A federal jury convicted the president of a Silicon-Valley based medical tech company on Monday for a scheme involving false and fraudulent COVID-19 claims.
Mark Schena, 59, of Los Altos, was the president of Arrayit Corporation and engaged in scheme to defraud the company’s investors. Schena claimed that he had invented “revolutionary” technology to test for virtually any disease using only a few drops of blood– a claim similar to that of disgraced Theranos CEO Elizabeth Holmes, who was also convicted of defrauding investors with the same claim.
In meetings with investors, Schena and his publicist claimed that he was the “father of microarray technology” and falsely stated that he was on the shortlist for the Nobel Prize.
Evidence at trial showed that Schena also falsely represented to investors that Arrayit could be valued at $4.5 billion with purported revenues of $80 million per year.
In reality, the company was on the verge of bankruptcy, but investors were sent false press releases and tweets that made it look like Arrayit had entered into lucrative partnerships with companies, government agencies, and public institutions that it had not.
Arrayit also lied about being able to test for COVID-19, though his test was never approved by the Food and Drug Administration.
The Department of Justice says that Schena “exploited” the COVID-19 pandemic to commit federal crimes such as receiving illegal kickbacks, launching deceptive marketing, and submitting fraudulent claims for reimbursement of unnecessary testing and false claims to Medicare.
All told, Schena was convicted of one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud, one count of conspiracy to pay kickbacks, two counts of payments of kickbacks and three counts of securities fraud.
Schena will be sentenced on Jan. 30, 2023 and faces a maximum of 65 years in federal prison.
