Among the many forms of COVID-19 fraud, perhaps none is more insidious than peddling bogus COVID-19 testing. It not only poses risk to the fraud victims, but also to the public at large. Mark Schena, the president of California-based medical technology company Arrayit Corporation, is alleged to have masterminded such a scheme along with other fraudulent activities. (If the allegations are true, it’s a new low for a company that ostensibly supports healthcare.)
Investigators allege that Schena conspired with others to pay kickbacks and bribes for administering fraudulent and unnecessary medical testing and made false statements about a purported Arrayit COVID-19 test. Schena allegedly sought to bundle Arrayit’s so-called COVID-19 test with a medically unnecessary allergy test panel. (Right, adding a major dash of patient misinformation and confusion.)
Investigators claim that the COVID-19 test results were not reliable in detecting the virus and were not provided to patients in a timely manner. (Precisely what no one wants in COVID-19 testing.) The company purportedly ran the allergy screening test on every patient, regardless of medical need.
Investigators further allege that Schena’s company fraudulently billed Medicare, Medicaid, and TRICARE insurers more than $70 million in the testing scheme, and diverted funds resulting from illegal kickbacks to Schena’s personal use. (If true, another huge violation of trust for a health-related enterprise.) The company purportedly misrepresented the value of its allergy test sales, financial condition, and future prospects in an effort to defraud Arrayit investors and the public, and artificially increase and maintain the company’s share price.
Charges against Schena include conspiracy to commit healthcare fraud and wire fraud; healthcare fraud; conspiracy to pay illegal kickbacks; payment of illegal kickbacks; and securities fraud. If convicted of all charges, Schena faces up to 65 years in prison and up to $10,700,000 in fines. (And if he’s guilty, maximum sentencing seems quite appropriate.) The court may also order additional terms such as supervised release, fines, forfeitures, and restitution. Alleged co-conspirators also face potential prison terms, fines, and other sentencing.
Today’s Fraud of the Day comes from a press release from the U.S. Attorney’s Office for the Northern District of California, “New Charges Filed Against Medical Technology Company President and Two Others in Alleged Fraudulent Covid-19 Testing Scheme,” dated May 26, 2021.
SAN FRANCISCO –A federal grand jury handed down a superseding indictment against the president of California-based medical technology company Arrayit Corporation, Mark Schena, in connection with the submission of over $70 million in false and fraudulent claims for allergy and COVID-19 testing. Additionally, a criminal information was filed against each of Paul Haje, Arrayit’s Vice President of Marketing, and Marc Jablonski, president of an Arizona-based marketing organization, in related schemes. The new charges are part of coordinated law enforcement actions filed in seven federal districts throughout the United States in response to alleged health care fraud schemes that are said to have exploited the COVID-19 pandemic. The U.S. Department of Justice estimates that over $143 million in false billings were generated in connection with these cases. A press release issued by the U.S. Department of Justice summarizing the nationwide coordinated law enforcement actions can be found here.
The charges in the superseding indictment and informations 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 Department of Justice’s Criminal Division; Special Agent in Charge Steven J. Ryan for the Office of Inspector General of the U.S. Department of Health and Human Services; Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service (USPIS) – Criminal Investigations Group; Special Agent in Charge Kim R. Lampkins of the Veterans Affairs Office of Inspector General (VA OIG); and Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service, Western Field Office.
