Judge sentences Silicon Valley CEO to 8 years in COVID-19, allergy test fraud case

SUNNYVALE, Calif. - A Silicon Valley executive who lied to investors about inventing technology that tested for allergies and COVID-19 using only a few drops of blood was sentenced Wednesday to eight years in prison and ordered to pay $24 million in restitution, federal prosecutors said.

Mark Schena, 60, was convicted last year of paying bribes to doctors and defrauding the government after his company billed Medicare $77 million for fraudulent COVID-19 and allergy tests, the U.S. Department of Justice said in a statement.

Schena claimed his Sunnyvale-based company, Arrayit Corporation, had the only laboratory in the world that offered "revolutionary microarray technology" that allowed it to test for allergies and COVID-19 with the same finger-stick test kit, prosecutors said.

In meetings with investors, Schena claimed he was on the shortlist for the Nobel Prize and falsely represented that Arrayit could be valued at $4.5 billion, prosecutors said.

Before the COVID-19 pandemic, from 2018 through February 2020, Schena and other employees paid bribes to recruiters and doctors to run an allergy screening test for 120 allergens ranging from stinging insects to food allergens on every patient whether they were needed or not, authorities said.

The case against Schena shared similarities with a more prominent legal saga surrounding former Silicon Valley star Elizabeth Holmes, who dropped out of Stanford University in 2003 to found a company called Theranos that she pledged would revolutionize health care with a technology that could scan for hundreds of diseases and other issues with just a few drops of blood, too.

Holmes was convicted on four felony counts of investor fraud following a nearly four-month trial in the same San Jose, California, courtroom where Schena’s trial was held. 

In May, Holmes entered a Texas prison where she could spend the next 11 years.