A federal jury in San Francisco has convicted Ruthia He, founder and CEO of the digital health company Done, and David Brody, the company's clinical president, for their involvement in a large-scale scheme to illegally distribute Adderall and commit health care fraud. The scheme involved distributing prescription stimulants over the internet and submitting false claims for reimbursement.
“These defendants carried out a $100 million scheme to unlawfully provide easy online access to Adderall and other stimulants by targeting drug seekers, engaging in deceptive advertising, and putting profits above patient care,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “This verdict sends a clear message that the Criminal Division will hold accountable criminals who attempt to exploit telehealth to write illegal prescriptions for their personal gain. Innovation in health care must never come at the cost of patient safety, professional integrity, or the rule of law.”
U.S. Attorney Craig H. Missakian for the Northern District of California commented on how technology was used in this case: “Not all drug dealers operate in the shadows or on street corners. Some, like Ruthia He and David Brody, use computers and social media instead. Doctors take an oath to do no harm. David Brody and other doctors were only too willing to sell their integrity to He and put money ahead of patient wellbeing. Medical necessity must always drive the decision to prescribe controlled substances like Adderall and other stimulants. Ruthia He and David Brody violated that core principle when they exploited telehealth rules to push prescription medication, and hurt patients in the process. This prosecution marks the beginning of a sustained effort. Digital health companies that engage in unlawful drug distribution should take notice that they will not escape accountability.”
Christian J. Schrank, Deputy Inspector General for Investigations at HHS-OIG, stated: “This case represents one of the most egregious abuses of telehealth we’ve seen. The defendants built a brazen business model based on addiction, deception, and disregard for patient safety — flooding the market with controlled substances while defrauding federal health care programs. Their intentional disregard for patient safety and the law put lives at risk and eroded public trust in digital medicine. HHS-OIG will relentlessly pursue those who exploit innovation to endanger lives and steal from taxpayers.”
Special Agent in Charge Harry T. Chavis from IRS Criminal Investigation New York said: “The fraudulent acts of He and Brody led to clients’ substance abuse, addiction and, in some cases, overdose. Instead of putting the care of their customers first, they prioritized their own greed by fraudulently prescribing more than $100 million worth of Adderall and other stimulants. These were shameful acts, and a jury of their peers agreed. Both He and Brody will now face the consequences of this egregious fraud.”
Court documents showed that He and Brody worked with others to create a technology company aimed at providing easy access to more than 40 million pills through monthly subscriptions as part of efforts to attract investors.
The company spent over $40 million on advertising via social media during the COVID-19 pandemic encouraging individuals who felt unstructured during lockdowns that they might have ADHD—a marketing tactic designed to increase demand for stimulant prescriptions such as Adderall.
To boost profits further, evidence revealed that nurse practitioners were paid up to $60,000 per month just for refilling prescriptions without actual clinical interactions with patients; an auto-refill feature allowed people—even deceased individuals—to receive ongoing prescriptions automatically based solely on email prompts.
Internal policies instructed employees about profiting from addiction; incentives included offering luxury electric vehicles as rewards for breaking laws related to prescription practices.
He also sought ways around legal oversight by moving operations abroad—specifically relocating activities to China—and attempting actions such as deleting incriminating documents or transferring funds overseas.
The fraudulent activities led insurers—including Medicare/Medicaid—to pay more than $14 million due to false claims submitted under misleading information about diagnoses or treatment protocols.
Media scrutiny emerged as early as 2022 regarding Done's practices around easy online access to Adderall; when questioned by press outlets or pharmacies about its methods or leadership structure (including whether independent clinicians made decisions), defendants issued misleading statements denying central control or certain business practices despite evidence showing otherwise.
Both He and Brody were convicted on charges including conspiracy related both to distributing controlled substances as well as committing health care fraud; sentencing is scheduled for February 25th next year with each facing potential prison terms up 20 years per relevant count.
Multiple agencies contributed investigative support including DEA (Drug Enforcement Administration), HHS-OIG (Department of Health & Human Services Office Inspector General), HSI (Homeland Security Investigations), along with IRS Criminal Investigation teams.
Prosecution was handled by officials from both DOJ’s Fraud Section—which leads national efforts against healthcare-related fraud—and local U.S Attorney's office staff from Northern California district.
Since March 2007 through its Health Care Fraud Strike Force Program—the DOJ has charged over 5,800 defendants linked collectively with more than $30 billion billed improperly across public/private insurers; CMS (Centers for Medicare & Medicaid Services) continues working closely with HHS-OIG toward holding providers accountable within similar schemes (www.justice.gov/criminal-fraud/health-care-fraud-unit).
