Investigation, the Department of Health and Human Services –
`Office of Inspector General, the Department of Veterans Affairs, and the Department
`of Defense amply supports the Indictment’s allegations and the need for the
`Defendants’ continued detention.
`III. The History and Characteristics of the Defendants Favor Detention
`
`The amount of money accumulated by the Defendants, their access to
`substantial funds and a friend’s airplane, specific evidence demonstrating preparation
`and intent to flee, and the Defendants’ lies, omissions, and misrepresentations to
`Pretrial Services strongly favor detention.
`
`A. GEHRKE and KING Have Significant Assets.
`
`Bank records reflect that GEHRKE and KING opened savings, checking,
`brokerage, and trust accounts at numerous banks under their own names and the names
`of limited liability companies, through which hundreds of millions of dollars flowed
`over the past year and a half. The records also show that GEHRKE recently moved
`significant funds into newly opened accounts under the names of LLCs in an apparent
`attempt to conceal the money, and that KING withdrew millions of dollars on April
`26, 2024. The Government seized only approximately $60 million in total of these
`funds. Thus, it is believed that the Defendants likely have access to potentially tens of
`millions of dollars that they could use to flee and live comfortably in hiding in the
`United States or abroad if released.
`
`During the conspiracy, GEHRKE owned and controlled accounts held in at least
`eight different financial institutions under her name and the names of at least six
`different LLCs. Bank records showed that GEHRKE opened accounts as recently as
`May 2024, into which she moved substantial amounts of money. For example, between
`May 14-15, 2024, GEHRKE wired over $30 million from accounts in her name and
`
`- 6 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 7 of 17
`
`
`
`one of her business entities, AMTG Medical Consultant LLC, into accounts opened on
`May 3, 2024, in the names of AMTG Medical Consultant LLC and Jexie Enterprises
`Inc. The lack of a legitimate financial purpose in moving money in this manner
`suggests that these transfers were intended to conceal the assets.
`
`During the conspiracy, KING owned and controlled bank accounts held in at
`least five different financial institutions under his own name and the names of at least
`four different LLCs. Bank records show that on April 26, 2024, KING withdrew over
`$6.7 million from various accounts, and the Government is aware that KING has
`access to at least an additional $4.5 million in his name of which the Government has
`yet to seize. Therefore, there is reason to believe that KING currently personally has
`access to over $11 million, in addition to shared assets with his spouse, GEHRKE.
`
`The Government believes that the Defendants likely have access to significant
`fraud proceeds, possibly tens of millions of dollars, that the Government has yet to
`trace and seize due to the Defendants’ efforts to move, conceal, and disguise the
`money. If released, the Defendants could access this money and use it to flee and live
`comfortably as fugitives.
`B. GEHRKE and KING Knew Criminal Charges Were Imminent and
`Were Prepared to Flee Once Charged.
`
`Items recovered from GEHRKE and KING’s residence, luggage, and safe
`deposit boxes establish that they were aware criminal charges were imminent and were
`prepared to flee.
`1.
`
`Upon Leaving the Country, GEHRKE Instructed Her
`Housekeeper to Notify Her of an Indictment.
`On June 18, 2024, law enforcement executed a search warrant at GEHRKE and
`
`KING’s residence in Scottsdale, Arizona. Among the items seized by law enforcement
`was a notebook containing GEHRKE’s handwritten notes. The notes indicate that if
`GEHRKE and KING had not been arrested at the airport, they would have traveled
`throughout Europe for 36 days:
`
`- 7 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 8 of 17
`
`
`
`
`Another note appeared to be directed to the housekeeper, with instructions to
`
`give the pet sitter a house key, door code, and garage code. At the bottom of that note,
`GEHRKE wrote “please notify of indeitment [sic] or any further harsher legal
`escalations immediately.”
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`This note reflects GEHRKE’s belief that she could be indicted during her trip
`to Europe and her desire to be notified immediately when it happened.
`
`
`
`- 8 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 9 of 17
`
`
`
`2.
`
`GEHRKE and KING Owned a Book Titled “How To
`Disappear.”
`
`During the search of GEHRKE and KING’s residence, law enforcement
`recovered a book titled: How To Disappear: Erase Your Digital Footprint, Leave False
`Trails, and Vanish Without a Trace:
`
`
`
`
`
`Amazon’s description of this book indicates that it is “written by the world’s
`leading experts on finding people and helping people avoid being found” and that the
`book “covers everything from tools for disappearing to discovering and eliminating
`the nearly invisible tracks and clues we tend to leave wherever we go.” See
`https://www.amazon.com/How-Disappear-Digital-Footprint-
`Without/dp/1599219778.
`
`While the mere ownership of this book would not necessarily be indicative of
`an actual intent to disappear in most circumstances, it certainly raises a red flag here
`in light of GEHRKE and KING’s concerns with an impending indictment and efforts
`to conceal their fraudulent proceeds.
`
`- 9 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 10 of 17
`
`
`
`3.
`
`In Their Carry-On Luggage, GEHRKE and KING had a
`Criminal Law Handbook and Three Cellular Phones.
`
`Law enforcement seized GEHRKE and KING’s luggage incident to arrest. An
`
`inventory search of their carry-on bags revealed that they contained three cellular
`phones. GEHRKE and KING also had an additional cellular phone on each of their
`persons when arrested. In total, GEHRKE and KING possessed five cellular phones
`between them as they boarded the international flight, enabling them to communicate
`with each other and others through multiple devices.
`Additionally, one of the carry-on bags contained a book titled Criminal Law
`Handbook: Know Your Rights, Survive The System:
`
`
`This is not the type of book ordinarily brought on a 36-day European vacation,
`
`nor a book that a non-lawyer without legal exposure would ordinarily have. And when
`viewed in conjunction with GEHRKE’s written instructions to the housekeeper and
`the How To Disappear book recovered from the residence, it is further evidence of
`GEHRKE and KING’s acknowledgment that criminal charges were looming when
`they decided to leave the country.
`
`- 10 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 11 of 17
`
`
`
`4.
`
`GEHRKE Left Instructions On How to Access and Transfer
`Cryptocurrency to Her in Her Physical Absence.
`
`Bank records show that GEHRKE and KING both purchased cryptocurrency. On
`June 18, 2024, law enforcement executed search warrants on three safe deposit boxes
`rented by GEHRKE and KING. The Defendants added certain relatives and one close
`friend as “additional clients” to these safe deposit boxes, so others had could access the
`boxes in their absence. Inside one of those safe deposit boxes was a black USB drive, a
`purple USB drive, a cryptocurrency Ledger-Nano-S-Plus (the “Ledger”), and a “secret
`recovery sheet” booklet:
`
`
`
`
`The Ledger is a secure digital wallet accessible with a PIN that stores passcodes
`(“private keys”) needed to access and manage cryptocurrency stored in crypto wallets.
`See https://www.ledger.com. To operate the Ledger, it needs to be connected to a
`smartphone or laptop where its companion software can be installed. Id. This allows
`cryptocurrency transactions to be completed via the internet. Id.
`
`- 11 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 12 of 17
`
`
`
`Along with the Ledger and flash drives were instructions, handwritten by
`
`GEHRKE, about how to access the cryptocurrency in her physical absence once she
`gave verbal authorization:
`
`
`
`
`
`
`
`The notes state as follows:
`
`
`
`Lexie[’]s verbal authorization req[uired] to access. Instructions. Only
`use if Lexie authorizes verbally by saying “I colored my hair and it came
`out [color of ledger black or purple].”2 Then only disclose the words for
`the appropriate color. NOT BOTH. Some words are only 4 letters.
`That[’]s ok. Use the metal etchings. Thank you! I love you. Lexie
`Gehrke.
`
`
`2 This appears to reference the black and purple USB devices in the photograph above.
`
`- 12 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 13 of 17
`
`
`
`
`There was also a booklet labeled “crypto seed bank” depicted in the above
`
`photo. “Seed phrases” are strings of 12, 18, or 24 words used to generate the private
`keys, which enable access to the cryptocurrency wallet.
`
`Taken together, these items and instructions suggest that GEHRKE and KING
`were prepared to flee in the event of an indictment and have their cryptocurrency
`transferred to them by having a relative or close friend with access to the safe deposit
`boxes provide the seed phrases after GEHRKE used code language (“I colored my
`hair”).
`
`5.
`
`Large Amounts of Cash Were Recovered from GEHRKE and
`KING’s Residence and Safe Deposit Boxes.
`Law enforcement recovered over $350,000 in cash from GEHRKE and KING’s
`home and safe deposit boxes on June 18, 2024, when executing search warrants. The
`Defendants are not known to have operated in any legitimate cash-intensive
`businesses. This large amount of cash could easily have been used to flee and live
`comfortably without leaving traces from credit cards and bank transfers.
`
`- 13 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 14 of 17
`
`
`
`6.
`
`GEHRKE’s Friend Owns a Plane and Had Access to
`GEHRKE and KING’s Safe Deposit Boxes Containing
`Fraudulent Proceeds and the Cryptocurrency Transfer
`Instructions.
`
`GEHRKE’s close friend, who gave a speech at GEHRKE and KING’s February
`2024 wedding, received over $3 million from GEHRKE during the course of the fraud
`conspiracy purportedly for this friend’s work as a sales representative. This friend used
`a portion of the funds to purchase an airplane. GEHRKE and the friend are depicted
`here, at the Scottsdale Airport, posing with the plane:
`
`Bank records show that on June 3, 2024, GEHRKE wrote a $9,000 check to this
`
`friend’s company with “air travel expense” written in the memo line. This is also the same
`friend who had access to GEHRKE and KING’s safe deposit boxes, including the safe
`deposit box that contained the cryptocurrency, cryptocurrency instructions detailed above,
`and approximately $250,000 in cash.
`
`Unlike taking flights from a commercial airport, passengers on privately-owned
`planes do not undergo security checks or purchase boarding passes. Accordingly, it would
`be impossible for law enforcement to stop GEHRKE or KING from boarding their friend’s
`plane and fleeing the United States. If granted bond, the evidence suggests that GEHRKE
`
`- 14 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 15 of 17
`
`
`
`and KING could use this friend’s plane to abscond from the jurisdiction and evade
`prosecution.
`GEHRKE and KING Lied to Pretrial Services.
`
`C.
`
`GEHRKE and KING were interviewed by the U.S. Department of Probation
`(“Probation”) prior to their initial appearances. Those Pretrial Services Reports (“PSR”)
`contain material lies, omissions, and misrepresentations concerning GEHRKE and KING’s
`finances and assets, GEHRKE’s drug usage, and their foreign travel. The demonstrative
`dishonesty in their self-reporting to Probation is further evidence that GEHRKE and KING
`cannot be trusted to follow this Court’s directives and return to court as required.
`
`Finances and Assets. GEHRKE reported to Pretrial Services that her estimated net
`worth totaled $17 million, $10 million of which was held in her personal checking account,
`and $7 million that was held her business account. See GEHRKE PSR at 3. On June 18,
`2024, law enforcement seized over $52 million from GEHRKE’s personal and business
`accounts the day after GEHRKE’s arrest and an $8 million life insurance annuity policy.
`Even limiting GEHRKE’s misrepresentation to the money seized by the Government,
`GEHRKE identified less than 30% of her actual net worth. GEHRKE also failed to disclose
`ownership of three luxury vehicles worth almost $900,000 combined—a 2022 Mercedes
`G63 worth over $360,000, a 2016 Ferrari worth over $300,000, and a 2023 Mercedes GLE
`worth over $230,000.
`
`KING similarly underreported his net worth to Pretrial Services. KING reported that
`he had $2.1 million in stocks/bonds, $10,000 in cash, and approximtely $257,000 in his
`savings and retirement accounts. See KING PSR at 3. These figures are inaccurate. Bank
`records show that KING withdrew close to $7 million on April 26, 2024, from accounts he
`owned and controlled. And that amount doesn’t include the additional $4.5 million in his
`brokerage accounts or his $8 million life insurance annuity policy, the latter of which was
`seized by law enforcement. KING also undervalued his 2023 Mercedes GLE “business
`vehicle,” claiming it was worth $60,000 when bank records show he personally purchased
`it for $90,000 in August 2023.
`
`- 15 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 16 of 17
`
`
`
`Drug Usage. GEHRKE also lied about her drug usage. Several hours after initially
`
`declining to submit to a urinalysis to Pretrial Services, GEHRKE submitted a sample that
`tested positive for amphetamine and methamphetamine. Despite the positive test,
`GEHRKE denied using methamphetamine. These positive results and GEHRKE’s denial
`are concerning both with respect to GEHRKE’s mental and physical health as factors to be
`considered when assessing the propriety of pretrial detention, and because they
`demonstrates GEHRKE’s willingness to lie to a federal agency.
`
`Foreign Travel. GEHRKE and KING both reported that their last foreign travel was
`to the Bahamas for leisure in February/March 2024. This is also inaccurate. While they did
`travel to the Bahamas in early March 2024, records show that on March 31, 2024,
`GEHRKE and KING travelled to Mexico by vehicle.
`
`Even after their arrest, GEHRKE and KING continued their deception by outright
`lying, omitting, and misrepresenting information to Pretrial Services concerning their
`finances, drug usage, and foreign travel. The Defendants’ inability to be honest with a
`federal agency after their arrests provides reason to believe that they will not follow the
`orders and directives of this Court.
`
`CONCLUSION
`There is not just a preponderance, but substantial evidence that GEHRKE and KING
`pose significant risks of flight and that there is no condition or combination of conditions
`that can reasonably assure their return to court. GEHRKE and KING are charged with
`multiple, serious offenses, for which there is abundant evidence supporting their guilt and
`lengthy potential prison sentences if convicted. Moreover, between the Defendants’ recent
`financial activity, GEHRKE’s handwritten note to the housekeeper, and their possession
`of criminal law and how-to-disappear books, the evidence plainly shows that GEHRKE
`and KING were aware that criminal charges were imminent and made preparations to flee.
`Those preparations included asking their housekeeper to inform them of an indictment
`while they were abroad and creating written instructions on how to access and transfer their
`cryptocurrency. GEHRKE and KING also have access to millions of dollars and a friend’s
`
`- 16 -
`
`

`

`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 2:24-cr-01040-ROS Document 18 Filed 06/24/24 Page 17 of 17
`
`
`
`private plane that could be used to flee and live comfortably as fugitives. Finally, GEHRKE
`and KING lied to Pretrial Services and therefore cannot be trusted to comply with this
`Court’s directives.
`Accordingly, pursuant to 18 U.S.C. § 3142, the Government urges the Court to
`continue to detain GEHRKE and KING pending trial and deny their motion for release.
`
`Respectfully submitted,
`
`,
`
`
`
`
`
`
`
`
`
`
`Dated: June 24, 2024
`
`
`GARY M. RESTAINO
`United States Attorney
`District of Arizona
`
`MATTHEW WILLIAMS
`Assistant U.S. Attorney
`District of Arizona
`GLENN S. LEON
`Chief
`Criminal Division, Fraud Section
`U.S. Department of Justice
`
`
`
`/s/ Shane Butland
`SHANE BUTLAND
`Trial Attorney
`Criminal Division, Fraud Section
`U.S. Department of Justice
`
`
`
`
`
`By:
`
`- 17 -
`
`