The Department of Justice has filed a motion seeking an immediate asset freeze and receivership against telemedicine company Geal Sea and its CEO Kyle Robertson for allegedly fraudulent prescriptions and other deceptive practices, according to court documents.
The Department of Justice last week filed an amended complaint against Geelsea and its CEO and founder Kyle Robertson, co-founder and former chief executive officer of mental health startup Celebral.
“Defendant Kyle Robertson engaged in widespread misconduct at two successive telehealth companies he founded and led over the past six years, Cerebral, Inc. and then Geal Sea, Inc., harming tens of thousands of telehealth patients,” the Justice Department wrote in the amended complaint.
Prosecutors say Geal Sea purports to provide legitimate telemedicine services, but “routine prescription orders are placed by foreign call center contractors and unlicensed non-clinicians, and the doctor’s name and National Health Care Provider Identifier (NP They are engaging in “systematic, inappropriate, and dangerous telemedicine practices,” including systematically misusing “I” numbers to order thousands of prescriptions without a doctor’s knowledge or clinical supervision for patients who have not actually ordered treatment or prescriptions. They are not even employed by Geelsea,” court documents state.
The Justice Department filed a motion to freeze assets after obtaining new documents during the discovery phase of a 2024 lawsuit against three telehealth companies.
Prosecutors allege that in 2025, Zilsey lost its certification from a crucial certification body called LegitScript.
“Mr. Robertson has falsely advertised low costs, misrepresented the nature of his telehealth services, and given empty assurances to consumers, such as ‘Pay today for $0.00’ and ‘You can cancel anytime,’ all of which lure consumers into subscriptions that are difficult to cancel, while often immediately beginning to fraudulently charge their cards,” the Justice Department alleges.
The Justice Department alleges that while Robertson led both Cerebral and Geal Sea, he “billed tens of thousands of consumers without their consent, in violation of the Restoration Online Shopper Confidence Act (ROSCA), and intentionally obstructed attempts to cancel their subscriptions.”
The Justice Department also accuses Robertson of directing the misuse of patients’ personal health information, including data about their medical conditions, symptoms and treatments, without their knowledge “to facilitate social media marketing campaigns worth millions of dollars.”
The Justice Department argues in its complaint that the receivership and asset freeze are necessary to stop “Robertson and Geelsy’s rampant conduct of actively deceiving telehealth patients, endangering their safety, and raiding their bank accounts.”
The complaint states that the consumer relief and penalties for violating FTC rules in this case could result in ZELCE’s bankruptcy.
Launching in early 2023, Zealthy offers telehealth services including GLP-1 weight loss programs, mental health care, skin care treatments, hair loss solutions, erectile dysfunction support, contraception, and hormone optimization therapy.
In November 2024, Celebral agreed to pay more than $3.6 million in fines for allegedly engaging in conduct that encouraged the unauthorized distribution of controlled substances from 2019 to 2022. The fine was part of a non-prosecution agreement with the U.S. Attorney’s Office for the Eastern District of New York. When announcing the agreement, the federal government said the payment of additional fines against Cerebral had been deferred “taking into account the company’s current financial position.”
A digital behavioral health company agreed in April 2024 to pay the government more than $7 million to resolve allegations that it disclosed consumers’ confidential personal health information and other sensitive data to third parties for advertising purposes and failed to honor easy cancellation promises.
Robertson resigned from the company in May 2022 as the company faced a Justice Department investigation into its prescribing practices in “potential violations” of the Controlled Substances Act.
