Digital Health Platform & AI Healthcare Fraud Defense
Former DOJ Fraud Section Prosecutors. Nationwide Defense for Digital Health Platform Founders, Telehealth Company Executives, AI Healthcare Technology Companies, Management Services Organizations, Remote Patient Monitoring Companies, EHR Vendors, Coding Automation Companies, and Investors Facing Federal Investigations and Prosecutions Involving Algorithm-Driven Prescribing, AI Clinical Documentation Fraud, Digital Kickbacks, and Healthcare Fraud.
Based in Washington, D.C., Armstrong & Bradylyons PLLC defends digital health platform founders, telehealth company executives, AI healthcare technology companies, management services organizations (MSOs), remote patient monitoring companies, EHR vendors, coding automation companies, clinical decision support developers, and investors in federal investigations and prosecutions involving algorithm-driven prescribing, AI clinical documentation fraud, digital kickback theories, and healthcare fraud.
Digital health is the fastest-emerging enforcement frontier in healthcare fraud. In November 2025, a federal jury in the Northern District of California convicted the founder and clinical president of Done Global in what DOJ described as its first criminal drug distribution prosecution arising from a digital health platform’s telemedicine prescribing model. The defendants were convicted of conspiracy to distribute controlled substances, distribution of controlled substances, and conspiracy to commit healthcare fraud in a $100 million scheme involving over 40 million Adderall pills prescribed through a subscription-based platform. In December 2025, DOJ obtained a superseding indictment of the company itself. DOJ’s Criminal Division declared it the beginning of sustained enforcement against digital health companies that engage in unlawful drug distribution.
The enforcement is expanding beyond prescribing platforms. The DOJ-HHS Healthcare Fraud Working Group flagged AI-driven EHR manipulation as a top enforcement priority. DOJ entered its first non-prosecution agreement involving AI in a Medicare Advantage case where a proprietary platform drove enrollments through pharmacists in exchange for kickbacks. The September 2025 creation of DOJ’s Enforcement & Affirmative Litigation Branch broadened liability theories to include AI-driven inaccuracies under a “reckless disregard” standard. The government is building a new category of fraud theory: the algorithm as the instrument of the crime.
The firm’s healthcare fraud defense practice is built on nearly a decade of combined experience at DOJ’s Fraud Section. Scott Armstrong, Drew Bradylyons, and Andrea Savdie tried 17 federal jury trials in healthcare fraud cases at DOJ involving over $2.8 billion in alleged false and fraudulent claims. They understand the intersection of healthcare fraud, controlled substances enforcement, telemedicine enforcement, and technology platform liability that defines this emerging enforcement space.
Armstrong & Bradylyons PLLC defends every digital health enforcement matter from the start as if it will proceed to federal criminal prosecution. Done Global went to trial. The sentences are severe. The firm prepares accordingly.
Digital health enforcement converges multiple areas the firm already defends. Algorithm-driven prescribing platforms trigger Controlled Substances Act distribution charges. Subscription-based billing models trigger healthcare fraud charges when claims are submitted to Medicare, Medicaid, or commercial insurers. AI-driven coding and documentation tools that inflate billing trigger False Claims Act liability. Software that steers clinical decisions toward higher-margin products triggers Anti-Kickback Statute theories. Deceptive digital marketing triggers wire fraud and FTC enforcement. Scott Armstrong served for nearly a decade at DOJ’s Fraud Section, trying 16 federal jury trials. Drew Bradylyons supervised the Healthcare Fraud Unit’s Miami Strike Force and served as Chief of EDVA’s Financial Crimes Unit.
Digital health enforcement is expanding across every enforcement channel. DOJ, the FDA, HHS-OIG, the FTC, the DEA, and state attorneys general are all targeting digital health companies through distinct but overlapping enforcement theories.
The Done Global Prosecution: DOJ’s Template Case
The Done Global conviction established the template for digital health platform prosecution. Done Global operated a subscription-based telehealth platform for ADHD diagnosis and treatment. The government alleged the platform’s business model improperly influenced clinical decision-making. Prescribers were compensated based on prescription volume rather than quality of care. The platform used $40 million in deceptive social media advertising targeting drug seekers. Auto-refill technology dispensed stimulants without adequate clinical reassessment. Pharmacies that refused to fill prescriptions were circumvented. The founder attempted to relocate the company to China, destroyed evidence, transferred $1 million to a shell company in China, and researched countries without extradition treaties. The jury convicted the founder and clinical president. DOJ then indicted the company itself. The Northern District of California is the venue. Sentencing is pending.
AI-Driven EHR Manipulation
DOJ’s Healthcare Fraud Working Group flagged AI-driven electronic health records manipulation as a top enforcement priority. The government targets generative and predictive tools embedded in EHR systems where automated prompts, defaults, or nudges drive claims submissions for medically unnecessary services or services never provided. EHR systems that influence prescribing behavior are under investigation. The government is building the theory that AI-enabled processes that cause the submission of false claims create False Claims Act liability under a “reckless disregard” standard when human-in-the-loop safeguards are absent.
The “Digital Kickback” Theory
DOJ is developing a new enforcement theory: the digital kickback. Regulators are treating software that prioritizes higher-margin products not as a neutral tool, but as a kickback mechanism hardwired into the platform. DOJ entered its first non-prosecution agreement involving AI with a Medicare Advantage organization that used a proprietary platform to drive enrollments through pharmacists in exchange for kickbacks. The government is expected to extend this theory to clinical decision support tools, formulary management algorithms, and referral routing software that steer patients toward higher-revenue services.
Remote Patient Monitoring and AI Documentation
HHS-OIG identified sharp growth in Medicare payments for remote patient monitoring (RPM) that raises serious program integrity concerns, particularly where providers lack adequate patient interaction. AI-generated clinical documentation and automated encounter summaries create enforcement exposure when the documentation does not align with the clinical interaction that actually occurred. Telehealth and virtual care platforms that use AI-generated documentation face scrutiny for creating clinical records that overstate the nature or extent of services rendered.
Cybersecurity as a Healthcare Fraud Theory
DOJ’s Civil Cyber-Fraud Initiative treats cybersecurity misrepresentations as False Claims Act violations. In 2025, Health Net Federal Services (a Centene subsidiary) paid $11.2 million for allegedly false cybersecurity certifications. Digital health platforms that make false representations about data security to obtain government contracts or participate in federal healthcare programs face FCA liability. This enforcement theory is particularly relevant for platforms handling protected health information at scale.
FTC and State Attorney General Enforcement
The FTC targets digital health platforms that make deceptive marketing claims about clinical efficacy, that harvest consumer health data without adequate disclosure, or that engage in unfair subscription practices. State attorneys general use consumer protection statutes to pursue digital health companies for deceptive advertising, unauthorized practice of medicine, and data privacy violations. State and federal enforcement runs in parallel.
Defending Against Charges That the Platform Itself Is the Instrument of Fraud
The government charges platform founders and executives when it alleges the business model, algorithm, or technology design drove fraudulent prescribing, billing, or clinical decisions. The firm defends platform operators by analyzing the technology architecture, demonstrating that clinical decision-making was independent, challenging the government’s evidence of intent, and distinguishing legitimate business innovation from fraud.
Defending Against AI Clinical Documentation and Coding Fraud Theories
The government targets companies whose AI tools generate clinical documentation, coding suggestions, or billing entries that do not accurately reflect the services rendered. The firm defends companies by analyzing AI model design, documenting human-in-the-loop safeguards, demonstrating validation and audit procedures, and challenging the government’s theories of corporate knowledge and reckless disregard.
Defending Management Services Organizations and Investors
DOJ names MSOs, parent companies, private equity sponsors, and venture capital investors as defendants when they direct the adoption of AI tools, design compensation structures that influence clinical decisions, or exercise operational control over platform practices. The firm defends MSOs and investors by analyzing governance structures, demonstrating separation between business operations and clinical judgment, and challenging theories of vicarious liability.
Defending Platforms That Prescribe Controlled Substances Online
Following the Done Global conviction, platforms that prescribe controlled substances face heightened scrutiny. The firm defends platforms and their clinical staff by demonstrating compliance with the Controlled Substances Act, analyzing prescribing protocols, establishing that prescriptions were issued for legitimate medical purposes, and invoking the subjective knowledge standard under Ruan v. United States.
Defense of Platform Founders and Executives
The firm defends founders, CEOs, CTOs, chief medical officers, and C-suite executives of digital health companies. Founders face the most severe criminal exposure. Done Global’s founder was convicted and faces up to 20 years on the conspiracy to distribute controlled substances count alone. The government charges founders who designed the platform business model, directed marketing strategies, set clinician compensation structures, or made operational decisions that the government alleges drove unlawful prescribing or billing.
Defense of Clinical Leaders and Medical Directors
The firm defends chief medical officers, clinical presidents, medical directors, and supervising physicians employed by or contracted with digital health platforms. Done Global’s clinical president was convicted alongside the founder. Clinical leaders face exposure when the government alleges they approved clinical protocols that prioritized volume over medical necessity, failed to supervise prescribing, or allowed the platform’s technology to override independent clinical judgment.
Defense of AI and Technology Companies
The firm defends AI companies, EHR vendors, coding automation companies, clinical decision support developers, and remote patient monitoring technology providers. Technology companies face exposure when the government alleges their products generated false clinical documentation, inflated coding, upcoded claims, or steered clinical decisions toward higher-margin services. The “reckless disregard” theory creates FCA exposure for technology companies whose AI tools produce inaccurate outputs without adequate validation or human oversight.
Defense of MSOs and Management Companies
The firm defends management services organizations that provide administrative, technology, and operational support to digital health platforms and physician practices. MSOs face criminal and civil exposure when the government alleges they exercised control over clinical decision-making, designed compensation structures that incentivized volume, or directed the adoption of AI tools that generated false claims. The Done Global prosecution used California corporate practice of medicine concepts as part of its evidentiary framework.
Defense of Investors and Private Equity
The firm defends venture capital firms, private equity sponsors, and individual investors in digital health companies. Investors face exposure under theories of conspiracy, aiding and abetting, and False Claims Act liability when the government alleges they directed operational decisions that drove fraudulent billing or prescribing. Whistleblowers are particularly active in alleging that investor-driven growth incentives corrupted clinical decision-making at portfolio companies.
Scott Armstrong and Drew Bradylyons built healthcare fraud cases at DOJ’s Fraud Section. They understand how the government translates platform data into criminal prosecutions.
Claims Data Analytics and the Health Care Fraud Data Fusion Center
DOJ’s Health Care Fraud Data Fusion Center combines expertise from DOJ’s Health Care Fraud Unit Data Analytics Team, the FBI, HHS-OIG, and other agencies. The Fusion Center uses cloud computing, artificial intelligence, and advanced analytics to identify emerging fraud schemes. For digital health platforms, the government analyzes prescribing patterns, claims volume, utilization spikes, coding intensity, and billing anomalies associated with platform-affiliated providers. Outlier patterns trigger investigation.
Pharmacy Refusal and DEA Referrals
Pharmacies that identify suspicious prescribing patterns refuse to fill prescriptions and report concerns to the DEA and state pharmacy boards. In the Done Global case, pharmacies refused to fill prescriptions, and the platform attempted to circumvent those pharmacies. Pharmacy refusals generate investigative leads. The DEA tracks prescribing patterns through the Automation of Reports and Consolidated Orders System (ARCOS) and state Prescription Drug Monitoring Programs (PDMPs).
Whistleblower and Qui Tam Complaints
Current and former employees at digital health platforms, MSOs, and technology companies file qui tam complaints under the False Claims Act. The May 2025 expansion of DOJ’s Corporate Whistleblower Awards Pilot Program to include federal healthcare fraud increases whistleblower incentives. Clinicians, engineers, product managers, and compliance officers are all potential whistleblowers. Qui tam complaints targeting digital health platforms are a growing source of investigations.
Source Code and Algorithm Analysis
Federal investigators issue grand jury subpoenas and search warrants for source code, algorithm design documents, product specifications, AI model training data, and internal communications about platform design decisions. The government retains technical experts to analyze whether algorithms steered clinical decisions, inflated coding, or generated documentation that did not reflect actual clinical encounters. Internal product design communications become key evidence.
Digital Marketing and Social Media Evidence
The government analyzes digital advertising campaigns, social media marketing, consumer acquisition costs, and conversion metrics. In the Done Global case, prosecutors proved the company spent $40 million on deceptive social media advertising targeting drug seekers. Facebook, Instagram, TikTok, and Google advertising records are routinely subpoenaed. The government uses advertising content and targeting data to prove intent.
State Attorney General and FTC Coordination
State attorneys general use consumer protection statutes to investigate digital health platforms for deceptive advertising, unauthorized practice of medicine, and data privacy violations. The FTC brings enforcement actions for deceptive health claims and unfair data practices. Federal and state investigations run in parallel and share evidence.
Conspiracy to Distribute Controlled Substances (21 U.S.C. § 846)
Conspiracy to distribute is the lead charge when a platform facilitates prescribing outside the usual course of professional practice. Up to 20 years per count. Done Global’s founder and clinical president were convicted on this charge.
Healthcare Fraud (18 U.S.C. § 1347)
Healthcare fraud is charged when platforms submit false claims to Medicare, Medicaid, or commercial insurers. Up to 10 years per count. Done Global’s defendants were convicted of conspiracy to commit healthcare fraud.
Wire Fraud (18 U.S.C. § 1343)
Wire fraud captures every electronic communication in furtherance of the fraud scheme. Up to 20 years per count. Digital health platforms generate massive electronic footprints. Every subscription charge, claim submission, advertising placement, and internal communication supports a separate wire fraud count.
False Claims Act (31 U.S.C. §§ 3729–3733)
The False Claims Act imposes treble damages and per-claim penalties. FY 2025 FCA recoveries exceeded $6.8 billion, the highest on record, with over $5.7 billion tied to healthcare. DOJ is framing AI-related inaccuracies as “reckless disregard” under the FCA scienter standard. Technology companies, MSOs, and investors face FCA exposure when their tools or directives cause the submission of false claims.
Anti-Kickback Statute (42 U.S.C. § 1320a-7b)
The Anti-Kickback Statute carries up to 10 years per count. The “digital kickback” theory targets algorithms and software that steer referrals, prescribing, or enrollment in exchange for value. DOJ’s first AI-related NPA involved a platform that drove Medicare Advantage enrollments through kickbacks.
Collateral Consequences
Beyond incarceration, a conviction triggers mandatory exclusion from federal healthcare programs, forfeiture of fraud proceeds (Done Global faces twice the gross profits), platform debarment, state medical license revocation for clinical leaders, SEC enforcement for publicly traded companies, investor lawsuits, and permanent reputational damage. For corporate defendants, the penalty can include twice the gain or twice the gross loss.
What Is Digital Health Platform Fraud and Why Is DOJ Targeting It?
Digital health platform fraud encompasses algorithm-driven prescribing schemes, AI-generated clinical documentation that does not reflect actual services, subscription-based models that prioritize revenue over medical necessity, digital kickback arrangements where software steers clinical decisions, and deceptive digital marketing of health services. DOJ is targeting this space because digital health companies submit billions in claims to federal healthcare programs. The Done Global conviction in November 2025 established the enforcement template. DOJ declared it the beginning of sustained enforcement against digital health companies.
What Is the “Digital Kickback” Theory?
The digital kickback theory treats software that prioritizes higher-margin products or steers clinical decisions as a kickback mechanism hardwired into the platform. The government argues that the algorithm itself constitutes remuneration because it directs referrals, prescribing, or enrollment in exchange for value. DOJ entered its first AI-related non-prosecution agreement with a Medicare Advantage organization that used a proprietary platform to drive enrollments through pharmacists in exchange for kickbacks. This theory is expected to expand to clinical decision support tools, formulary management algorithms, and referral routing software.
Can a Platform Founder Face Criminal Charges for How the Algorithm Works?
Yes. The government charges platform founders when it alleges the technology design drove fraudulent prescribing, billing, or clinical decisions. In the Done Global case, the founder was convicted for designing a business model that the government alleged overrode clinical judgment. Prosecutors proved that the platform’s compensation structure, auto-refill technology, and marketing strategy collectively facilitated unlawful prescribing. Product design decisions, internal communications, and algorithm specifications become key evidence.
How Does DOJ Treat AI-Generated Clinical Documentation?
DOJ and HHS-OIG target AI-generated clinical documentation that does not accurately reflect the services rendered. The government is expected to frame AI-related inaccuracies as “reckless disregard” under the False Claims Act scienter standard when companies deploy AI tools without adequate human-in-the-loop safeguards, model validation, hallucination controls, and bias audits. Companies that use AI for clinical documentation, coding, or risk adjustment face heightened scrutiny.
What Sentences Do Digital Health Fraud Defendants Face?
Conspiracy to distribute controlled substances carries up to 20 years. Healthcare fraud carries up to 10 years per count. Wire fraud carries up to 20 years per count. For corporate defendants, penalties include twice the gross profits or twice the gross loss. Done Global generated over $100 million in revenue. Individual defendants face imprisonment, forfeiture, restitution, and mandatory exclusion from federal healthcare programs.
Can an MSO or Investor Be Charged for Platform Fraud?
Yes. DOJ names MSOs, parent companies, private equity sponsors, and venture capital investors as defendants when they direct the adoption of AI tools, design compensation structures that influence clinical decisions, or exercise operational control that drives fraudulent billing or prescribing. The Done Global prosecution used corporate practice of medicine concepts as part of its evidentiary framework. Whistleblowers are particularly active in alleging that investor-driven growth incentives corrupt clinical decision-making at digital health portfolio companies.
What Is the Difference Between This Page and the Telemedicine Fraud Defense Page?
The firm’s telemedicine fraud defense page focuses on providers who bill for telehealth services. This page focuses on the platform operators, technology companies, and algorithm designers who build the systems through which care is delivered and billed. The enforcement theories are different. The government charges platform founders for designing business models that override clinical judgment. It charges technology companies for AI tools that generate false documentation. It charges MSOs and investors for directing operational decisions. The defendant population is founders, engineers, product managers, and investors rather than physicians and nurses.
Does Cybersecurity Create Healthcare Fraud Exposure for Digital Health Platforms?
Yes. DOJ’s Civil Cyber-Fraud Initiative treats false cybersecurity certifications as False Claims Act violations. In 2025, Health Net Federal Services paid $11.2 million for allegedly false cybersecurity certifications. Digital health platforms that make representations about data security to participate in federal healthcare programs or obtain government contracts face FCA liability if those representations are false. This is a rapidly expanding enforcement theory.
What Defenses Are Available in a Digital Health Platform Fraud Case?
The firm defends digital health companies by demonstrating that clinical decision-making was independent of platform economics, that AI tools included adequate human-in-the-loop safeguards and validation, that prescribing followed clinical protocols and met medical necessity standards, that compensation structures complied with applicable safe harbors, and that marketing was accurate and non-deceptive. The Ruan v. United States subjective knowledge standard applies to prescribing-related charges.
Does Armstrong & Bradylyons Handle Digital Health Cases Nationwide?
Yes. Armstrong & Bradylyons PLLC defends individuals and companies in federal digital health platform investigations and prosecutions in every jurisdiction. The Done Global prosecution is in the Northern District of California. Active enforcement also occurs in the Southern District of Florida, the Southern District of New York, the District of New Jersey, and other districts with concentrated digital health activity. Scott Armstrong and Drew Bradylyons have tried healthcare fraud cases in federal courts throughout the country during their combined 25-year DOJ career. The firm is based in Washington, D.C.