Ruthia He, founder and former CEO of telehealth startup Done Global, was sentenced Tuesday to six years in prison and a $1 million fine in connection with the Adderall fraud scheme.
He was found guilty in November of conspiring to distribute Adderall and other stimulants online, along with a former top doctor at a telemedicine company. A San Francisco jury found He and the company’s former clinical president, David Brody, guilty of two counts of conspiracy (one related to health care fraud) and four counts of distribution of a controlled substance. He was also convicted of conspiracy to obstruct justice.
According to the Department of Justice, he orchestrated a scheme that used her company’s technology platform, reimbursement system, and clinical protocols to illegally distribute more than 37 million Adderall pills, defraud insurance companies of more than $12 million, and obstruct subsequent federal investigations. According to the Department of Justice, management’s goal was to build a billion-dollar company by fostering user growth through a prescription subscription business model. In this business model, patients pay a monthly fee for their prescriptions, which are automatically refilled and retrieved through a frictionless technology platform.
Brody was also sentenced to a reduced sentence of two years in prison and a $1 million fine. U.S. District Judge Charles Breyer handed down the sentence.
According to federal prosecutors, the Justice Department alleges that he deceived Americans into believing he had attention-deficit hyperactivity disorder (ADHD), falsely diagnosed patients with ADHD, and spent more than $40 million on social media ads to distribute Adderall, including to patients the company had warned were suffering from Adderall psychosis, bipolar disorder, depression, anxiety, and other mental health conditions made worse by prescription stimulants.
The Justice Department said evidence at trial showed the defendants used a combination of carrots and sticks to induce unnecessary prescriptions. The defendants refused to hire or fired Dr. Dong, who did not participate in the conspiracy, while paying up to $60,000 per month to a clinician who signed an Adderall prescription every 30 seconds. Federal prosecutors alleged during the trial that the defendants pressured clinicians to diagnose ADHD in initial visits that were much shorter than standard testing, and pressured clinicians to prescribe stimulants to patients who did not believe they had ADHD or who were at risk of serious side effects.
Defendants also used an “auto-refill” platform technology feature after the initial diagnosis to minimize follow-up appointments. “These policies kept some patients from seeing a clinician for years and continued to allow involuntary psychiatric holds and refills even after the patient’s death,” the Justice Department said in a press release announcing the ruling.
The Justice Department alleged that Mr. Brody himself personally wrote prescriptions for 394,324 Schedule II stimulant pills prescribed to 6,559 Dunn members, but never evaluated those members or reviewed their patient records.
He, Brody and other employees of the company also filed false and fraudulent pre-authorization applications with the insurance company, which falsely claimed that Dorn followed the DSM-5 in diagnosing ADHD, used a urine drug screen, and had previously tried non-stimulant drugs without success. As a result, Medicare, Medicaid and private insurance companies paid out approximately more than $12.3 million, according to federal prosecutors.
The government argued during trial that Dunn’s business operations continued even after concerned families repeatedly notified him that their children were suffering from bipolar disorder, Adderall-induced psychosis, or other mental health conditions that could worsen with continued prescriptions. Three mothers testified at trial about their desperate efforts to warn Dorn not to prescribe the drug to their children.
The Justice Department alleged that Mr. Hugh moved his operations to China to prevent access to personnel and evidence as the federal investigation continued. The government accused He of personally deleting incriminating documents and messages from the company’s servers and directing employees to do so. As the investigation approached, he continued to move assets and company operations overseas. She researched non-extradition countries on her laptop and saved screenshots of the results, the Justice Department alleged.
“Rutia He hid behind a drug cloak to deceive the public, defraud health care programs, and illegally sell highly addictive drugs to vulnerable patients,” Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Bureau said in a statement. “Lutia He’s business model puts medical needs and patient care aside in favor of profit and greed. Today’s ruling is a clear warning to all digital health chambers. If you incorporate fraud and 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 are also stealing from the elderly, disabled, and low-income Americans who rely on these programs, as well as the taxpayers who fund them,” Centers for Medicare and Medicaid Services (CMS) Administrator Mehmet Oz, M.D., said in a statement. “But it’s never just about money. The evidence prosecutors have assembled in this case confirms what we’ve seen time and time again: scammers who want to steal your money don’t care about stealing your health or even your life. CMS is proud to work with the Department of Justice and the White House Task Force to Combat Fraud to put criminals like He and Brody behind bars so they can no longer steal from hardworking taxpayers or harm vulnerable Americans.”
