Marin psychiatrist arrested in federal drug fraud investigation

A Marin County psychiatrist who works as an executive at a health care company was arrested Thursday on suspicion of helping to organize a $100 million drug 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 including conspiracy to distribute controlled substances, conspiracy to commit health care fraud and conspiracy to obstruct justice.

U.S. Magistrate Judge Laurel Beeler approved Brody’s release from custody. Brody, who has an office in San Anselmo, could not be reached for comment Thursday.

Brody’s co-defendant is Ruthia He, founder and CEO of Done Health’s parent company Done Global Inc. She was arrested in Los Angeles on Thursday, the U.S. Attorney’s Office said.

If convicted, both defendants face up to 20 years in a federal prison.

Brody and He are accused of operating a telemedicine business that provided customers with easy online access to the psychotropic drug Adderall and other stimulants with no medical purpose. They are accused of enriching themselves by arranging the prescription of more than 40 million pills and generating more than $100 million in sales since the start of the COVID-19 pandemic.

US Attorney General Merrick Garland condemned the alleged misconduct.

“Those who seek to profit from addiction by illegally distributing controlled substances over the Internet should know that they cannot hide their crimes and that the Department of Justice will hold them accountable,” he said in a statement from the prosecutor’s office.

Homeland Security Secretary Alejandro Mayorkas said the defendants “allegedly violated the first rule of health care – do no harm – to maximize their profits. There is no place for such fraud in our health care system.”

“The indictment of these individuals sends a clear message: The Department of Homeland Security, our Homeland Security Investigations staff, and our partners across the federal government will hold accountable those doctors and prescribers who exploit their patients,” Mayorkas said in a released statement.

The federal charges focused on the business practices of Done, a self-described “digital health company” that offered its customers a monthly subscription service. The company offered services such as attention deficit/hyperactivity disorder medication refills and online treatment and diagnosis.

He is accused of having an “Automatic Refill Option” that allowed Done subscribers to request an automatic refill of medications each month.

Prosecutors allege Done paid “prescribers,” or medical professionals, to diagnose his clients with ADHD and write them prescriptions for controlled substances such as Adderall.

“He, Brody and others paid and arranged for lucrative payments to Done prescribers to induce them to sign prescriptions that served no legitimate medical purpose in the normal course of professional practice,” the indictment states.

The indictment also alleges that doctors wrote prescriptions to their clients based on brief conversations with them and that some clients were not examined or had no relationship with a doctor at all.

“Instead of adequately addressing medical needs, the defendants allegedly made millions of dollars by selling addictive drugs,” Anne Milgram, head of the Drug Enforcement Administration, said Thursday. “In many cases, Done Global prescribed ADHD medications when they were not medically necessary.”

Done is also accused of defrauding pharmacies and health insurance companies by making false statements to cover up illegal prescriptions of the drugs. Investigators reported that insurers paid more than $14 million.

The defendants also face charges of conspiracy to obstruct justice when Done came under scrutiny for its business practices in 2022. Authorities accused them of attempting to obstruct a federal grand jury investigation into their company by deleting company documents and communications.

Brody specializes in mental health and the treatment of attention deficit/hyperactivity disorder, according to his bio at Done Company. The defendant holds a medical degree from the University of California, Irvine, and completed postdoctoral work at Stanford University.

Brody’s attorney, Naomi Chung, said she looks forward to representing his case in court.

“Dr. Brody has been committed to promoting access to medical treatment for people with ADHD, despite widespread stigma and the unprecedented challenges of a global pandemic,” she said.

Brody’s next court hearing is scheduled for July 24.

His lawyer, Vicki Chou, could not be reached for comment. A spokesman for Done did not respond to a request for comment Thursday.