The U.S. Department of Justice has filed a motion to freeze the assets of Zealthy, a telehealth startup, and sought the appointment of a receiver to oversee the company's operations. The filing also names Kyle Robertson, Zealthy's chief executive, as a subject of the action. Prosecutors describe the company's conduct as a "runaway campaign of lawbreaking" and have raised doubts about whether Zealthy holds sufficient funds to cover potential penalties and consumer redress.
Prescriptions issued without physician knowledge
At the centre of the allegations is the claim that Zealthy fulfilled thousands of medication orders, including GLP-1 weight loss drugs and antidepressants, using the names and medical licences of physicians who had no awareness of, or involvement in, the prescriptions. The DOJ contends this practice constitutes systematic identity theft of licensed medical professionals.
Dr. Steven McDonald, a former medical director at the company, has provided testimony that he discovered large volumes of insurance correspondence relating to patients he had never seen or treated. His account forms a significant part of the evidentiary basis for the fraud allegations.
Customers billed and blocked from cancelling
The DOJ's filing extends beyond medical fraud. Customer support staff are alleged to have been instructed not to initiate subscription cancellations and to avoid using the word "cancel" unless a customer explicitly raised it themselves. Customers reported being charged without their consent, generating a significant number of credit card chargebacks.
Prosecutors also allege that company executives used corporate credit cards to purchase their own Zealthy subscriptions. The apparent purpose was to suppress the ratio of disputed transactions and present payment processors and financial institutions with a misleadingly low chargeback rate.
Shell companies and lost certification
Zealthy lost its medical merchant certification in early 2025 after it failed to disclose active litigation to the relevant certification body. Following that loss, and after several advertising platforms and payment processors ended their relationships with the company, Zealthy is alleged to have established shell entities to route payments and maintain access to platforms from which it had been barred.
Robertson's background at Cerebral
Robertson previously led Cerebral, a mental health telehealth company that faced its own regulatory difficulties. Cerebral drew scrutiny over alleged privacy violations and practices that made subscription cancellation difficult for users: issues that bear a resemblance to those now alleged at Zealthy.
The current DOJ action originated in a 2024 lawsuit against Robertson. As further conduct came to light, prosecutors expanded the scope of that litigation to include Zealthy directly, citing what they described as increasingly brazen and dangerous behaviour.
Financial survival in question
The scale of the penalties being pursued may itself determine whether the company continues to exist. The DOJ has acknowledged in its filing that the combined financial liability, covering fines, penalties, and consumer redress, could render Zealthy insolvent. It is this concern, in part, that underpins the request for an immediate asset freeze: prosecutors argue that without intervention, the funds required to compensate affected consumers may not be recoverable.
Neither Zealthy nor Robertson had responded publicly to the specific allegations set out in the latest filing at the time of publication.
