California businessman accused of major coronavirus test fraud
Authorities said his company billed Medicare $ 69 million for optional and inappropriate testing for allergies and coronavirus, writes Fox Business.
On June 9, the president of a medical technology company in Silicon Valley was accused of misleading investors by falsely claiming that the company had developed a government-approved coronavirus blood test. This is the first prosecution for securities fraud related to the COVID-19 pandemic.
Mark Chen, president of Arrayit Corporation, was charged with securities fraud and health fraud after authorities claimed his company billed Medicare $ 69 million for unnecessary coronavirus and allergy tests.
The 57-year-old Shena advertised that the company based in Sunnyvale has the only laboratory in the world to offer “revolutionary microarray technology” that allows allergy testing and coronavirus testing using the same finger collection kit.
From 2018 until February 2020, Shena and others paid bribes to doctors to screen each patient for 120 allergens, from insects to food, for each patient.
As the coronavirus pandemic intensified, Shena instructed all recruited professionals to add a coronavirus test developed by the company, prosecutors said.
He is also accused of posting false claims on social media and emails to investors about Arrayit’s ability to provide accurate, fast, reliable and cheap coronavirus tests in accordance with country and state regulations.
Shena told investigators that, in his opinion, developing a coronavirus test based on an allergy test would be simple, "like a confectioner," which goes from selling strawberry pies to selling rhubarb and strawberry pies.
Arrayit never revealed the fact that on April 17, the Food and Drug Administration rated the company’s test for COVID-19 as not meeting acceptable quality levels, federal prosecutors said.
Federal attorneys also said the company is announcing partnerships with Fortune 500 firms, government, and state agencies, without revealing that the relationship is either insignificant or non-existent.
According to court documents, the price of Arrayit shares more than doubled by mid-March, even despite the stock market crash.
“The allure of cheap, reliable alternatives to today's standard blood test panels has captured the imagination of the healthcare industry, making such alternatives a major speculation by scammers,” said Attorney David Anderson of California's Northern Judicial District.
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