Zynex Admits Fraud, Will Pay up to $12.5M

PROVIDENCE, Rhode Island—Zynex, Inc, a Colorado-based medical device company that makes pain management devices such as braces and TENS devices, has agreed to enter into a non-prosecution agreement (NPA) with the United States Attorney’s Office for the District of Rhode Island and admit to participating in a conspiracy to commit health care fraud, securities fraud, mail fraud and other violations.

Under the agreement, which is subject to approval of the bankruptcy court in Zynex’s ongoing Chapter 11 proceedings, Zynex will pay between $5 and $12.5 million depending on the company’s earnings and profit over the period of the agreement. Zynex will also forfeit all unpaid claims submitted prior to Sept. 1, 2025, including claims submitted during the period of suspension of TRICARE payments. These forfeited claims include more than $85 million billed to TRICARE during a suspension period and more than $13 million billed to other payors and patients.

In the Statement of Facts included in the NPA, Zynex also admits the following:

• Zynex fraudulently obtained millions of dollars from government and private health care payers and patients by submitting excessive and improper claims for medical devices and supplies.
• During the relevant period, Zynex collected more than $873 million for its products, including more than $600 million for supplies, the vast majority of which were the result of fraud.
• Zynex shipped and billed for medically unnecessary supplies in excess quantities, sometimes as large as 32, 64 or 128 electrode pairs per patient each month.
• Zynex misled investors by concealing that its revenues were driven by fraudulent billing practices.
   

As part of the resolution, Zynex agreed to implement enhanced compliance and corporate governance reforms designed to prevent future misconduct, strengthen internal oversight and ensure accountability under its new leadership. The company also agreed to fully cooperate with the government’s ongoing investigations.

“This resolution addresses the seriousness of the fraud committed by Zynex while recognizing the substantial turnaround in conduct implemented under new management,” said United States Attorney Charles C. Calenda. “It also demonstrates that when new management confronts the fraudulent conduct, reforms its practices and fully cooperates, the government will take those actions into account in reaching an appropriate resolution.”

Thomas Sandgaard, the former CEO of Zynex, and Anna Lucsok, the former chief operating officer of Zynex were previously indicted for related conduct and charges. They made an initial appearance in federal court on Jan. 21, 2026. Lucsok was released with electronic monitoring and on Jan. 26, 2026, Thomas Sandgaard was ordered detained.

“The resolution we have achieved today represents the fulfillment of the commitments we made as a new management team when we arrived in August 2025: to break from the past, rebuild the company as compliant-by-design and create a new future for the company, its customers and employees,” said Steven Dyson, CEO of Zynex. “Our customers and patients experience a very real benefit from our highly effective products, which has unfortunately been overshadowed by previous business practices. Our entire team has spent six months singularly focused on rebuilding every part of our organization to focus on what matters most: transparency, integrity and compliance in everything we do so that our high-quality products are supported by high-quality operations.”