New charges against the president of a medical technology company and two others in connection with alleged fraudulent Covid-19 testing program | USAO-NDCA

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SAN FRANCISCO – A federal grand jury has entered an alternative indictment against the chairman of California-based medical technology company Arrayit Corporation, Mark Schena, in connection with the submission of more than $ 70 million in false and fraudulent claims for allergy and COVID-19 testing. In addition, criminal information has been filed against each of Paul Haje, vice president of marketing at Arrayit, and Marc Jablonski, president of an Arizona-based marketing organization, in connection with related schemes. The new charges are part of coordinated law enforcement actions filed in seven federal districts across the United States in response to alleged healthcare fraud schemes that allegedly exploited the COVID-19 pandemic. The US Department of Justice estimates that more than $ 143 million in false invoices were generated in connection with these cases. A press release issued by the US Department of Justice summarizing nationally coordinated law enforcement actions can be viewed here.

The indictment charges and the information filed in the Northern District of California were announced by Acting United States Attorney Stephanie M. Hinds; FBI Special Agent in Charge Craig D. Fair; Acting Assistant Attorney General Nicholas L. McQuaid of the Criminal Division of the Department of Justice; Special Agent in Charge Steven J. Ryan for the Office of the Inspector General of the US Department of Health and Human Services; Inspector in Charge Delany De Leon-Colon of the United States Postal Inspection Service (USPIS) – Criminal Investigation Group; Special Agent in Charge Kim R. Lampkins of the Office of the Inspector General of Veterans Affairs (VA OIG); and Special Agent in Charge Bryan D. Denny, Defense Criminal Investigation Service, Western Field Office.

According to the replacement indictment and additional documents previously filed in the case, starting in 2015 and continuing through February 2020, Schena, 58, of Los Altos, Calif., Engaged in a scheme aimed at defrauding Arrayit investors and the public by, among other things, exaggerating the status and influence of Arrayit and by artificially increasing and maintaining the price of Arrayit shares. Schena and others are said to have paid bribes to recruiters and doctors to perform an allergy test for 120 allergens (including things ranging from stinging insects to food allergens) on every patient regardless of the condition. medical necessity, then have made numerous false claims to potential investors about Arrayit’s allergy testing sales, financial situation and its future prospects. Documents filed in case allege Schena touted Arrayit as the “only lab in the world to deliver” breakthrough “microarray technology” for Arrayit to test for allergy and COVID-19 on a drop basis. blood volume 250,000 times smaller than the technology presented by Theranos. Schena said it was straightforward to develop a test for COVID-19 because the switch from allergy testing to COVID-19 testing was “like a pastry chef” going from selling “strawberry pies” to sale of “rhubarb and strawberry pies”. Schena and others issued press releases and tweeted about partnerships with Fortune 500 companies, government agencies and public institutions, without revealing that such partnerships did not exist or had de minimis value.

The replacement indictment reinforces previous charges against Schena by adding new counts of healthcare fraud and conspiracy allegations. Specifically, the previous indictment alleges that Schena conspired with others to pay bribes, administer fraudulent and unnecessary tests, and make false and fraudulent statements about the existence, regulatory status and the accuracy of a COVID-19 Arrayit test. According to the indictment that replaces it, the conspiracy sought to induce the order of the Arrayit COVID-19 test and to regroup, that is to say, require a combination with the COVID-19 test and the test of Arrayit medically unnecessary allergy. COVID-19 test results were not provided in a timely manner and were unreliable in detecting COVID-19.

Information filed against Haje alleges that he conspired with Schena to solicit and pay bribes and bribes in exchange for services such as ordering allergy tests for beneficiaries and inducement on the recommendation of members. Further, reports allege that Haje caused the submission of fraudulent claims to insurers, including Medicare, Medicaid, TRICARE and commercial insurers, as well as diverted the proceeds from the illegal bribe program for its use and benefit. personal, as well as to promote illegal bribery. conspiracy.

Likewise, information filed against Jablonski, the president of an Arizona-based marketing organization, alleges that he conspired to defraud the United States and agreed to pay and receive illegal bribes for them. health care. Specifically, the reports allege that Jablonski solicited and received bribes and bribes from Schena in exchange for arrangements for doctors to take blood samples and order allergy tests for them. beneficiaries and members to be performed by Arrayit. The information also alleges that Jablonski paid illegal bribes and bribes to other traders and that he illegally maximized the amount of reimbursement claims that Arrayit would send to insurers by forcing them doctors to order unnecessary and otherwise inappropriate allergy tests through Arrayit.

Indictments and criminal accusations contain only allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt by a court.

The superseding indictment charges Schena with conspiracy to commit health care fraud and wire fraud, in violation of 18 USC § 1349; healthcare fraud, in violation of 18 USC § 1347; conspiracy to pay an illegal bribe, in violation of 18 USC § 371; payment of illegal bribes, in violation of 18 USC § 220; and securities fraud, in violation of 15 USC §§ 78j & 78ff and 17 CFR 240.10b-5. Both Haje and Jablonski are charged with Conspiracy to Defraud the United States, in violation of 18 USC § 371. Haje is also charged with Conspiracy to Commit Health Care Fraud, in violation of 18 USC § 371. USC § 1349. If found guilty, defendants face the following maximum penalties provided by law:

Respondent

Load

Maximum penalty (per account)

Schena

Conspiracy to commit healthcare fraud and electronic fraud

(18 USC § 1349)

20 years in prison,

$ 250,000 fine

Healthcare fraud

(18 USC § 1347)

(two counts)

10 years in prison,

$ 5,000,000 fine

Conspiracy to pay illegal bribes

(18 USC § 371)

5 years in prison,

$ 250,000 fine

Payment of illegal bribes

(18 USC § 220)

(two counts)

10 years in prison,

$ 200,000 fine

Securities fraud

(15 USC §§ 78j & 78ff

and 17 CFR 240.10b-5)

(three counts)

20 years in prison,

$ 5,000,000 fine

Haje

Conspiracy to defraud the United States and pay and receive bribes

(18 USC § 371)

5 years in prison,

$ 250,000 fine

Conspiracy to commit healthcare fraud

(18 USC § 1349)

20 years in prison,

$ 250,000 fine

Jablonski

Conspiracy to defraud the United States

(18 USC § 371)

5 years in prison,

$ 250,000 fine

The court can also order additional conditions of supervised release, fines, confiscation and restitution. USC § 3553.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF web complaint form at: https: //www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.

The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to that case. Victims who have questions can contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance hotline at 1-888-549-3945 or by sending an email to Victimassistance. [email protected] To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

Deputy U.S. Attorney William Frentzen of the Northern District of California, Acting Senior Deputy Chief Justin Weitz of the Fraud Section’s Market Integrity and Major Fraud Unit, and Deputy Chief Jacob Foster of the National Rapid Reaction Force are suing the case. This case was investigated by the San Francisco regional office of the HHS-OIG and the Detroit regional office, USPIS, FBI, VA-OIG and DCIS. The department appreciates the help of the Securities and Exchange Commission.

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