DOJ seeks to freeze assets of telehealth company, alleging 'runaway campaign of lawbreaking'
The U.S. Department of Justice (DOJ) is asking a federal judge to immediately freeze the assets of Zealthy, a private telehealth company authorities have accused of engaging in a "runaway campaign of lawbreaking.”
The request was made after the agency said it discovered rampant fraud and misconduct related to prescribing practices by clinicians working with the telehealth provider, which is currently—along with other related telehealth companies—being sued by the DOJ over these very allegations.
Zealthy—which prescribes weight-loss drugs, medications for erectile dysfunction, birth control, skin care and more—was allegedly engaging in multiple types of fraudulent activity.
The DOJ says the company used the names and license numbers of doctors to fill prescriptions that those physicians never ordered. These incidents of identity theft allegedly happened thousands of times as part of normal business operations.
Prosecutors also claim Zealthy would charge customers for telemedicine services without their knowledge or consent, further instructing its service representatives not to cancel the accounts of angry members.
This resulted in a number of credit card transactions being formally disputed, as customers couldn’t cancel subscriptions and get refunds from the company.
Proceedings could trigger bankruptcy
Financially, it's been a hard couple of years for telehealth group.
The DOJ first filed its civil complaint in 2024. In 2025, Zealthy would go on to lose its medical merchant certification for failing to disclose that it was the target of a federal lawsuit. Shortly after that, many banks and payment processors dropped the company as a client, which forced Zealthy to form new corporations in order to stay in business, the agency alleges.
In attempting to freeze the assets, the DOJ is arguing that the company is facing an existential crisis. The DOJ wrote in its updated filing that it suspects Zealthy's “available liquidity will fall short of its exposure in this litigation.”
Meaning, there may be no money left to pay out victims, should the company settle the lawsuit or be found guilty of fraud.
The company’s CEO, Kyle Robertson, is named as a defendant. As such, some of his personal assets could be subject to the court-ordered freeze, should that be granted.
HealthExec reached out to Zealthy for comment.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.