A Marin County psychiatrist who is an executive at a health company was arrested Thursday on allegations he helped orchestrate a $100 million medication fraud scheme, federal authorities said.
Dr. David Brody, clinical president of Done Health, was arraigned in U.S. District Court in San Francisco following his arrest in San Rafael. He pleaded not guilty to federal charges such as conspiracy to distribute controlled substances, conspiracy to commit health care fraud and conspiracy to obstruct justice.
U.S. Magistrate Judge Laurel Beeler authorized Brody’s release from custody. Brody, who has an office in San Anselmo, could not be reached for comment on Thursday.
Brody’s codefendant is Ruthia He, the founder and chief executive of Done Health’s parent company, Done Global Inc. She was arrested in Los Angeles on Thursday, the U.S. Attorney’s Office announced.
If convicted, both defendants face upward of 20 years in federal prison.
Brody and He are accused of running a telemedicine operation that gave customers easy online access to the psychiatric medication Adderall and other stimulants for no medical purpose. They allegedly enriched themselves by arranging for the prescriptions of more than 40 million pills and generating more than $100 million in revenue since the COVID-19 pandemic began.
U.S. Attorney General Merrick Garland condemned the alleged misconduct.
“Those seeking to profit from addiction by illegally distributing controlled substances over the internet should know that they cannot hide their crimes and that the justice department will hold them accountable,” he said in a statement released by the prosecution.
Secretary of Homeland Security Alejandro Mayorkas said the defendants “allegedly disregarded the first rule of medical care — do no harm — in order to maximize profits, and there is no place for such fraud in our health care system.”
“The indictment levied against these individuals sends a clear message: the Department of Homeland Security, our Homeland Security Investigations personnel, and our partners across the federal government will hold accountable those providers and prescribers who prey on their patients,” Mayorkas said in a released statement.
The federal indictment focused on the business practices of Done, a self-described “digital health company,” that ran a monthly subscription service for customers. The company offered services such as refills of medication for attention-deficit/hyperactivity disorder as well as online treatment and diagnosis.
He is accused of having an “auto-refill” option that enabled Done subscribers to request an automatic refill of medication every month.
Prosecutors allege that Done paid “prescribers” or medical professionals to diagnose Done customers with ADHD and to write them prescriptions for controlled substances such as Adderall.
“He, Brody, and others paid and caused lucrative payments to be made to Done prescribers to cause them to sign prescriptions that were not for a legitimate medical purpose in the usual course of professional practice,” the indictment says.
The indictment also alleges that prescribers issued prescriptions for customers based on brief communications with them, and that some customers lacked examinations or a preexisting relationship with a practitioner.
“Instead of properly addressing medical needs, the defendants allegedly made millions of dollars by pushing addictive medications,” Anne Milgram, head of the Drug Enforcement Administration, said Thursday. “In many cases, Done Global prescribed ADHD medications when they were not medically necessary.”
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Done is also accused of defrauding pharmacies and health insurance providers by submitting false claims to hide unlawful prescriptions of the medications. Investigators reported that the insurers paid more than $14 million.
The defendants are also charged with conspiracy to obstruct justice when Done underwent federal and media scrutiny for their business practices in 2022. Authorities accused them of attempting to hinder the federal grand jury investigation of their company by deleting company documents and communications.
Brody specializes in mental health and in treating attention-deficit/hyperactivity disorder, according to his Done company biography. The defendant holds a medical degree from the University of California, Irvine, and completed a postdoctoral fellowship at Stanford University.
Brody’s attorney, Naomi Chung, said she looks forward to presenting his case in court.
“Dr. Brody worked to promote access to medical treatment for those with ADHD in the face of both widespread stigma and the unprecedented challenges of a global pandemic,” she said.
Brody’s next court hearing is set for July 24.
He’s attorney, Vicki Chou, could not be reached for comment. A Done company spokesperson did not respond to a request for comment on Thursday.