By OLGA R. RODRIGUEZ | The Related Press
SAN FRANCISCO — A Silicon Valley government who prosecutors mentioned lied to buyers about inventing know-how that examined for allergy symptoms and COVID-19 utilizing only some drops of blood and charged as much as $10,000 per allergy check was discovered responsible of well being care fraud, authorities introduced Friday.
A federal jury on Thursday convicted Mark Schena, of Los Altos, California, of paying bribes to medical doctors and defrauding the federal government after his firm billed Medicare $77 million for fraudulent coronavirus and allergy exams, the U.S. Division of Justice mentioned in an announcement.
Schena, 59, claimed his Sunnyvale, California-based firm, Arrayit Company, had the one laboratory on the planet that provided “revolutionary microarray know-how” that allowed it to check for allergy symptoms and the coronavirus with the identical finger-stick check package, prosecutors mentioned.
Alexandra Block, an legal professional representing Schena, didn't instantly return a cellphone message Friday in search of remark.
The case in opposition to Schena shared similarities with a extra outstanding authorized saga surrounding former Silicon Valley star Elizabeth Holmes, who dropped out of Stanford College in 2003 to discovered an organization known as Theranos that she pledged would revolutionize well being care with a know-how that might scan for a whole lot of illnesses and different points with just some drops of blood, too.
As Theranos’ CEO, Holmes went on to boost practically $1 billion from profitable enterprise leaders resembling Oracle founder Larry Ellison and media mogul Rupert Murdoch. Holmes, now 38, was convicted on 4 felony counts of investor fraud in January following an almost four-month trial in the identical San Jose, California, courtroom the place Schena’s trial was held.
Holmes faces as much as 20 years in jail at her Oct. 17 sentencing.
The 2 circumstances intersected briefly Thursday morning when the jury deliberating in Schena’s trial despatched three inquiries to the choose, triggering an hourlong delay in a listening to about Holmes’ unsuccessful try and overturn the jury’s conviction of her.
Prosecutors mentioned that after Arrayit’s allergy testing enterprise declined in 2020 amid the pandemic, Schena falsely introduced that his firm had a check for COVID-19 primarily based on its blood testing know-how earlier than even growing it. After his firm submitted it to the Meals and Drug Administration, he didn't disclose that the FDA concluded the check was not correct sufficient to be approved for emergency use, prosecutors mentioned.
“Schena orchestrated a misleading advertising and marketing scheme that falsely claimed that Dr. Anthony Fauci and different outstanding authorities officers had mandated testing for COVID-19 and allergy symptoms on the similar time and required that sufferers receiving the Arrayit COVID-19 check even be examined for allergy symptoms,” they mentioned.
Arrayit’s inventory value greater than doubled by mid-March 2020, even because the inventory market was crashing, in accordance with courtroom paperwork.
Schena additionally didn't launch Arrayit’s SEC-required monetary disclosures and hid that Arrayit was on the verge of chapter, prosecutors mentioned. The case in opposition to him was the primary prison securities fraud prosecution associated to the COVID-19 pandemic, they mentioned.
Earlier than the pandemic, from 2018 by way of February 2020, Schena and different staff paid bribes to recruiters and medical doctors to run an allergy screening check for 120 allergens starting from stinging bugs to meals allergens on each affected person whether or not they had been wanted or not, authorities mentioned.
“Arrayit billed extra per affected person to Medicare for blood-based allergy testing than every other laboratory in the US and billed some industrial insurers over $10,000 per check,” they mentioned.
Schena was convicted of 1 depend of conspiracy to commit well being care fraud and conspiracy to commit wire fraud, two counts of well being care fraud, one depend of conspiracy to pay kickbacks, two counts of cost of kickbacks, and three counts of securities fraud.
He faces as much as 20 years in jail at a Jan. 30 sentencing.
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Related Press Know-how Author Michael Liedtke contributed to this story from San Ramon, California.