Silicon Valley Executive Sentenced to 8 Years in Prison for Deceptive Medical Technology Claims
A Silicon Valley executive has been handed an eight-year prison sentence and ordered to pay $24 million in restitution for deceiving investors and defrauding the government. Mark Schena, aged 60, was found guilty of bribing doctors and overbilling Medicare by $77 million for COVID-19 and allergy tests that his company, Arrayit Corporation, falsely claimed were revolutionary.
Schena’s company, based in Sunnyvale, California, touted a “revolutionary microarray technology” that supposedly allowed it to perform allergy and COVID-19 tests using a mere drop of blood from a finger stick. This was all part of his scheme to attract investors.
In meetings with potential investors, Schena went to great lengths to exaggerate his achievements, even going so far as to falsely suggest he was a contender for the Nobel Prize. He also misrepresented that Arrayit Corporation could be valued at a staggering $4.5 billion.
Before the COVID-19 pandemic, Schena and his associates resorted to bribery tactics to drive their profits. Between 2018 and February 2020, they paid recruiters and doctors to conduct allergy screenings for 120 different allergens, including everything from stinging insects to food allergens, on every patient, whether it was medically necessary or not.
This case bears some resemblance to the high-profile legal saga of Elizabeth Holmes, the founder of Theranos, another Silicon Valley startup. Holmes, who promised groundbreaking health care innovations with a technology that could diagnose numerous diseases using just a few drops of blood, was convicted on four counts of investor fraud and is now serving time in a Texas prison, potentially for the next 11 years.
The sentencing of Mark Schena serves as a stark reminder of the consequences that await those who engage in fraudulent and deceptive practices within the tech and healthcare industries.