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WASHINGTON
- The U.S. Department of Justice (DOJ) announced today that the
founder and CEO of a California-based digital health company and
its clinical president were arrested today in connection with their
alleged participation in a scheme to distribute Adderall over the
internet, conspire to commit health care fraud in connection with
the submission of false and fraudulent claims for reimbursement for
Adderall and other stimulants, and obstruct justice.
Ruthia He, the founder and CEO of Done Global Inc., was arrested in
Los Angeles and will make her initial appearance at 1:30 p.m.
PDT/4:30 p.m. EDT in Los Angeles. David Brody, the clinical
president of Done Health P.C. (collectively, Done), was arrested in
San Rafael, California, and will make his initial appearance at
10:30 a.m. PDT/1:30 p.m. EDT in San Francisco, California.
Homeland Security Investigations (HSI) is among the federal
entities investigating the case.
“The individuals charged today allegedly disregarded the first rule
of medical care—do no harm—in order to maximize profits, and there
is no place for such fraud in our healthcare system,” said
Secretary of Homeland Security Alejandro N. Mayorkas. “The
indictment levied against these individuals sends a clear message:
the Department of Homeland Security, our Homeland Security
Investigations personnel, and our partners across the federal
government will hold accountable those providers and prescribers
who prey on their patients.”
“As alleged, these defendants exploited the COVID-19 pandemic to
develop and carry out a $100 million scheme to defraud taxpayers
and provide easy access to Adderall and other stimulants for no
legitimate medical purpose,” said Attorney General Merrick B.
Garland. “Those seeking to profit from addiction by illegally
distributing controlled substances over the internet should know
that they cannot hide their crimes and that the Justice Department
will hold them accountable.”
“As alleged in the indictment, the defendants provided easy access
to Adderall and other stimulants by exploiting telemedicine and
spending millions on deceptive advertisements on social media. They
generated over $100 million in revenue by arranging for the
prescription of over 40 million pills,” said Principal Deputy
Assistant Attorney General Nicole M. Argentieri, head of the
Justice Department’s Criminal Division. “These charges are the
Justice Department’s first criminal drug distribution prosecutions
related to telemedicine prescribing through a digital health
company. As these charges make clear, corporate executives who put
profit over the health and safety of patients—including by using
technological innovation—will be held to account.”
According to court documents, He and Brody allegedly conspired with
others to provide easy access to Adderall and other stimulants in
exchange for payment of a monthly subscription fee. The indictment
alleges that the conspiracy’s purpose was for the defendants to
unlawfully enrich themselves by, among other things, by increasing
monthly subscription revenue and thus increasing the value of the
company. Done allegedly arranged for the prescription of over 40
million pills of Adderall and other stimulants, and obtained over
$100 million in revenue.
“The internet is a place of remarkable innovation, allowing its
users to make innumerable types of transactions with greater ease.
Such transactions, however, must always be legal,” said Deputy
Chief of the Criminal Division Matthew Yelovich for the Northern
District of California. “The indictment alleges that He and Brody
used an internet-based infrastructure to illegally distribute drug
sales and to conspire to commit health care fraud. This office will
always prosecute health care fraud and illegal drug distribution on
the internet as vigorously as we do traditional frauds and illegal
drug distribution.”
He and Brody allegedly obtained subscribers by targeting drug
seekers and spending tens of millions of dollars on deceptive
advertisements on social media networks. They also allegedly
intentionally structured the Done platform to facilitate access to
Adderall and other stimulants, including by limiting the
information available to Done prescribers, instructing Done
prescribers to prescribe Adderall and other stimulants even if the
Done member did not qualify, and mandating that initial encounters
would be under 30 minutes. To maximize profits, He allegedly put in
a place an “auto-refill” function that allowed Done subscribers to
elect to have a message requesting a refill be auto-generated every
month. He wrote that Done sought to “use the comp structure to
dis-encourage follow-up” medical care by refusing to pay Done
prescribers for any medical visits, telemedicine consultation, or
time spent caring for patients after an initial consultation, and
instead paying solely based on the number of patients who received
prescriptions.
“The defendants in this case operated Done Global Inc., an online
telehealth website that prescribed Adderall and other highly
addictive medications to patients who bought a monthly subscription.
The defendants allegedly preyed on Americans and put profits over
patients by exploiting telemedicine rules that facilitated access
to medications during the unprecedented COVID-19 public health
emergency,” said DEA Administrator Anne Milgram. “Instead of
properly addressing medical needs, the defendants allegedly made
millions of dollars by pushing addictive medications. In many
cases, Done Global prescribed ADHD medications when they were not
medically necessary. In 2022 the FDA issued a notice of shortages
in prescription stimulants, including Adderall. Any diversion of
Adderall and other prescription stimulant pills to persons who have
no medical need only exacerbates this shortage and hurts any
American with a legitimate medical need for these drugs. The DEA
will continue to hold accountable anyone, including company
executives, that uses telehealth platforms to put profit above
patient safety.”
“As more health care needs are met through telemedicine, we will
not tolerate fraud schemes that seek to recklessly exploit digital
technologies,” said Honorable Christi A. Grimm of the Department of
Health and Human Services Inspector General (HHS-OIG). “We will
continue to work with our law enforcement partners to protect the
enrollees of federal health care programs by ensuring that
requirements for the appropriate, legal prescribing of stimulants
and other drugs are always met, and those who choose to violate
them are held accountable.”
He and Brody allegedly persisted in the conspiracy even after being
made aware that material was posted on online social networks about
how to use Done to obtain easy access to Adderall and other
stimulants, and that Done members had overdosed and died. They also
allegedly concealed and disguised the conspiracy by making
fraudulent representations to media outlets to forestall government
investigations and action and induce third parties to continue
doing business with Done.
“Healthcare fraud is not a victimless crime. It levies a tremendous
cost on our nation’s healthcare systems and economy,” said
Executive Associate Director Katrina W. Berger of Homeland Security
Investigations (HSI). “Today’s announcement should serve as a
reminder that it is only a matter of time before anyone engaging in
fraudulent activity is caught and brought to justice.”
“Instead of prioritizing the health of their customers, He and
Brody’s telemedicine company allegedly prioritized profits—more
than $100 million worth—by fraudulently prescribing medications
like Adderall and other stimulants,” said Chief Guy Ficco of IRS
Criminal Investigation. “This led customers to addiction, abuse,
and overdoses, which the company tried to conceal by making false
representations to the media in order to deter oversight by
government agencies.”
He, Brody, and others also conspired to defraud pharmacies and
Medicare, Medicaid, and the commercial insurers to cause the
pharmacies to dispense Adderall and other stimulants to Done
members in violation of their corresponding responsibility;
Medicare, Medicaid, and the commercial insurers to pay for the cost
of these drugs; and Done members to continue to pay subscription
fees to Done. He and others allegedly made false and fraudulent
representations about Done’s prescription policies and practices to
induce the pharmacies to fill Done’s prescriptions. As a result,
Medicare, Medicaid, and the commercial insurers paid in excess of
approximately $14 million.
The indictment also alleges that He and Brody conspired to obstruct
justice after a grand jury subpoena was issued to another
telehealth company and in anticipation of a subpoena being issued
to Done, including by deleting documents and communications, using
encrypted messaging platforms instead of company email, and
ultimately failing to produce documents in response to a subpoena
issued to Done by a federal grand jury.
If convicted, He and Brody each face a maximum penalty of 20 years
in prison on the conspiracy to distribute controlled substances and
distribution of controlled substances counts.
The DEA, HHS-OIG, HSI, and IRS Criminal Investigation are
investigating the case.
Principal Assistant Chief Jacob Foster and Trial Attorney Raymond
Beckering III of the Criminal Division’s Fraud Section and
Assistant U.S. Attorneys Kristina Green, Katherine Lloyd-Lovett,
and Lloyd Farnham for the Northern District of California are prosecuting
the case.
The DOJ Fraud Section leads the DOJ Criminal Division’s
efforts to combat health care fraud through the Health Care Fraud
Strike Force Program. Since March 2007, this DOJ program, currently
comprised of nine strike forces operating in 27 federal districts,
has charged more than 5,400 defendants who collectively have billed
federal health care programs and private insurers more than $27
billion. In addition, the Centers for Medicare & Medicaid
Services, working in conjunction with HHS-OIG, are taking steps to
hold providers accountable for their involvement in health care
fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Any patient of Done or medical professional who has been involved
with the allegedly illegal conduct should call to report this
conduct to the DEA hotline at 646-466-5159.
An indictment is merely an allegation. All defendants are
presumed innocent until proven guilty beyond a reasonable doubt in
a court of law.
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