Headlines that Matter for Companies and Executives in Regulated Industries
Medical Technology Company President Convicted for Participation in $77 Million COVID-19 and Allergy Testing Scheme
On September 1, 2022, the president of Arrayit Corporation, a medical technology company in Silicon Valley, was convicted by a federal jury for his participation in a scheme involving the submission of over $77 million in false claims for COVID-19 and allergy testing.
According to court documents and trial evidence, the defendant engaged in a scheme to defraud the company’s investors by alleging that he had invented new technology that would be able to use only a few drops of blood to test for any disease. Trial evidence showed that the defendant misrepresented the company valuation to investors, claiming that the company could be valued at $4.5 billion based on supposed revenues of $80 million per year.
Trial evidence also showed that the defendant failed to release financial disclosures required by the SEC, and also hid from investors that Arrayit was near bankruptcy. The evidence further showed that the defendant induced investors by holding private meetings, and issuing press releases and tweets which falsely stated that the company had partnered with certain companies, public institutions, or government agencies, and fraudulently claimed that such entities had agreed to use the company technology.
The defendant also allegedly participated in a health care fraud scheme by paying...
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