Ketamine Clinic & Ketamine Therapy Fraud Defense
Former Director of DOJ’s ARPO Strike Force and Lead Counsel in a $120 Million Compounding Pharmacy Fraud Case. Nationwide Defense for Ketamine Clinic Operators, Physicians, Compounding Pharmacies, and Telehealth Platforms Facing DEA, FDA, and DOJ Investigations.
Based in Washington, D.C., Armstrong & Bradylyons PLLC defends ketamine clinic operators, infusion clinic physicians, psychiatrists, nurse practitioners, anesthesiologists, compounding pharmacies, telehealth platforms, and healthcare executives in federal and state investigations and prosecutions involving the prescribing, compounding, distribution, and administration of ketamine for psychiatric, pain management, and off-label therapeutic use.
Ketamine enforcement sits at the intersection of controlled substances diversion, compounding pharmacy fraud, and telemedicine fraud. The firm’s founding partner, Scott Armstrong, brings direct experience in all three. Scott served as Director of the Appalachian Regional Prescription Opioid Strike Force (ARPO) at DOJ’s Fraud Section, where he led the team of prosecutors and data analysts who investigated and prosecuted medical professionals for the illegal prescription and distribution of controlled substances. Scott also served as lead counsel in a $120 million compounding pharmacy fraud case at DOJ involving pharmacy executives, pharmacists, prescribing physicians, and marketers. That combined experience in controlled substances enforcement and compounding pharmacy prosecution is directly applicable to the ketamine enforcement landscape.
The U.S. ketamine clinic market has grown to over 1,500 clinics and an estimated $3.4 billion. No comprehensive regulatory framework governs ketamine’s psychiatric use. In the absence of clear standards, enforcement is being defined through DEA audits, FDA inspections, DOJ prosecutions, and state medical board disciplinary actions. Federal prosecutors in St. Louis charged two physicians in 2024 with conspiracy to unlawfully distribute controlled substances and healthcare fraud in connection with a ketamine clinic. Five individuals, including two physicians, were indicted in 2024 for their roles in a fatal ketamine overdose. The DEA has intensified record-keeping audits of ketamine providers. Telemedicine-based ketamine prescribers face the potential expiration of COVID-era controlled substance prescribing flexibilities. The enforcement is escalating.
The firm’s healthcare fraud defense practice brings over 25 years of combined DOJ experience. Drew Bradylyons supervised the Healthcare Fraud Unit’s Miami Strike Force at DOJ’s Fraud Section and served as Chief of EDVA’s Financial Crimes and Public Corruption Unit. Andrea Savdie served as a Trial Attorney at DOJ’s Fraud Section Miami Strike Force. The firm’s attorneys tried 17 federal jury trials in healthcare fraud cases at DOJ involving over $2.8 billion in alleged false and fraudulent claims.
The firm defends every ketamine investigation from the start as if it will proceed to a criminal prosecution. Ketamine enforcement is crossing from regulatory inquiry into criminal territory. The firm prepares accordingly.
The firm brings direct controlled substances and compounding prosecution experience. Scott Armstrong directed ARPO, DOJ’s dedicated strike force for prosecuting medical professionals who illegally prescribed and distributed controlled substances. Under ARPO, DOJ charged more than 120 defendants collectively responsible for prescribing over 115 million controlled substance pills. Scott also served as lead counsel in a $120 million compounding pharmacy fraud case involving pharmacy executives, pharmacists, prescribing physicians, and marketers. Ketamine cases combine both enforcement vectors: controlled substances distribution under 21 U.S.C. § 841 and compounding violations under the FDCA. The firm brings firsthand prosecution experience in both.
The regulatory landscape is treacherous. Ketamine is a Schedule III controlled substance. It is FDA-approved only as an anesthetic. Psychiatric and pain management use is entirely off-label. There is no FDA-approved ketamine product for depression, anxiety, PTSD, or chronic pain. The DEA regulates prescribing and dispensing. The FDA regulates compounding. State medical boards regulate clinical practice. These overlapping and sometimes conflicting regulatory regimes create pitfalls for ketamine providers at every turn. The firm navigates all three.
Ketamine enforcement is accelerating. The DEA, FDA, DOJ, and state medical boards are all targeting ketamine providers through distinct but overlapping enforcement actions. The enforcement covers both in-clinic infusion models and telehealth prescribing models.
DEA Controlled Substances Enforcement
The DEA commissioned a report on trends in ketamine dispensing and administration in October 2024. DEA enforcement targets record-keeping violations, prescribing without a legitimate medical purpose, absentee medical directorship, and dispensing without adequate physician supervision. DEA record-keeping regulations are complex and often vaguely interpreted. A record-keeping violation does not require proof of intent. The DEA has increased audits of ketamine clinics and compounding pharmacies that supply them. The DEA can issue Immediate Suspension Orders and seek revocation of a provider’s DEA registration.
Criminal Prosecutions
Federal prosecutors are charging ketamine-related conduct under traditional controlled substance theories. In 2024, federal prosecutors in St. Louis charged two physicians with conspiracy to unlawfully distribute controlled substances and healthcare fraud in connection with a ketamine clinic. According to the indictment, ketamine was administered using one physician’s DEA registration while that physician was not physically present, and Medicare was billed for evaluation and management services that were allegedly minimal or nonexistent. In August 2024, five individuals, including two physicians, were indicted in the Central District of California for their roles in the fatal overdose death of actor Matthew Perry. The charges included conspiracy to distribute ketamine and distribution of ketamine resulting in death.
Telehealth Ketamine Prescribing
Telehealth ketamine providers face heightened exposure. Telehealth-based models typically prescribe compounded oral ketamine (lozenges or troches) for self-administration at home. This creates diversion risk. Once ketamine is dispensed for home use, providers lose control over storage, administration, and potential misuse. The DEA telemedicine controlled substance prescribing flexibilities have been extended through December 31, 2026, but the long-term regulatory framework remains unsettled. High-volume remote ketamine prescribing is evaluated against CSA requirements, including patient screening, PDMP checks, follow-up care, and individualized treatment. Telehealth platforms that cap clinical examination time, limit follow-up, or use aggressive consumer marketing face the same enforcement theories applied in the Done Global prosecution.
FDA and Compounding Enforcement
The FDA regulates the compounding of ketamine for off-label use. Compounding pharmacies that prepare ketamine formulations for infusion clinics, oral lozenges, nasal sprays, or sublingual tablets must comply with Section 503A or Section 503B of the FDCA. The FDA targets compounders that make false or misleading marketing claims about compounded ketamine products, that compound ketamine in insanitary conditions, or that distribute compounded ketamine without valid prescriptions. FDA enforcement actions can escalate to criminal referrals to DOJ.
State Medical Board Enforcement
State medical boards are initiating disciplinary proceedings against ketamine prescribers. The Texas Medical Board proposed strict new rules for ketamine therapy clinics in February 2026. State enforcement typically targets prescribers who lack adequate training in ketamine administration, who fail to conduct appropriate patient screening, who prescribe ketamine without monitoring for adverse effects, or who market ketamine treatments with unsubstantiated therapeutic claims. State medical board proceedings run in parallel with federal investigations and create separate licensing exposure.
The firm’s defense practice is built on the direct experience of directing ARPO, prosecuting compounding pharmacy fraud at DOJ, and trying complex healthcare fraud cases in federal courts across the country.
Defending Against CSA Charges for Ketamine Prescribing and Distribution
Ketamine is a Schedule III controlled substance. Distribution outside the usual course of professional practice violates 21 U.S.C. § 841. The firm defends physicians and clinics by establishing that prescribing reflected legitimate medical judgment, that off-label use was supported by clinical evidence, and that the provider acted in good faith. The Supreme Court’s decision in Ruan v. United States requires the government to prove that the prescriber subjectively knew their conduct was unauthorized. Scott Armstrong directed ARPO and tried controlled substances cases as lead trial counsel at DOJ. He knows the government’s playbook.
Defending DEA Audits, ISOs, and Administrative Actions
The DEA pursues administrative actions against ketamine providers, including Immediate Suspension Orders, Orders to Show Cause, and registration revocation proceedings under 21 U.S.C. § 824. DEA record-keeping regulations for ketamine are complex and often vaguely interpreted. The firm defends providers in DEA audits and administrative proceedings, challenges the factual basis for enforcement actions, and coordinates the defense of parallel criminal and administrative proceedings to protect both liberty and livelihood.
Defending Ketamine Compounding Investigations
The firm defends compounding pharmacies that supply ketamine formulations to infusion clinics and telehealth platforms. Scott Armstrong served as lead counsel in a $120 million compounding pharmacy fraud case at DOJ. The firm applies that direct compounding prosecution experience to defend pharmacies in FDA inspections, warning letter responses, and criminal referrals involving compounded ketamine products for infusion, oral, nasal, and sublingual administration.
Defending Against Medicare and Insurance Billing Fraud Charges
The government charges healthcare fraud when ketamine clinics bill Medicare, Medicaid, or private insurance for evaluation and management services that were not provided, for medically unnecessary treatments, or for services rendered without adequate physician supervision. The firm retains psychiatric and pain management experts to establish that treatment was clinically appropriate and that billing reflected services actually rendered.
Federal ketamine enforcement targets every participant in the prescribing, compounding, and administration chain. Armstrong & Bradylyons PLLC defends these individuals in federal and state investigations and prosecutions.
Defense of Ketamine Clinic Operators and Owners
The firm defends owners and operators of ketamine infusion clinics, IV therapy centers, and psychiatric ketamine practices. Clinic owners face criminal exposure when the government alleges they operated facilities that administered ketamine without adequate physician supervision, billed for services not rendered, paid kickbacks for patient referrals, or marketed unsubstantiated therapeutic claims. The firm defends clinic owners by demonstrating legitimate clinical operations, appropriate physician oversight, and compliance with applicable federal and state regulations.
Defense of Prescribing Physicians and Medical Directors
The firm defends physicians, psychiatrists, anesthesiologists, nurse practitioners, and medical directors charged in ketamine cases. Prescribers face exposure when the government alleges they prescribed ketamine outside the usual course of professional practice, served as absentee medical directors, allowed their DEA registration to be used without their physical presence, or prescribed without adequate patient evaluation. The firm defends prescribers by retaining clinical experts to establish that prescribing decisions reflected legitimate off-label medical judgment consistent with evolving clinical evidence.
Defense of Compounding Pharmacies
The firm defends compounding pharmacies (503A and 503B) that prepare ketamine formulations for infusion, oral, nasal, and sublingual administration. Pharmacies face FDA enforcement for compounding violations, insanitary conditions, false marketing claims, and distribution of compounded ketamine without valid prescriptions. The firm defends pharmacies through FDA inspections, warning letter responses, and criminal proceedings.
Defense of Telehealth Ketamine Platforms
The firm defends telehealth companies, digital health platforms, and their executives who facilitate remote ketamine prescribing. Telehealth ketamine providers face exposure for prescribing controlled substances without adequate clinical evaluation, for prescribing compounded ketamine for self-administration without monitoring, and for using aggressive consumer marketing. The firm defends telehealth executives by demonstrating legitimate clinical oversight and compliance with DEA prescribing requirements.
Defense of Staff, Nurses, and Patient Coordinators
The firm defends nurses, nurse anesthetists (CRNAs), patient coordinators, and clinic staff who face conspiracy charges in ketamine cases. The government uses conspiracy to link clinic operators, prescribers, pharmacies, and staff into a single charge. The firm defends these individuals by challenging the government’s evidence of knowledge, willful participation, and the scope of the alleged conspiracy.
Federal ketamine investigations draw on investigative tools from controlled substances enforcement, healthcare fraud prosecution, and FDA regulatory enforcement. Scott Armstrong directed these types of investigations at ARPO. He knows the playbook.
DEA Audits and ARCOS Data Analysis
The DEA uses ARCOS data and state Prescription Drug Monitoring Programs (PDMPs) to identify ketamine prescribers and dispensers with anomalous volume, patient geographic patterns, and pharmacy dispensing partners. The DEA commissioned a report on trends in ketamine dispensing in October 2024. DEA audits target record-keeping compliance, dispensing logs, prescription verification, and controlled substance security.
Undercover Operations and Patient Interviews
The DEA deploys undercover agents to obtain ketamine prescriptions or infusion appointments from targeted clinics. Federal agents interview current and former patients to determine whether clinical evaluations were adequate, whether treatment was medically justified, and whether patients experienced adverse effects. Cooperating patient testimony is a core element of ketamine distribution cases.
FDA Inspections and Warning Letters
The FDA inspects compounding pharmacies that prepare ketamine formulations and issues Form 483 observations and warning letters for compounding violations, insanitary conditions, and false marketing. FDA enforcement can escalate to criminal referral to DOJ.
Medicare and Insurance Claims Analysis
HHS-OIG and CMS analyze claims data to identify ketamine clinics billing for evaluation and management services that are disproportionate to the treatments administered, billing on dates when the rendering provider was unavailable, or billing for medically unnecessary treatments. Outlier billing patterns trigger audits and investigative referrals.
State Medical Board Investigations
State medical boards investigate ketamine prescribers for violations of state prescribing standards, inadequate patient evaluation, failure to monitor adverse effects, lack of training in ketamine administration, and unsubstantiated therapeutic claims. State licensing proceedings run in parallel with federal investigations.
Search Warrants and Electronic Evidence
Federal agents execute search warrants at ketamine clinics, compounding pharmacies, and residences. They seize patient records, dispensing logs, financial records, cell phones, and computers. They obtain cloud warrants under 18 U.S.C. § 2703 for email, text messages, and electronic health records.
Federal ketamine prosecutions combine controlled substances, healthcare fraud, and FDCA charges. The government stacks counts aggressively.
Illegal Distribution of Controlled Substances (21 U.S.C. § 841)
Section 841 is the primary charging statute. Ketamine is a Schedule III controlled substance. The maximum penalty for distribution of a Schedule III substance is 10 years per count. If death or serious bodily injury results, the maximum increases to 15 years.
Conspiracy to Distribute Controlled Substances (21 U.S.C. § 846)
Conspiracy links clinic operators, prescribers, compounders, and staff into a single charge. The penalties mirror the underlying distribution offense.
Healthcare Fraud (18 U.S.C. § 1347)
Healthcare fraud is charged when ketamine clinics bill Medicare, Medicaid, or private insurance for services not rendered, for medically unnecessary treatments, or for services billed at inflated levels. Up to 10 years per count. If serious bodily injury results, up to 20 years.
Wire Fraud (18 U.S.C. § 1343)
Wire fraud carries up to 20 years per count. It captures electronic claims submissions, online marketing, telehealth consultations, and electronic payment processing.
FDCA Violations (21 U.S.C. §§ 331, 333)
Distribution of adulterated or misbranded compounded ketamine products violates the FDCA. Misdemeanor violations carry up to one year. Felony violations with intent to defraud carry up to three years, or up to 10 years for second offenses.
Money Laundering (18 U.S.C. §§ 1956, 1957)
Money laundering carries up to 20 years per count. The government charges money laundering when fraud or distribution proceeds are laundered through financial transactions.
Federal Program Exclusion, DEA Revocation, and Collateral Consequences
Beyond incarceration, a conviction triggers mandatory exclusion from federal healthcare programs under HHS-OIG, DEA registration revocation, and state medical board disciplinary proceedings. For ketamine clinic operators and prescribers, these collateral consequences end a career.
Is Off-Label Ketamine Prescribing Legal?
Off-label prescribing is legal when a physician prescribes an FDA-approved drug for a use not included in the approved labeling. Ketamine is FDA-approved as an anesthetic. Prescribing ketamine for depression, anxiety, PTSD, or chronic pain is off-label. Off-label prescribing is lawful when it is based on legitimate medical judgment, supported by clinical evidence, and within the usual course of professional practice.
The enforcement risk arises when the government alleges that the prescribing was not based on individualized patient evaluation, was not within the usual course of professional practice, or was motivated by financial incentive rather than clinical judgment. The Supreme Court’s decision in Ruan v. United States requires the government to prove that the prescriber subjectively knew their conduct was unauthorized.
What Experience Does Scott Armstrong Bring to Ketamine Defense?
Scott Armstrong brings two areas of direct DOJ experience that are uniquely relevant to ketamine enforcement. First, Scott served as Director of the Appalachian Regional Prescription Opioid Strike Force (ARPO), where he led prosecutors investigating and prosecuting medical professionals for the illegal prescription and distribution of controlled substances. Ketamine is a Schedule III controlled substance prosecuted under the same statutes.
Second, Scott served as lead counsel in a $120 million compounding pharmacy fraud case at DOJ involving pharmacy executives, pharmacists, physicians, and marketers. Ketamine cases frequently involve compounded formulations for infusion, oral, and nasal administration. Scott’s combined experience in controlled substances enforcement and compounding prosecution is directly applicable to every ketamine case.
What Triggers a Federal Ketamine Investigation?
Federal investigations are typically triggered by DEA ARCOS data identifying prescribers with anomalous ketamine volumes, DEA audits of record-keeping compliance, HHS-OIG claims data identifying billing outliers, patient complaints or adverse event reports, FDA inspections of compounding pharmacies, state medical board referrals, and qui tam whistleblower complaints. Adverse patient outcomes, including overdoses, accelerate investigations significantly.
What Are the Penalties for a Federal Ketamine Conviction?
Distribution of ketamine (Schedule III) under 21 U.S.C. § 841 carries up to 10 years per count. If death or serious bodily injury results, the maximum is 15 years. Healthcare fraud carries up to 10 years per count. Wire fraud carries up to 20 years per count. Money laundering carries up to 20 years per count. Beyond incarceration, defendants face federal program exclusion, DEA registration revocation, state license revocation, forfeiture, and restitution.
Are Telehealth Ketamine Providers at Greater Risk Than Infusion Clinics?
Telehealth ketamine providers face distinct and, in many ways, heightened enforcement risk. Telehealth models prescribe compounded oral ketamine for self-administration at home. Once dispensed, the provider loses control over storage, administration, and diversion. The DEA evaluates high-volume remote ketamine prescribing against CSA requirements. The telemedicine controlled substance prescribing flexibilities remain temporary and subject to expiration. Platforms that limit clinical examination time, restrict follow-up, or use aggressive consumer marketing face the enforcement theories applied in the Done Global prosecution.
Can a DEA Audit Lead to Criminal Charges?
Yes. A DEA audit can uncover record-keeping violations, dispensing irregularities, and prescribing patterns that trigger a criminal referral. DEA record-keeping violations do not require proof of intent. If the audit reveals evidence of distribution without a legitimate medical purpose, the matter can be referred to DOJ for criminal prosecution. The firm defends providers in DEA audits and coordinates the defense of parallel administrative and criminal proceedings.
How Does Ruan v. United States Apply to Ketamine Prescribers?
The Supreme Court’s 2022 decision in Ruan v. United States is critical for ketamine prescribers. Ruan held that the government must prove the defendant subjectively knew or intended that their prescribing was unauthorized. A physician who prescribes ketamine off-label in good faith, based on a genuine clinical assessment and evolving clinical evidence, has a defense even if the prescribing was objectively controversial. The firm uses Ruan at every stage of a ketamine defense.
What Is the Legal Status of Compounded Ketamine Products?
Compounding pharmacies may compound ketamine pursuant to valid prescriptions under Section 503A or Section 503B of the FDCA. The API must be pharmaceutical grade. Compounded ketamine is not FDA-approved. Pharmacies that market compounded ketamine with therapeutic claims, that compound in insanitary conditions, or that distribute without valid prescriptions face FDA enforcement and potential DOJ criminal referral.
What Is the Difference Between Ketamine and Spravato?
Spravato (esketamine) is an FDA-approved nasal spray for treatment-resistant depression. It is the S-enantiomer of ketamine and is subject to a Risk Evaluation and Mitigation Strategy (REMS). Spravato must be administered in a certified healthcare setting under direct supervision. Racemic ketamine, the form used by most infusion clinics and compounded for oral use, is FDA-approved only as an anesthetic. Psychiatric use of racemic ketamine is entirely off-label. The distinction matters for billing, prescribing, and regulatory compliance.
Does Armstrong & Bradylyons Handle Ketamine Cases Nationwide?
Yes. Armstrong & Bradylyons PLLC defends individuals and companies in federal and state ketamine investigations and prosecutions in every jurisdiction. With over 1,500 ketamine clinics operating nationwide and enforcement intensifying across all models, the firm represents clients wherever the DEA, FDA, DOJ, and state medical boards bring ketamine enforcement actions.
Scott Armstrong directed ARPO across 10 federal districts and served as lead counsel in a $120 million compounding pharmacy fraud case. Drew Bradylyons supervised healthcare fraud prosecutors at DOJ and oversaw complex fraud cases as Chief of EDVA’s Financial Crimes Unit. The firm is based in Washington, D.C.