Cooperation can shave years off a prison term, but it rarely erases the crime. A former healthcare executive who helped the government received an 18-month sentence Friday for his part in a $450 million scheme to swindle Medicare using software that generated false prescriptions for orthotic braces.

The Sentence

At a hearing in Miami, U.S. District Judge David S. Leibowitz sentenced Gregory Schreck, a former vice president of HealthSplash Inc., to 18 months in prison. The government says HealthSplash defrauded Medicare through “DMERx,” a software program that created fake prescriptions for orthotic braces.

A Judge Who Went Lower Than Prosecutors Asked

Prosecutor Darren Halverson cited Schreck’s extensive cooperation and asked for a 40% reduction off the 10-year statutory maximum for the one count to which Schreck pleaded guilty: conspiracy to commit healthcare fraud. Leibowitz went further, saying that recommendation would not send a strong enough signal to other co-defendants to cooperate with prosecutors.

“The signal is that going forward, because of sentences like this, the future Gregory Schrecks of the world will run to Mr. Halverson and beg him to cooperate,” the judge said.

Central to the Scheme, Crucial to the Conviction

Leibowitz called Schreck “absolutely central in enabling the cheating,” but noted his trial testimony was crucial in convicting HealthSplash CEO Brett Blackman, who was sentenced Wednesday to 19 years in prison.

The judge ordered Schreck to surrender to the U.S. Marshals by Oct. 31 and agreed to recommend that he serve his sentence at the federal facility in Leavenworth, Kansas, near his home.

How the Case Unfolded

Schreck pleaded guilty in February 2025, admitting he conspired with Gary Cox, who developed DMERx, Blackman and others to operate HealthSplash and National Center for Pain LLC between 2017 and 2020, according to the factual proffer filed with his plea deal.

He testified earlier this year against Blackman, whom a Miami jury found guilty in May of conspiracy to commit healthcare fraud and wire fraud, conspiracy to pay and receive kickbacks, and conspiracy to defraud the United States.

A “Medicare Fraud Factory”

At Blackman’s trial, Halverson called HealthSplash a “one-stop Medicare fraud factory by scammers and for scammers,” created to connect foreign call centers with corrupt telemedicine doctors and durable medical equipment companies. Prosecutors said telemedicine doctors who never treated the patients were bribed and paid kickbacks to sign the prescriptions.

Co-Defendants and Operation Brace Yourself

Blackman began trial last year alongside Cox but was severed as a defendant and a mistrial was declared in his case. Cox, CEO of Power Mobility Doctor Rx LLC, was convicted and sentenced in December to 15 years in prison.

The men were indicted in June 2023, along with Schreck, as part of Operation Brace Yourself, a nationwide federal investigation into companies that billed Medicare for medically unnecessary orthotic braces. The operation led to charges against 78 people.

The HealthSplash Network

Prosecutors said the companies belonged to the HealthSplash Network, which used an internet platform to connect brace suppliers, telemarketers, telemedicine companies and pharmacies willing to accept kickbacks in exchange for arranging medical professionals to prescribe pain creams, braces and other items for recruited beneficiaries.

The Lawyers

The government is represented by Darren C. Halverson, Reginald Cuyler Jr. and Lorinda Laryea of the U.S. Department of Justice’s Criminal Division, Fraud Section. Schreck is represented by Kenneth M. Swartz and Steven Harold Haguel.

For Schreck, 18 months is far below the statutory ceiling. For the judge, it was also a message to every defendant still weighing whether to talk.