CEO of Digital Health Company Arrested for Fraud
On Thursday, June 13, the Office of Public Affairs of the U.S. Department of Justice (DOJ) announced in a press release the prosecutions of the DOJ’s first criminal drug distribution. Ruthia He, the founder and CEO of California-based digital health company Done Global Inc., and its clinical president, David Brody, were arrested on Thursday for alleged participation in a scheme to supply Adderall online and submission of fraudulent reimbursement claims.
According to the press release, court documents noted that He and Brody allegedly conspired to provide easy access to Adderall as well as other stimulants. Drug seekers were targeted through deceptive ads on social media. By limiting information to Done prescribers, drugs were prescribed to members, who paid a monthly subscription fee, even if they didn’t qualify. Refills were put on auto-refill to maximize profits, and follow-ups were discouraged by refusing payment to Done prescribers for consultations after the first appointment.
“The indictment alleges that the conspiracy’s purpose was for the defendants to unlawfully enrich themselves by, among other things, 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,” according to the news release.
“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,” noted Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the DOJ’s Criminal Division, in a statement.
“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 in a statement.
“In 2022, the U.S. Food and Drug Administration (FD) 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,” mentioned Drug Enforcement Administration (DEA) Administrator Anne Milgram in a statement.
The news release detailed that He and Brody allegedly persisted in the scheme even after information was posted on social networks about how to use Done to obtain easy access to stimulants and that Done members had overdosed and died. He, Brody, and others also conspired to defraud pharmacies and Medicare, Medicaid, and commercial insurers to cause the pharmacies to dispense stimulants. As a result, Medicare, Medicaid, and the commercial insurers paid more than approximately $14 million.
“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,” according to the news release.
Done Global released the following statement: "
"Done Global strongly disagrees with the criminal charges filed last week against our founder, Ruthia He, and Dr. David Brody, which are based on events that principally occurred between February 2020 and January 2023. Since our founding, Done Global has worked to make mental health care accessible for tens of thousands of Americans trapped in a spiraling national crisis. Done Global will continue to operate – and do everything in our power to ensure that tens of thousands of Americans that rely on us do not lose access to their mental health care. At the same time, we will continue to support our clinicians as they exercise independent clinical judgment, practice evidence-based medicine, and provide best-in-class health care."
