Federal prosecutors have charged the CEO and a primary care physician of Done Global, a telemedicine company that distributed stimulants to thousands of patients across the United States, with running a $100 million fraud scheme to provide “easy access” to Adderall and other stimulants.
The Department of Justice announced that Dawn Global founder Lucia He was arrested in Los Angeles on Thursday on suspicion of engaging in the distribution of Adderall over the Internet, submitting false and fraudulent reimbursement claims and obstructing justice. news releaseThe company’s clinical president, David Brody, was also arrested in San Rafael, California, on the same charges.
“They generated more than $100 million in revenue by arranging for the prescription of more than 40 million pills,” Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said in a statement, adding that this was the Justice Department’s “first criminal drug distribution prosecution involving telehealth prescriptions through a digital health company.”
Attorney General Merrick Garland said in a statement that prescription drugs often have “no legitimate medical purpose.”
According to court documents, He and Brody prescribed Adderall and other highly addictive drugs to patients who signed up for monthly subscriptions through the company’s platform. They are accused of targeting drug seekers with “deceptive advertising.” They are also accused of building the company’s platform “to facilitate access to Adderall and other stimulants.” This included limiting the information available to Dawn prescribers, instructing Dawn prescribers to prescribe Adderall and other stimulants even when Dawn members did not qualify, and requiring initial consultations to be completed within 30 minutes.
“The indictment alleges that the purpose of the conspiracy was, among other things, to illegally enrich the defendants by increasing the value of their company through increased monthly subscription revenues,” the Justice Department said.
Dan Global is accused of prescribing ADHD medication to numerous patients when they did not medically need it, according to the statement. Once patients purchased a monthly subscription, the platform set up an “auto-replenishment” feature that allowed subscribers to choose to automatically generate monthly refill messages, according to court documents.
According to court documents, Dawn “attempted to use its fee structure to discourage follow-up care” by “refusing to pay Dawn prescribers for the time they spent caring for patients after the initial consultation, medical visits, or telemedicine consultations, and instead paying them only based on the number of patients who received prescriptions.”
The company persisted with its tactics even after He and Brody learned how easy it was to get stimulants and that “members were overdosing and dying,” according to court documents. The executives also conspired to defraud pharmacies, Medicare, Medicaid and other insurance companies, according to court documents.
The Centers for Disease Control and Prevention issued a warning to public health officials, clinicians, patients, their families and caregivers Thursday afternoon about the potential disruption that could result from the charges. “Disruptions involving this major telehealth company could affect 30,000 to 50,000 patients ages 18 and older across all 50 states,” the warning said.
Done launched two years ago. According to the company’s website:As a “passion project to help friends, colleagues and loved ones who struggle to access mental health care.”
According to its website, members pay a monthly fee of $79 to access the platform’s board-certified psychiatric medical professionals and other resources to help people with ADHD. Membership to the company costs $199.
“Dawn Global strongly opposes the criminal charges filed last week against our founders Lucia He and Dr. David Brody, which are based primarily on incidents that occurred between February 2020 and January 2023. Since our founding, Dawn Global has worked to ensure that tens of thousands of Americans have access to mental health care during this worsening national crisis,” Dawn Global said in a statement to CBS News on Tuesday, adding that the company will continue to operate and “are committed to ensuring that the tens of thousands of Americans who rely on us are not denied access to mental health care.”
The Department of Justice urged Dawn patients and medical professionals who engaged in the alleged illegal conduct to report the conduct to the DEA hotline.
He and Brody each face up to 20 years in prison.
