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Only A Drop Of Blood

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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Arrayit Corporation falsely claimed to have invented a technology to test for any disease using a drop of blood. Wait! A Silicon Valley executive who prosecutors said lied to investors about inventing technology? Again? Yes. Again. But different fraudster and this one involves taxpayers’ dollars.

Mark Schena laid it on thick in his lies as Arrayit’s president, issuing false press releases and tweets stating that Arrayit had entered into lucrative partnerships with companies, government agencies, and public institutions, including a children’s hospital and a major California health care provider. He even went so far to tell investors he was he was on the shortlist for the Nobel Prize the “father of microarray technology.” In reality, Schena was the “father of a microarray fraud.”

Despite the technology not working, Arrayit billed more per patient fees to Medicare and commercial insurances for blood-based allergy testing than any other laboratory in the United States, at over $10,000 per test. In early 2020, Arrayit’s allergy testing business declined because the COVID-19 pandemic and stay-at-home orders reduced demand for allergy testing.

But instead of applying for the CARES Act Paycheck Protection Program loans like all the other fraudsters did, Schena chose to falsely announce that Arrayit “had a test for COVID-19,” before developing such a test, seeking to capitalize on the nationwide shortage of COVID-19 testing.

Thankfully, the Security Exchange Commission suspended trading of Arrayit shares in April 2020 for a period of two weeks due to questions over the accuracy of its public financial information and the quality of its COVID blood test.  Further investigations by the Department of Health and Human Services ensued. On September 1, 2022, Schena was convicted of multiple counts of healthcare fraud. He is scheduled to be sentenced in January 2023.

Shout out to the SEC for demanding proof of product from Arrayit when seeking public trade.

Today’s Fraud of the Day is based on an article “California Biotech Executive Is Guilty in $77 Million Blood-Testing Scheme” published by the New York Times on September 2, 2022

A biotech executive in California was convicted on Thursday of orchestrating a $77 million scheme involving false and fraudulent claims for Covid-19 and allergy testing, federal prosecutors said.

The executive, Mark Schena, 59, served as the president of Arrayit Corporation, a biomedical company that claimed to have invented technology to test for any disease using only a finger-prick drop of blood. According to the Arrayit website, its “microarray” technology could test for ovarian cancer, Parkinson’s disease, colon cancer and male fertility, among other diseases and conditions.

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