The previous CEO of a Silicon Valley-based tech firm was sentenced to eight years in jail after lied about his firm’s skill to check for COVID-19 — in a way just like the claims that landed former Theranos CEO Elizabeth Holmes behind bars, in keeping with federal prosecutors.
Whereas heading up the Arrayit Company, Los Altos resident Mark Schena, 60, defrauded buyers via his claims that he created a “revolutionary know-how” by inventing medical checks that would diagnose just about any illness via a single drop of the affected person’s blood. Schena’s sentence was introduced in a information launch from Ismail Ramsey, the U.S. Lawyer for the Northern District of California.
Prosecutors stated Schena and his publicists falsely informed buyers that he was the “father of microarray know-how,” that he was on the shortlist for a Nobel Prize and that his firm may very well be valued at $4.5 billion.
Schena was unsuccessful in an try to develop a COVID take a look at as soon as the pandemic hit, however continued to market his take a look at as one in an try to keep away from chapter.
Prosecutors stated that Schena falsely introduced his firm had created a COVID take a look at in early 2020. He informed federal brokers that producing COVID checks was a easy process to modify from testing for allergy symptoms to the virus as a result of it was like a pastry chef switching from baking “strawberry pies” to “rhubarb and strawberry pies.”
The Meals and Drug Administration knowledgeable Schena that Arrayit’s COVID take a look at was “not correct sufficient” to obtain emergency authorization to make use of within the early days of the pandemic — a undeniable fact that he hid from buyers and take a look at customers. Schena additionally led a deceptive advertising marketing campaign falsely claiming that Dr. Anthony Fauci, then-Director of the Nationwide Institute of Allergy and Infectious Illnesses, mandated that sufferers testing for COVID be examined for allergy symptoms on the identical time.
“A Silicon Valley govt exploited the pandemic for revenue, in the end endangering sufferers with unproven COVID-19 checks,” stated Appearing Assistant Lawyer Basic Nicole M. Argentieri of the Justice Division’s Legal Division.
Prosecutors additionally stated that Schena misled buyers and the general public all through the pandemic. He by no means revealed that Arrayit was on the verge of chapter, and fraudulently displayed the corporate’s laboratory as “busy and high-tech” to potential buyers.
Schena usually put out information releases and social media statements claiming that his firm had partnered with different corporations, authorities entities and public establishments like a youngsters’s hospital and huge health-care suppliers. Based on prosecutors, he claimed that these entities signed profitable offers to make use of Arrayit COVID checks, when in actuality, these offers by no means existed, or have been minor.
One other misleading advertising plan concerned Arrayit’s allergy checks. The corporate claimed its checks have been extremely correct in diagnosing allergy symptoms, when the truth is, they weren’t prognosis checks to start with, prosecutors stated.
In a well being care scheme, Schena ordered that every one sufferers be examined for 120 completely different allergens, even when there was no medical want to take action. He then submitted claims to Medicare and personal medical health insurance corporations for the pointless checks. With that cash, he paid kickbacks to entrepreneurs.
In all, Schena submitted about $77 million value of claims for his COVID and allergy checks. As a part of his sentencing, Schena was ordered to pay $24 million in restitution. He was convicted in Sept. 2022.
“Mr. Schena’s sentencing is a becoming decision that holds him accountable for a multimillion-dollar fraudulent scheme pushed purely by greed and devoid of fiscal accountability or concern for the sufferers that might in the end use his practically ineffective merchandise,” stated Director Kelly P. Mayo of the Division of Protection Workplace of Inspector Basic, Protection Legal Investigative Service.
