On June 13, the U.S. Department of Justice announced that the founder and CEO of a California-based telehealth company, as well as the company’s clinical president, were charged in what the feds are calling a fraud worth over $100 million.

According to the indictment, Ruthia He, the founder and CEO of Done Global Inc., and David Brody, the clinical president of Done, conspired in a scheme to distribute Adderall and other ADHD medications to patients who did not need them, and to bill various insurers for the unnecessary drugs.

The DOJ’s press release alleges that He and Brody “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.”

Specifically, the indictment alleges that the defendants availed themselves of looser restrictions regarding the online prescribing of controlled substances during the COVID-19 pandemic.  The indictment alleges that He and Brody spent tens of millions of dollars on “deceptive advertisements” posted on social media platforms, including ads that featured young people “discovering” on camera that they had ADHD.

According to the indictment, a prospective patient need only take a minute-long assessment to evaluate if they should be treated for ADHD, the defendants limited what information its prescribing providers could see, and told those providers to prescribe drugs even where the patient did not qualify.  The defendants also allegedly instructed their prescribing providers to keep initial patient consultations below 30 minutes.

The indictment also alleges that the defendants allegedly obtained subscribers by targeting drug seekers and that He put into place an “auto refill” function that allowed Done subscribers to have a message requesting a refill be auto-generated every month.  In one communication quoted in the indictment, He allegedly wrote that Done should “use the comp structure to dis-encourage [sic] follow-up” medical care.

The indictment alleges that Done Global arranged for the prescribing of over 40 million pills.

In its press release, Health and Human Services Inspector General Christi Grimm said: “As more health care needs are met through telemedicine, we will not tolerate fraud schemes that seek to recklessly exploit digital technologies. 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.”

The attorneys at Chilivis Grubman represent healthcare providers, executives, and entrepreneurs in connection with government investigations, both criminal and civil.  If you are under investigation, please feel free to contact us today.