A CEO of a Silicon Valley-based medical technology company was sentenced to eight years in prison for his involvement in multi-million dollar schemes that duped investors and initiated health care fraud, federal prosecutors said.

Mark Schena, 60, who served as the president of Arrayit Corporation, had been found guilty last month of claiming that he had invented a revolutionary technology to test for virtually any disease using a single drop of blood from a finger stick sample scheme, the U.S. Attorney’s Office for the Northern District of California said in a statement.

Schena was also convicted for orchestrating another scheme that paid illegal kickbacks in connection with the submission of over $77 million in claims for COVID-19 and allergy testing, federal prosecutors said.

According to the U.S. Attorney’s Office, Schena met with Arrayit’s investors, saying he was the “father of microarray technology” and that he was on the shortlist for the Nobel Prize. He also falsely claimed to investors that Arrayit could be valued at $4.5 billion.

Schena failed to tell investors that Arrayit was on the verge of bankruptcy release while hiding its financial disclosures, which is required by the Securities and Exchange Commission, investors already became suspicious that the company was a scam, prosecutors said.

Schena tried to assure them by engaging in TV show appearances and filming videos that falsely portrayed the laboratory as busy and high-tech. He also issued false press releases and public statements on social media that Arrayit had entered into lucrative partnerships with companies, government agencies, and public institutions, including a children’s hospital and a major California health care provider.

Schena led a health care fraud scheme that involved submitting fraudulent claims to Medicare and private insurance for unnecessary allergy testing. According to prosecutors, Arrayit ran allergy screening tests on every patient for 120 different allergens regardless of medical necessity. 

He paid kickbacks to marketers to obtain patient blood specimens and also led a deceptive marketing plan that falsely claimed that the Arrayit test was highly accurate in diagnosing allergies, the U.S. Attorney’s Office said.

Findings from the Health Care Fraud Unit’s Data Analytics Team showed Arrayit billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the U.S., federal prosecutors said.

‘Like a pastry chef’

In early 2020, Schena also falsely claimed that Arrayit “had a test for COVID-19.” Schena told federal agents themselves that it was simple to develop a test for COVID-19 because the switch from testing for allergies to testing for COVID-19 was “like a pastry chef” who switches from selling “strawberry pies” to selling “rhubarb and strawberry pies.” 

According to prosecutors, Schena led a marketing scheme that falsely claimed Dr. Anthony Fauci and other prominent government officials required testing for COVID-19 and allergies at the same time, requiring that patients receive the supposed Arrayit COVID-19 test. 

He also concealed from investors and patients that the U.S. Food and Drug Administration told him that the Arrayit test was not accurate enough to receive an Emergency Use Authorization in the U.S., federal prosecutors said.

“Schena put profit over public safety. He used the global pandemic as a backdrop to fuel a kickback scheme and a massive fraud upon investors and people searching for better health care during a time of great uncertainty,” U.S. Attorney Ismail Ramsey said in a statement. “Even in times of national crisis, our office will ensure that Silicon Valley remains a place where innovation and ingenuity – and not fraud and deceit – fuel vibrant markets for investors and inventors.”

Besides his prison sentence, Schena is also ordered to pay $24 million in restitution, federal prosecutors said.