On Thursday, the Department of Justice (DOJ) announced that the founder and CEO of a California-based digital health company and its clinical president were arrested in connection with their alleged participation in a scheme to distribute Adderall over the internet and conspire to commit health care fraud in connection with the submission of false and fraudulent claims for repayment for Adderall (and other stimulants).

Founder and CEO of Done Global Inc. Ruthia He was arrested in Los Angeles, and David Brody, the clinical president of Done Health P.C. (collectively, Done), was arrested in San Rafael, California. The arrests are the result of a joint effort by the Drug Enforcement Agency, (DEA), Health and Human Services Office of the Inspector General (HHS-OIG), Homeland Security Investigations (HSI), and Internal Revenue Service (IRS) Criminal Investigation.

“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 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.”

According to court documents, He and Brody allegedly conspired with others to provide easy access to Adderall and other stimulants for a monthly subscription fee. The indictment alleges that the purpose was for the defendants to unlawfully enrich themselves by increasing monthly subscription revenue and increasing the company’s value. Done prescribed over 40 million pills of Adderall and other stimulants generating over $100 million in revenue.

“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 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.”

He and Brody gained subscribers by targeting drug seekers and spending tens of millions of dollars on deceptive advertisements on social media networks. It is alleged that they also 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 members didn’t qualify, and mandating initial virtual doctor visits would be under 30 minutes.

“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 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.”

To maximize profits, He allegedly created an auto-refill function allowing subscribers to have a message requesting a refill be auto-generated every month. According to the indictment, He wrote that Done sought to “use the comp structure to dis-encourage follow-up” medical care by refusing to pay prescribers for 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.

He and Brody also allegedly continued even after being made aware that material posted on social media instructed users how to use Done and get Adderall prescriptions and that members had overdosed and died. They also allegedly concealed and disguised their efforts by making fraudulent representations to news media in an attempt to stall government investigations and persuade third parties to continue doing business with Done.

“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, Brody, and others 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 responsibility. They ensured Medicare, Medicaid, and commercial insurers pay for the drugs while requiring members to continue to pay subscription fees.

He and others also allegedly made false and fraudulent representations about Done’s prescription policies and practices to induce pharmacies to fill prescriptions. As a result, Medicare, Medicaid, and commercial insurers paid more than $14 million.

“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.”

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. Both allegedly deleted documents and communications, used encrypted messaging platforms instead of a company email, and ultimately failed to provide documents in response to a subpoena issued 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.

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Arturo Dominguez

Arturo is an anti-racist political nerd. He is an upcoming author, journalist, advocate for social justice, and a married father of three. He is a top writer on Medium and a regular contributor to several news media outlets. He writes educational and informative material about systemic racism, white supremacy, and racial injustice.

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