The president of a Silicon Valley medical technology company was accused Tuesday of misleading investors by falsely claiming that the company had developed a government-approved blood test for the new coronavirus, the first criminal prosecution for securities fraud related to the COVID-19 pandemic, federal officials said. .
Mark Schena, president of Arrayit Corporation, was charged with felony fraud and conspiracy to commit health fraud after authorities said his company billed Medicare $ 69 million for coronavirus and drug testing. unnecessary allergies.
Schena did not immediately return a message asking for comments.
Schena, 57, said the Sunnyvale company has the only lab in the world that offers “revolutionary microarray technology” that allowed it to test for allergies and coronavirus with the same finger stick test kit. say the prosecutors.
From 2018 to February 2020, Schena and other employees paid bribes to recruiters and doctors for an allergy test for 120 allergens ranging from stinging insects to food allergens. to each patient, authorities said.
As the coronavirus pandemic escalated, Los Altos’ Schena instructed patient recruiters and clinics to add their coronavirus test, prosecutors said.
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He is also accused of posting false claims on social media and company emails to investors about Arrayit’s ability to provide accurate, fast and inexpensive coronavirus testing in accordance with state and federal regulations.
Schena told researchers he thought developing a coronavirus test based on his allergy test would be straightforward, “like a pastry chef” going from selling “strawberry shortcakes” to selling “rhubarb and strawberry shortcakes.” .
Arrayit never revealed that the Food and Drug Administration informed him on April 17 that his COVID-19 test was not at an acceptable level of performance, federal prosecutors said.
The company also claimed partnerships with Fortune 500 companies, government agencies and public institutions, without revealing that they were trivial or did not exist, federal prosecutors said.
Arrayit’s share price more than doubled in mid-March, although the stock market crashed, according to court documents.
“The attractiveness of cheap and reliable alternatives to today’s standard blood test panels has captured the imagination of the healthcare industry, making these alternatives a major issue for scammers,” said the US prosecutor. David L. Anderson of the Northern District of California.
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