Digital Health Company Executives Convicted in First-Ever Federal Drug Distribution Prosecution Related to Telehealth

The Department of Justice (“DOJ”) is no stranger to prosecuting cases with a nexus to telehealth, especially those that involve fraud schemes billing for durable medical equipment, like braces and orthotics, or laboratory testing, such as genetic testing or COVID-19 related conditions. However, the DOJ had never prosecuted a case involving the distribution of controlled substances via telehealth. That all changed on June 13, 2024, when the DOJ announced the arrests of Ruthia He and David Brody, in connection with their operation of Done Global Inc. (“Done”) and their participation in a scheme to prescribe Adderall over the internet.

The Verdict

On November 19, 2025, a federal jury in the Northern District of California convicted Ruthia He, founder and CEO of Done, and David Brody, a psychiatrist and the company’s clinical president, in connection with their roles in an internet-based scheme to unlawfully distribute Adderall and other stimulants, and to conspire to commit health care fraud in connection with the submission of false and fraudulent claims for reimbursement to Medicare, Medicaid and commercial insurers. The DOJ previously billed the case as its first criminal drug distribution prosecution tied to a digital health company’s telemedicine prescribing model. He and Brody were convicted of one count of conspiracy to distribute controlled substances, four counts of distribution of a controlled substance, and one count of conspiracy to commit health care fraud. He was also convicted of one count of conspiracy to obstruct justice. The prosecution was a joint effort by the DOJ’s Criminal Division Health Care Fraud Unit and the United States Attorney’s Office for the Northern District of California.

The Evidence

According to the DOJ, the evidence demonstrated that He and Brody operated a subscription based virtual platform that arranged the provision of over 40 million pills of Adderall and other stimulants while generating more than $100 million in revenue. He and Brody spent over $40 million on deceptive advertising on social media, targeting drug-seeking patients, as well as launching a campaign during the COVID-19 pandemic to convince Americans they were suffering from attention deficit hyperactivity disorder. At the same time, they imposed “hard limits” on clinical discretion by capping the time allowed during an initial patient examination and refusing to pay for follow-up care, even going as far to enact a policy where Done prescribers were not allowed to have any follow-up encounters with Done members.

Prescribers received lucrative payments, sometimes hundreds of thousands of dollars per year, for writing prescriptions for Adderall and other stimulants without clinical interaction and for Done members whom they lacked a pre-existing practitioner-patient relationship. He implemented the use of an “auto-refill” feature that issued prescriptions for years based solely on autogenerated monthly emails, and in some instances, prescriptions for deceased Done members. He and Brody prohibited practitioners from discharging patients, even after learning of prescribing red flags, including patients abusing other medications, and that some patients suffered from mental health conditions exacerbated by the prescriptions like “Adderall-induced psychosis.”

To ensure continued subscription revenue, He, Brody and others conspired to defraud payors through false prior authorizations, claiming adherence to the DSM-5 in determining a diagnosis, utilization of urine drug screening to monitor prescription usage, and falsely claiming that non-stimulant regimes had been previously tried without success. All of which caused Medicare, Medicaid, and commercial insurers to pay Done more than approximately $14 million.

He’s conviction for conspiracy to obstruct justice was based in part on her relocation of Done to China in an effort to restrict the DOJ’s access to personnel and evidence, the destruction of incriminatory documents and communications, the transfer of $1 million to a shell company in China, and efforts to identify countries that did not have extradition.

Sentencing is set for February 25, 2026, where both He and Brody face a maximum penalty of 20 years imprisonment on the conspiracy to distribute controlled substances, and distribution of controlled substances counts.

Continued Focus on Prescribing of Controlled Substances via Telehealth

In discussing these convictions, DOJ leadership made clear their ongoing commitment to police prescriptions for controlled substances issued via telehealth. Acting Assistant Attorney General Matthew R. Galeotti, who oversees the Criminal Division at DOJ, stated, “This verdict sends a clear message that the Criminal Division will hold accountable criminals who attempt to exploit telehealth to write illegal prescriptions for personal gain.”

On the heels of this successful first-of-its-kind prosecution, it is expected that the DOJ will continue efforts to identify companies believed to be engaged in similar conduct, particularly where allegations of patient harm exist.

Compliance Considerations

While these are certainly unique facts involving telehealth to facilitate both healthcare fraud and the illegal distribution of controlled substances, coupled with attempts to obstruct the investigation, the takeaways for legitimate prescribers, particularly those in digital health, are clear:

• Preserve independent clinical judgment and avoid policies that constrain encounter length or incentivize prescriptions over continuity of care.
• Prohibit auto-refill or refill without visit models for controlled substances and rather require well documented, clinically appropriate follow-up treatment.
• Be mindful of writing prescriptions for patients where there is no pre-existing practitioner-patient relationship.
• Implement and follow robust medical necessity protocols, including proper documentation of adherence to DSM-5 criteria, and the administration of appropriate diagnostic testing.
• Do not ignore red flags, identify and respond to notifications of substance misuse, adverse psychiatric events, and third-party safety reports.

For more information about this and other enforcement trends, please contact Jay McCormack at (617) 357-3776 and jmccormack@verrill-law.com.  Jay is a Partner in the White Collar Defense & Government Enforcement, and Health Care & Life Sciences practices at Verrill. He is a former federal prosecutor, who specialized in health care fraud. He also previously served as the Acting U.S. Attorney for the District of New Hampshire.