Founder And President Of ADHD Startup Convicted In Adderall Case

SAN FRANCISCO, CA — In a case that has the potential to bring more scrutiny to new ways of providing care, a jury convicted the founder and president of an ADHD telehealth start-up in a years-long criminal conspiracy intended to build a billion-dollar technology company from Adderall prescriptions.

A federal jury in November convicted Ruthia He, the founder and CEO of Done, a California-based digital health company, and David Brody, its clinical president, for their roles in a scheme to illegally distribute Adderall over the internet and conspire to commit health care fraud in connection with the submission of fake claims for reimbursement.

Federal prosecutors said He and Brody transformed their Silicon Valley telehealth startup into a mass-production stimulant mill, dispensing more than 40 million Adderall and other stimulant pills and generating over $100 million in unlawful prescriptions.

The jury convicted both of one count of conspiracy to distribute controlled substances, four counts of distribution of controlled substances, and one count of conspiracy to commit health care fraud.

They each face a maximum penalty of 20 years in prison on the conspiracy to distribute controlled substances and distribution of controlled substances counts.

He and Brody, "...built a 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,” said Deputy Inspector General Christian Schrank of the Department of Health and Human Services.

Done Global Inc.

He, the founder and CEO of Done Global Inc., was arrested in Los Angeles. Brody, the clinical president of Done Health P.C., was arrested San Rafael.

According to court records, He and Brody spent over $40 million on deceptive advertisements on social media networks, which sought to convince consumers during the COVID-19 pandemic that they had ADHD, according to prosecutors. In addition, He and Brody paid for targeted keyword search advertisements for drug seekers who wanted to obtain Adderall without a legal prescription.

He and Brody then sought to impose “hard limits” on clinical discretion by limiting the length of the initial appointment to less than half that of a typical psychiatric examination and by seeking to increase profits by refusing to pay for any follow-up treatment, according to prosecutors.
To keep the operation going, He paid nurse practitioners around the country up to $60,000 per month to refill prescriptions without clinical interaction, and enabled an “auto-refill” technology feature that allowed patients to receive prescriptions for years based on an auto-generated monthly email requesting additional prescriptions. The auto-refill policy, in some instances, prosecutors said, resulted in prescriptions being issued for deceased patients. He instructed employees that successful technology companies profit off addiction, and offered an expensive luxury electric vehicle to employees who broke the law. Brody told nurses to continue prescribing Adderall, even to patients who were abusing other medications, and to disregard the risk of going to jail.

He and Brody also prohibited independent clinical practitioners from discharging patients, and patients were not discharged and continued to receive Adderall even after concerned family members repeatedly notified Done that their children were suffering from bipolar, Adderall-induced psychosis, or other mental health conditions that continued prescriptions could worsen.

To ensure members continued paying monthly subscription fees, prosecutors said He, Brody, and others conspired to defraud insurers so that Done members could use insurance to pay for Adderall dispensed at pharmacies. He, Brody, and others submitted false and fraudulent prior authorization requests to insurers, which claimed that Done followed the DSM-5 in diagnosing ADHD, utilized urine drug screens, and falsely claimed that they tried non-stimulants without success. As a result, Medicare, Medicaid, and the commercial insurers paid in excess of approximately $14 million.

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,” U.S. Attorney General Merrick B. Garland said in a statement.

Make Believe Asia
The defendants denied the existence of these policies and claimed Done was run by independent clinical leadership. To obstruct the government’s investigation, prosecutors said the evidence at trial showed that He moved operations to China to hide evidence. She limited her communications on company platforms, used encrypted messaging apps with disappearing messages, and deleted incriminatory documents, such as language encouraging Done providers to provide Adderall even to patients who did not have ADHD.

Prosecutors also accused He of transferring over $1 million to a Chinese shell company named Make Believe Asia, conducting internet searches for countries that did not have extradition. She was stopped leaving the country.

Their trial represents the first federal criminal drug distribution prosecution related to telemedicine prescriptions. The case — highlighting new dimensions of health care fraud, technology, and public health events like Covid — could prompt the government to bring greater attention to virtual health platforms and their claims.

“This case represents one of the most egregious abuses of telehealth we’ve seen,” said Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General. “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."

U.S. Attorney Craig H. Missakian for the Northern District of California said the prosecution marks the beginning of a sustained effort.