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The president of a Bay Area medical technology company was sentenced on Wednesday, Oct. 18, to eight years in prison and ordered to pay $24 million for falsely claiming he invented a technology that would test for any disease with a single drop of blood.
Mark Schena, the president of Arrayit Corporation and a Los Altos resident, also falsely claimed that his company had a test for COVID-19 in early 2020. He was originally convicted by a federal jury last September, according to the U.S. attorney’s office.
“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,” Ismail Ramsey, U.S. Attorney for the Northern District of California, said in the release.
Schena defrauded investors by claiming the value of his company to be $4.5 billion when it was on the verge of bankruptcy and by claiming that he was on the shortlist for the Nobel Prize. He also coordinated an illegal kickback and health care fraud scheme in which his company conducted unnecessary allergy tests, submitted claims to Medicare and private insurers, and falsely stated that Arrayit’s test was highly accurate in diagnosing allergies.
“Schena told federal agents 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,’” the U.S. attorney’s office release states.
He also orchestrated a “deceptive marketing scheme” that falsely claimed that public health officials were requiring COVID-19 and allergy testing at the same time and used this to encourage patients who took Arrayit’s COVID-19 test to also be tested for allergies.
Schena’s case parallels that of Elizabeth Holmes, who was sentenced to 11 years in prison last November for making similar claims that her Palo Alto-based company Theranos could test for hundreds of diseases using small amounts of blood.
