A federal jury last week convicted the founder and clinical president of a San Francisco-based digital health company in what prosecutors called one of the most brazen telehealth schemes ever discovered.
Jurors on Nov. 21 found Ruthia He, CEO of Done, and Dr. David Brody, the company’s clinical president, guilty of conspiring to distribute controlled substances and committing health care fraud. He was also convicted of conspiring to obstruct justice.
Both face up to 20 years in prison on the most serious charges when they are sentenced on Feb. 25, the U.S. Attorney’s Office for the Northern District of California said in a statement.
Federal prosecutors said He and Brody turned their Silicon Valley telehealth platform into a high-volume stimulant pipeline, one that dispensed more than 40 million pills of Adderall and other stimulants and made more than $100 million in illegal prescriptions.
“(They) built a business model based on addiction, deception, and disregard for patient safety — flooding the market with controlled substances while defrauding federal health care programs. Their intentional disregard for patient safety and the law put lives at risk and eroded public trust in digital medicine,” said Deputy Inspector General Christian Schrank of the Department of Health and Human Services.
According to evidence presented at trial, He and Brody poured more than $40 million into social media ads that encouraged vulnerable people, including those struggling with pandemic isolation, to believe they had ADHD. They also paid for targeted search ads aimed specifically at people seeking Adderall without a legal prescription.
Inside the company, federal prosecutors said, medical judgment was systematically suppressed. Initial appointments were capped at less than half the length of a standard psychiatric evaluation. Follow-up treatment was eliminated. Nurse practitioners were paid up to $60,000 a month to refill prescriptions with no clinical contact. An “auto-refill” system generated monthly emails that reissued prescriptions automatically, in some cases to deceased patients.
He reportedly told employees that successful tech companies “profit off addiction,” and even offered a luxury electric car to staff who broke the law, according to trial testimony. Brody, federal prosecutors said, instructed nurses to continue prescribing stimulants to patients showing signs of medication abuse and to “disregard the risk of going to jail.”
The U.S. Attorney’s Office said He and Brody also submitted fraudulent insurance claims, falsely asserting that Done followed standard ADHD diagnostic criteria, used drug screens, and tried non-stimulant medications first. As a result, Medicare, Medicaid, and private insurers paid out more than $14 million.
The company continued issuing Adderall even after family members warned Done that patients were experiencing bipolar symptoms, Adderall-induced psychosis, or other severe conditions.
After national media outlets reported in 2022 that Done made Adderall “too easy” to obtain, the defendants misled investors, journalists, and pharmacy chains about their policies, federal prosecutors said.
When the federal investigation intensified, He moved operations to China, deleted incriminating documents, used encrypted messaging apps with disappearing messages, and transferred more than $1 million to a Chinese shell company called Make Believe Asia. She was intercepted by law enforcement while attempting to leave the country.
“This case marks the beginning of a sustained effort. Digital health companies that engage in unlawful drug distribution should take notice,” said U.S. Attorney Craig Missakian.
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