U.S. charges firm president, trader in COVID-19 fraud schemes

U.S. authorities on Tuesday said they have charged the head of California medical technology firm Arrayit Corp and an investor in the company, alleging that they had roles in schemes related to COVID-19 claims. The U.S. Attorney for the Northern District of California charged Mark Schena, president of Arrayit Corp, with taking part in schemes to defraud the U.S. Medicare program and to mislead investors over COVID-19 tests. It was the Department of Justice’s first criminal securities fraud prosecution related to the coronavirus pandemic. The case alleges that Schena and others submitted fraudulent allergy test claims to the Medicare Program that were procured by payment of illegal kickbacks and bribes. The complaint unsealed on Tuesday said that he and others also shared email communications and marketing materials that “misrepresented Arrayit’s ability to provide accurate, fast, reliable and cheap COVID-19 tests.” Neither Schena nor a company representative responded immediately to requests for comment. In a separate civil action, the Securities and Exchange Commission charged California trader Jason C. Nielsen with defrauding investors through a “pump and dump” scheme involving Arrayit. Nielsen, an investor who owned about 10% of common stock of Arrayit, posted numerous false and misleading statements in an internet forum called “Investors Hub” to drive up prices of shares and then sold them at artificially-inflated prices, the SEC said. Nielsen also used a market manipulation technique known as “spoofing” to create a false appearance of demand for the shares, according to SEC. Nielsen could not be reached for comment. In a U.S. crackdown on coronavirus misconduct, DOJ has charged several individuals with defrauding the U.S. coronavirus bailout program. The SEC has suspended trading in more than 30 so-called penny stocks, alleging they touted dubious COVID-19 cures, tests, treatments and medical supplies to investors. The agency suspended trading of Arrayit shares in April.

Comments are closed.