Silicon Valley Firm Arrayit’s President Convicted for COVID-19, Allergy Testing Scheme

Mark Schena, president of Silicon Valley-based medtech company Arrayit Corporation was convicted by a federal jury last week for misleading investors, healthcare fraud, and illegal kickbacks from submission of $77 million in false, fraudulent claims for COVID-19 and allergy testing.
 
Schena (59), according to court documents and evidence presented at trial, defrauded investors by claiming he’d invented technology to test for virtually any disease with a few drops of blood. Schena and his publicist claimed Schena was the “father of microarray technology” and falsely said he was on the shortlist for the Nobel Prize.
 
Schena also falsely stated to investors Arrayit could be valued at $4.5 billion based on purported $80 million revenues.
 
Trial evidence also showed Schena failed to release SEC-required financial documents and concealed Arrayit was on the brink of bankruptcy. He lulled investors who were concerned about a “scam” with invitation to false meetings and producing false press releases and tweets claiming the company partnered with companies, government agencies, and public institutions. The false reports said the entities agreed to use the Arrayit technology.
 
Schena also masterminded a kickback and healthcare fraud scheme for unnecessary allergy testing and fraudulent claims to Medicare and private insurance.
 
Arrayit ran allergy screening tests on every patient for 120 different allergens (ranging from hornet stings to codfish) regardless of medical necessity. To get patient blood specimens, Schena paid kickbacks to marketers and built a deceptive marketing plan falsely claiming the Arrayit test was “highly accurate” in diagnosing allergies, when it was not a diagnostic test. Arrayit billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the U.S., the evidence at trial showed, and billed some commercial insurers over $10,000 a test.
 
In early 2020, Arrayit’s allergy testing business declined because COVID-19 and stay-at-home orders reduced allergy testing demand. Schena then falsely announced Arrayit “had a test for COVID-19” based on its blood testing technology, before developing a test. Seeking to capitalize on the nationwide COVID-19 testing shortage, Schena created deceptive marketing that falsely claiming Dr. Anthony Fauci and other prominent government officials mandated testing for COVID-19 and allergies at the same time and required patients receiving the Arrayit COVID-19 test also be tested for allergies.
 
Schena also falsely claimed the Arrayit COVID-19 test was more accurate than a PCR test for diagnosing COVID-19 infections, while concealing from investors and patients taking the test that the FDA had informed him the Arrayit test was not accurate enough to receive an Emergency Use Authorization.
 
Schena was convicted of one count of conspiracy to commit healthcare fraud and conspiracy to commit wire fraud, two counts of healthcare fraud, one count of conspiracy to pay kickbacks, two counts of payment of kickbacks, and three counts of securities fraud. He is scheduled to be sentenced Jan. 30, 2023 and faces a maximum penalty 20 years imprisonment for the conspiracy to commit healthcare fraud and conspiracy to commit wire fraud; 10 years of imprisonment for each count of healthcare fraud; five years imprisonment for conspiracy to pay kickbacks; 10 years imprisonment for each count of payment of kickbacks; and 20 years imprisonment for each count of securities fraud.