Ruthia He, the founder and former chief executive officer of telehealth startup Done Global, was sentenced to six years in prison on Tuesday and fined $1 million in connection with an Adderall fraud scheme.
He, along with a former top doctor at the telehealth company, was convicted in November of conspiring to distribute Adderall and other stimulants online. A San Francisco jury found He, and David Brody, the company's former clinical president, guilty on two conspiracy counts—one count related to healthcare fraud—and four counts of distribution of controlled substances. He was also convicted of one count of conspiracy to obstruct justice.
According to the Department of Justice, He orchestrated a scheme that used her company’s technology platform, compensation structure and clinical protocols to unlawfully distribute over 37 million pills of Adderall, defraud insurers of over $12 million and obstruct the federal investigation that followed. The executives' aim was to build a $1 billion company by fueling user growth through a subscription for prescription business model whereby patients paid a monthly fee for prescriptions that were automatically refilled and obtained through a frictionless technology platform, according to the Department of Justice.
Brody was separately sentenced to a shorter sentence, two years in prison, and a fine of $1 million. U.S. District Judge Charles Breyer handed down the sentences.
The DOJ alleges that He spent over $40 million on social media advertisements to deceive Americans into believing they had attention deficit hyperactivity disorder (ADHD), falsely diagnosing patients with ADHD and distributing Adderall, including to patients who the company was warned were suffering from Adderall psychosis, bipolar, depression, anxiety, and other mental health conditions that were worsened by stimulant prescriptions, according to federal prosecutors.
Evidence at trial showed that the defendants used a combination of carrots and sticks to cause unnecessary prescriptions, the DOJ said. The defendants refused to hire or fired Done clinicians who did not participate in the conspiracy, while paying up to $60,000 per month to clinicians who signed Adderall prescriptions every 30 seconds. The defendants pressured clinicians to diagnose ADHD in initial visits much shorter than a typical examination and pressured them to prescribe stimulants to patients who the clinicians did not believe had ADHD or who were at risk for serious side effects, federal prosecutors alleged during the trial.
The defendants also used an “auto-refill” platform technology feature after an initial diagnosis to minimize follow-up appointments. "Because of these policies, some patients went years without seeing clinicians, who continually authorized refills even through involuntary psychiatric holds or after the patients had died," the DOJ wrote in a press release announcing the sentencing.
Brody himself personally wrote prescriptions for 394,324 Schedule II stimulant pills prescribed to 6,559 Done members who he never evaluated or even reviewed a single patient record, the DOJ alleged.
He, Brody and others at the company also 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 non-stimulants had previously been tried without success. As a result, Medicare, Medicaid and the commercial insurers paid in excess of approximately $12.3 million, according to federal prosecutors.
Done's business practices continued even after concerned family members repeatedly notified Done that their children were suffering from bipolar, Adderall-induced psychosis, or other mental health conditions that could be worsened by continued prescriptions, the government argued during trial. Three mothers testified at trial about their desperate efforts to warn Done that it should not be prescribing to their children.
As the federal government's investigation continued, He moved operations to China to make personnel and evidence unavailable, the DOJ alleged. The government accused He of personally deleting and directing employees to delete incriminatory documents and messages from the company servers. As the investigation closed in, He continued to move assets and company operations abroad. She researched non-extradition countries on her laptop and saved a screenshot of the results, the DOJ alleged.
“Ruthia He hid behind the cloak of medicine to deceive the public, defraud health care programs, and unlawfully deal highly addictive drugs to vulnerable patients,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division, in a statement. “Ruthia He’s business model cast aside medical necessity and patient care in favor of profit and greed. Today’s sentence is a clear warning to every digital health boardroom: if you build fraud or illegal drug distribution into your growth model, the Department of Justice will find you and bring you to justice.”
“When fraudsters steal from Medicare and Medicaid, they’re also stealing from the elderly, disabled, and low-income Americans who depend on these programs and from the taxpayers who fund them,” Mehmet Oz., M.D., Centers for Medicare and Medicaid Services (CMS) Administrator in a statement. “But it’s never just about the money. The evidence prosecutors assembled in this case confirms what we’ve seen countless times before: that scammers who are willing to steal your money don’t mind stealing your health or even your life. CMS is proud to work alongside the Justice Department and the White House Task Force to Eliminate Fraud to put criminals like He and Brody behind bars, where they can’t steal from hardworking taxpayers or harm vulnerable Americans anymore.”