Healthcare executives at the online healthcare company Done were arrested Thursday for alleged fraud, according to a press release from the U.S. Department of Justice. The executives are accused of providing “easy access” to Adderall and other stimulants which resulted in “false and fraudulent claims for reimbursement” by patients who supposedly didn’t need the medication.
Ruthia He, founder and CEO of Done Global, was arrested in Los Angeles and David Brody, the clinical president of Done Health, was arrested in San Rafael, California, according to the DOJ.
The Justice Department alleges Done seized on the widespread shift to video-based telemedicine that started with the covid-19 pandemic in 2020 and provided a way for people who didn’t actually need Adderall to access the drug. Done allegedly spent millions on social media ads “targeting drug seekers,” who shouldn’t have been receiving medications like Adderall. The company didn’t immediately respond to an email on Thursday.
“As alleged, 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,” said Attorney General Merrick B. Garland.
Authorities also allege Brody and He obstructed justice by doing things like “using encrypted messaging platforms instead of company email,” though it’s not immediately clear how that could be a crime. Some of the alleged crimes frankly sound pretty silly in a for-profit healthcare system where the goal of private companies is to generate as much revenue as possible.
One example from the DOJ’s press release that doesn’t necessarily sound nefarious when you remember we live in a capitalist system:
The indictment alleges that the conspiracy’s purpose was for the defendants to unlawfully enrich themselves by, among other things, by [sic] increasing monthly subscription revenue and thus increasing the value of the company. Done allegedly arranged for the prescription of over 40 million pills of Adderall and other stimulants, and obtained over $100 million in revenue.
News of the arrests is happening at a time when the U.S. authorities have created an artificial shortage of Adderall and other stimulants which dates back to 2022, often forcing patients to try alternative means of getting their prescription medications online. The DEA meets with drug companies regularly to determine how many stimulants can be released to pharmacies in a given month, which pretty much guarantees that even if there’s abuse in the system, people with legitimate prescriptions are going to suffer when they can’t find any supply.
The U.S. Department of Homeland Security was also involved in the investigation and the Secretary of Homeland Security, Alejandro N. Mayorkas, joined in the DOJ’s statement.
“The individuals charged today allegedly disregarded the first rule of medical care—do no harm—in order to maximize profits, and there is no place for such fraud in our healthcare system,” said Mayorkas. “The indictment levied against these individuals sends a clear message: the Department of Homeland Security, our Homeland Security Investigations personnel, and our partners across the federal government will hold accountable those providers and prescribers who prey on their patients.”
Brody and He face 20 years in prison for conspiracy to distribute controlled substances and the distribution of controlled substances. Both will make their initial appearances in court today, according to the DOJ.
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