Silicon Valley biotech executive convicted in $77M COVID-19 and allergy testing scheme

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Mark Schena, CEO of Arrayit, appeared on KTVU's The Four on November 22, 2019.

SUNNYVALE, Calif. - A federal jury has convicted the president of a Silicon Valley medical tech company on charges he carried out an elaborate scheme that led to $77 million in false and fraudulent claims for COVID-19 and allergy testing.

Mark Schena, 59, was the president of Sunnyvale-based Arrayit Corporation. Investigators said he misled investors, committed health care fraud, and paid illegal kickbacks.

The Department of Justice (DOJ) said that Schena lied about being able to test for COVID-19, though his test was never approved by the Food and Drug Administration.

Federal investigators said Schena sought to capitalize on the nationwide shortage of COVID-19 testing and "orchestrated a deceptive marketing scheme that falsely claimed that Dr. Anthony Fauci and other prominent government officials had mandated testing for COVID-19 and allergies at the same time and required that patients receiving the Arrayit COVID-19 test also be tested for allergies."

According to court documents, Schena also claimed that he invented "revolutionary technology" to test for virtually any disease using only a few drops of blood-- similar to the claim made by former Theranos CEO Elizabeth Holmes, who was also convicted of defrauding investors.

"In meetings with investors, Schena and his publicist claimed that Schena was the ‘father of microarray technology’ and falsely stated that he was on the shortlist for the Nobel Prize," said the DOJ said in a news release on Friday.

Investigators said Schena concealed that Arrayit was actually on the verge of bankruptcy and failed to release the company's Securities and Exchange Commission-required financial disclosures.

"The evidence at trial showed that Schena also falsely represented to investors that Arrayit could be valued at $4.5 billion based on purported revenues of $80 million per year," the Deparment of Justice said.

Investigators accused Schena of exploiting the COVID-19 pandemic to commit federal crimes such as receiving illegal kickbacks, launching deceptive marketing, and submitting fraudulent claims for reimbursement of unnecessary testing and false claims to Medicare.

He was convicted of one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud, one count of conspiracy to pay kickbacks, two counts of payments of kickbacks and three counts of securities fraud.

Schena was set to be sentenced on Jan. 30, 2023 and could face a maximum sentence of 125 years in federal prison.

Bay City News contributed to this story.