Telehealth CEO and clinical president arrested in $100m Adderall scheme

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US investigators have charged the founder and CEO of a telehealth firm who is indicted of running a $100m (£78m) scheme to fraudulently distribute over 40m pills of Adderall and other controlled substances.
US investigators have charged the founder and CEO of a telehealth firm who is indicted of running a $100m (£78m) scheme to fraudulently distribute over 40m pills of Adderall and other controlled substances.

US investigators have charged the founder and CEO of a telehealth firm who is indicted of running a $100m (£78m) scheme to fraudulently distribute over 40m pills of Adderall and other controlled substances.

Fraudulent Distribution Charges

US investigators have arrested Ruthia He, the founder and CEO of Done Global, along with David Brody, the company’s clinical president, for their alleged roles in a $100 million scheme to fraudulently distribute over 40 million pills of Adderall and other controlled substances.

US Attorney General Merrick Garland announced that the pair conspired to exploit telemedicine rules, which had been loosened during the COVID-19 pandemic, to provide easy access to these stimulants without legitimate medical purposes.

The Company and Its Practices

Done Global, a San Francisco-based start-up, gained popularity during the pandemic by offering an online subscription service for obtaining Adderall.

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This medication is commonly used to manage symptoms of ADHD, such as difficulty focusing. Ms. He was arrested in Los Angeles, while Dr. Brody was detained in San Rafael, California. Both face charges of controlled substance distribution, with potential prison sentences of up to 20 years if found guilty.

Allegations and Scheme Details

Principal Deputy Assistant Attorney General Nicole Argentieri highlighted that this case marks the Justice Department’s first criminal drug distribution prosecution related to telemedicine prescribing through a digital health company.

The charges accuse He and Brody of spending millions on deceptive social media advertisements and increasing subscription fees to unlawfully enrich themselves by raising the company’s value.

Exploiting Telemedicine and Ignoring Safety

The defendants allegedly limited information available to prescribers and mandated that initial screenings for new patients last no longer than 30 minutes.

They instructed prescribers to approve medications even for patients who did not medically qualify. Despite being aware of online discussions on how to misuse Done’s services to obtain Adderall, and reports of overdoses and deaths among their members, the executives continued their illegal practices.

Impact on Public Health and Legal Consequences

The alleged scheme included defrauding Medicare, Medicaid, and pharmacies out of at least $14 million.

The defendants are also accused of conspiring to obstruct justice by deleting documents and emails. This case comes amid a national shortage of Adderall, exacerbating concerns about the drug’s misuse and distribution.

The Justice Department’s actions underscore the serious consequences of exploiting telemedicine for illegal drug distribution and the commitment to holding those responsible accountable.

Gary Monroe

Gary Monroe is a seasoned contributor to the Los Angeles Business Magazine, where he offers insightful analysis on local business trends and economic developments. With a focus on Los Angeles' dynamic commercial landscape, Gary's articles provide valuable perspectives for entrepreneurs and business professionals in the city.

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