Silicon Valley Exec Sentenced for Exploiting COVID-19
Mark Schena, the former president of Silicon Valley's Arrayit Corporation, has been sentenced to eight years in federal prison for orchestrating a multi-million-dollar fraud scheme involving counterfeit COVID-19 and allergy tests. Schena, 60, was also ordered to pay $24 million in restitution. His case marks a significant moment as it is the first criminal securities fraud related to the COVID-19 pandemic brought to trial.
The False Promises of a Revolutionary Test
Schena's troubles began when he made bold claims about Arrayit's technology. He touted a revolutionary test that supposedly could diagnose almost any disease from a single drop of blood. He and his publicist even suggested that Schena was a Nobel Prize contender and that Arrayit was worth $4.5 billion. However, these claims were far from the truth. In reality, Arrayit was facing severe financial difficulties and was on the brink of bankruptcy.
Despite his claims of breakthrough technology, Schena never released the company's required financial disclosures, hiding the true state of Arrayit's finances from investors. This lack of transparency led to investors being deceived about the company's potential and stability.
Turning a Global Crisis Into an Opportunity
The COVID-19 pandemic presented an opportunity for Schena to further his fraudulent activities. In early 2020, amid the global testing shortage, Schena falsely announced that Arrayit had developed a COVID-19 test. He compared this shift in focus to a "pastry chef" changing from making "strawberry pies" to "rhubarb and strawberry pies," according to CBS News, downplaying the complexities and risks involved in creating a reliable test for a new virus.
Schena's marketing tactics during the pandemic were also misleading. He falsely claimed that prominent health officials, including Dr. Anthony Fauci, mandated simultaneous testing for COVID-19 and allergies. This deceptive strategy not only exploited the public's fear but also led to unnecessary testing and billing.
Arrayit's Scheme Unveiled
Schena's fraudulent activities extended beyond COVID-19 tests. He orchestrated an illegal kickback scheme involving Medicare and private insurance companies. Arrayit billed exorbitant amounts for allergy tests, conducting screenings for up to 120 different allergens regardless of medical necessity. This fraudulent billing was part of a broader scheme to extract millions from federal health care programs.
Schena also failed to disclose vital information to investors and the public. He issued false press releases and social media statements about Arrayit's partnerships and technological advancements. These misleading communications painted a picture of a thriving and innovative company.
The Message Behind Schena's Sentence
Mark Schena's conviction is a clear indication of how seriously the justice system treats fraud, particularly in times of crisis. His case reveals the risks associated with dishonest practices and the importance of maintaining integrity. Moving forward, this case will serve as an important reminder that exploiting emergencies for personal gain will not be tolerated.
References: Silicon Valley exec Mark Schena gets 8 years in prison for COVID-19, allergy testing fraud | Silicon Valley Executive Sentenced For Defrauding Investors And Participating In Covid-19 And Allergy Testing Scheme
