On Thursday, June 13, US Department of Justice (DOJ) Office of Public Affairs announced in a press release the prosecutions for the Department of Justice’s first criminal drug distribution. Ruthia He, founder and CEO of a California-based digital health company Fact Global Inc., and its clinical president, David Brody, were arrested Thursday for allegedly participating in a scheme to supply Adderall online and submitting fraudulent reimbursement claims.
According to the news release, court documents noted that He and Brody allegedly conspired to provide easy access to Adderall and other stimulants. Drug seekers were targeted through misleading ads on social media. By limiting information to Done prescribers, medications were prescribed to members, who paid a monthly subscription fee, even if they did not qualify. Refills were done automatically to maximize profits, and follow-up was discouraged by refusing to pay Done prescribers for consultations after the first appointment.
“The indictment alleges that the purpose of the conspiracy was for the defendants to illegally enrich themselves by, among other things, increasing monthly subscription revenues and thereby increasing the value of the company. Done allegedly arranged for the prescription of more than 40 million Adderall pills and other stimulants, and earned more than $100 million in revenue,” according to the press release.
“As alleged in the indictment, defendants provided easy access to Adderall and other stimulants by exploiting telemedicine and spending millions on deceptive social media ads. They generated more than $100 million in revenue by managing the prescription of more than 40 million pills,” Principal Deputy Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said in a statement.
“As alleged, these defendants took advantage of the COVID-19 pandemic to develop and carry out a $100 million scheme to defraud taxpayers and provide easy access to Adderall and other stimulants for no legitimate medical purpose,” Attorney General Merrick B. Garland said in a statement. .
“In 2022, the US Food and Drug Administration (FD) issued a shortage notice for prescription stimulants, including Adderall. “Any diversion of Adderall and other prescription stimulant pills to people who have no medical need only exacerbates these shortages and harms any American with a legitimate medical need for these medications,” said Drug Enforcement Administration Administrator Anne Milgram, in a statement.
The press release details that He and Brody allegedly persisted with the scheme even after information was posted on social media about using Done to gain easy access to stimulants and that Done members overdosed and died. He, Brody and others also conspired to defraud pharmacies and Medicare, Medicaid and commercial insurers to force pharmacies to dispense stimulants. As a result, Medicare, Medicaid and commercial insurers paid more than approximately $14 million.
“If convicted, he and Brody each face a maximum sentence of 20 years in prison for conspiracy to distribute controlled substances and controlled substance distribution charges. “The DEA, HHS-OIG, HSI and IRS Criminal Investigation are investigating the case,” according to the press release.
