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What the DOJ actually did, and why every behavioral health operator should read the press release
On July 7, 2026, the Department of Justice sentenced Ruthia He, founder and former CEO of digital mental health company Done Global, to six years in federal prison and a $1 million fine, and sentenced David Brody, the company’s former clinical president, to two years and a $1 million fine. This is not a billing-error case. This is a case where federal prosecutors said the CEO and clinical president built the fraud into the product.
Per the DOJ, He orchestrated a scheme that used the company’s technology platform, compensation structure, and clinical protocols to unlawfully distribute over 37 million pills of Adderall, defraud insurers of over $12 million, and obstruct the federal investigation that followed. Assistant Attorney General Colin McDonald put operators on notice with a line worth reading twice: “if you build fraud or illegal drug distribution into your growth model, the Department of Justice will find you and bring you to justice.”
The investigating agencies matter here. DEA, HHS-OIG, FBI, and IRS Criminal Investigation all worked the case. When four federal agencies coordinate on a digital health company, the enforcement environment for the rest of the sector has already shifted.
How the business model failed the compliance test
The facts prosecutors laid out map almost one-to-one to the compliance failures I see in operator-side audits, just at a bigger scale. Done paid clinicians up to $60,000 a month to authorize stimulant prescriptions, some signed in as little as 30 seconds, and used an auto-refill feature that let prescriptions continue with little or no follow-up. Brody personally wrote over 394,000 Schedule II prescriptions. Read that number again.
The prior authorization piece is what should keep PE-backed platform CFOs up at night. The DOJ said He, Brody, and others submitted false and fraudulent prior authorization requests to insurers, which claimed that Done followed the DSM-5 in diagnosing ADHD, utilized urine drug screens, and falsely claimed that non-stimulants had previously been tried without success. Every one of those claims is the kind of statement a utilization review team should be verifying against the chart before a single authorization request goes out.
Behavioral health operators running IOP, PHP, or residential SUD care are working under the same underlying framework. Medical necessity has to be documented. ASAM 4th Edition criteria or LOCUS scoring has to actually match what is in the chart. Auto-refill logic, template notes, and prescriber productivity bonuses without independent clinical oversight are the exact patterns that turn a growth story into an OIG exhibit.
The signal for PE-backed platforms and remote prescribing models
This is the first case brought under the DOJ’s newly formed National Fraud Enforcement Division’s Health Care Strike Force. That is a structural signal. Federal prosecutors are staffing up specifically to look at digital health, telehealth prescribing, and platform models. If your investment thesis depends on frictionless intake, high prescriber-to-patient ratios, or subscription-based recurring revenue tied to controlled substances, the risk profile of your platform materially changed in July 2026.
The DOJ was explicit that the goal of the conspiracy was to obtain an over $1 billion valuation by fueling user growth through a subscription for prescription business model whereby patients paid a monthly fee for prescriptions that were automatically refilled and obtained through a frictionless technology platform. The valuation target itself became evidence. That is a new posture from federal enforcement, and buyers and boards should adjust diligence accordingly.
What we are telling clients right now: if you are a behavioral health platform preparing for a transaction, or a PE sponsor holding a telehealth-forward asset, a real prescriber oversight review needs to sit alongside the QoE. Sample charts. Look at prescriber output per hour. Look at whether the LOCUS or ASAM scoring in the record actually supports what was billed. Look at how prior auths are drafted and by whom. Rep and warranty carriers are going to start asking these questions if they are not already.
What operators should actually do this quarter
A few concrete moves. First, run an independent chart audit against the levels of care and prescribing patterns you actually bill. Not a sample your clinical director picks. A blind pull. We recently supported five facilities across three states through Joint Commission accreditation surveys in May 2026, and the ones that walked in relaxed were the ones who had already stress-tested their documentation against payer standards and Joint Commission standards months before the surveyor showed up.
Second, look at your prescriber compensation structure. If any part of clinician pay is tied to volume of prescriptions written, script counts per hour, or subscription retention, get that in front of counsel now. The Done case makes it clear that DOJ views compensation architecture as evidence of intent.
Third, tighten utilization review. UR is not a billing function. UR is the checkpoint that confirms medical necessity is documented, that the level of care matches ASAM 4th Edition placement criteria, and that authorizations reflect what is actually being delivered. If your UR team reports up through revenue cycle instead of clinical or compliance, that reporting line is a finding waiting to happen.
Fourth, build a corrective action plan muscle now. Auditors, whether HHS-OIG, a state Medicaid integrity unit, or a commercial payer SIU, are far more forgiving of an operator who identified a documentation gap and fixed it than one who was told about it. If you want to talk through any of this in person, Sariah and I will be at Booth 402 at the Cape Cod Symposium in Providence, Rhode Island August 6 through 9. Come find us.
Frequently asked questions
Does the Done Global case apply to us if we do not prescribe stimulants?
Yes. The prosecution theory centered on medical necessity, prior authorization accuracy, and compensation structures that incentivized volume over clinical judgment. Those apply to any behavioral health operator billing PHP, IOP, residential, or MAT services. The drug involved was Adderall. The compliance framework is the same one every operator works under.
What is the single fastest thing an operator can do to reduce exposure?
Pull a random sample of 20 to 30 charts across your highest-volume prescribers or highest-billed level of care, and audit them against payer medical necessity criteria and ASAM 4th Edition placement. If the documentation does not support the billed service, you have a defined problem you can build a corrective action plan around. That is materially better than being surprised by an SIU letter.
How does this affect a PE transaction in behavioral health?
Expect deeper diligence on prescriber oversight, utilization review reporting lines, prior authorization workflows, and clinician compensation structures. R&W underwriters and buy-side counsel will be sharper on telehealth prescribing patterns after the DOJ’s July 2026 posture. Sellers who can produce a clean compliance program, current chart audits, and functioning UR reports will close faster and at better terms than those who cannot.
Where does compliance-managed services fit?
For operators without a full compliance department, outsourcing chart audits, UR oversight, and corrective action plan management is often more defensible than a thin internal function. What matters to a regulator is whether the work is actually being done, documented, and acted on, not the org chart.
References
- U.S. Department of Justice: Founder/CEO and Clinical President of Digital Health Company Sentenced to 72 Months and 24 Months, Respectively, for $90 Million Scheme (July 7, 2026)
- HHS Office of Inspector General: Enforcement Announcement on Done Global Sentencing
- Drug Enforcement Administration: Press Release on Done Global $90 Million Adderall Distribution Scheme
- Medical Economics: Digital Health Founder Sentenced in $90M Adderall Scheme
- The Joint Commission: Standards for Behavioral Health Care and Human Services
- SAMHSA: Alcohol, Tobacco, and Other Drugs Resources