The founder, CEO and clinical president of Done Health, a digital healthcare company that provides chronic psychiatric disease management, were arrested Thursday on suspicion of obstructing justice and conspiracy to commit fraud in connection with their involvement in a scheme to distribute Adderall online.
by Department of JusticeLucia He, founder and CEO of California-based Done Global Inc., and David Brody, clinical president of Done Health, were arrested on charges of submitting false and fraudulent claims for reimbursement for Adderall and other stimulants, conspiring to commit health care fraud, obstruction of justice and participating in a scheme to distribute Adderall online.
“As alleged, the defendants designed and executed a $100 million scheme to exploit the COVID-19 pandemic to defraud taxpayers and increase easy access to Adderall and other stimulants with no legitimate medical purpose,” Attorney General Merrick B. Garland said in a statement.
According to the indictment, He and Brody conspired with others to make Adderall and other stimulants readily accessible through telemedicine and spent tens of millions of dollars on deceptive social media advertising.
According to the indictment, the two men obtained stimulants, including Adderall, in exchange for monthly subscription payments, and Brody and the other men allegedly illegally enriched themselves by inflating monthly subscription revenues, thereby increasing the value of their company.
“They generated more than $100 million in revenue by arranging for the prescription of more than 40 million pills,” Principal Deputy Attorney General Nicole M. Argentieri, the Justice Department’s Criminal Division, said in a statement.
He and Brody also allegedly built the digital health platform to facilitate access to Adderall and other stimulants by requiring that a member’s initial consultation with a prescriber last less than 30 minutes and by directing prescribers to prescribe Adderall and other stimulants even when members did not meet the members’ eligibility requirements.
It is also said to have implemented an “auto-replenishment” feature that allows subscribers to choose to automatically send out replenishment requests each month.
According to the indictment, Hee and Brody continued with the scheme even after they learned how easily Adderall and other stimulants could be obtained through Dawn’s platform and after seeing social media posts about Dawn members dying from overdoses.
Digital Health executives also allegedly conspired to defraud pharmacies, private insurers, Medicaid and Medicare by having pharmacies prescribe Adderall and other stimulants to Done members and then paying for the drugs, while Done members continued to pay their Done membership dues.
According to the indictment, Medicaid, Medicare and private insurers were allegedly defrauded out of more than $14 million.
He and Brody are also accused of conspiring to obstruct justice by deleting documents and communications in anticipation of a subpoena being issued for Dorn after another telehealth company received a grand jury subpoena. The two also communicated using an encrypted messaging platform rather than company email.
Brody was taken into custody in San Rafael, California, on Thursday, while He was arrested in Los Angeles. If convicted, both executives face up to 20 years in prison each.
The indictment marks the first time the Department of Justice has brought criminal drug distribution charges against a digital health company.
“Those who seek to profit from their addiction by illegally distributing controlled substances over the Internet should know that they cannot hide their crimes and that the Department of Justice will hold them accountable,” Attorney General Garland said.
