DOJ Announces “first criminal securities fraud prosecution related to the COVID-19 pandemic”

The Federal Docket

July 7, 2020

The DOJ announced charges against the president of a California-based medical company, alleging a scheme to solicit investors, manipulate his company’s stock price, and commit healthcare fraud  based on his company submitting false claims to the federal government for COVID-19 testing. The charges include one count of securities fraud and one count of conspiracy to commit healthcare fraud.

The DOJ explained that this was the first securities fraud prosecution involving COVID-19. The complaint alleges that the defendant paid kickback sand bribes to Medicare and promoted an “unproven COVID-19 test to the market.” The complaint also alleges similar practices with the defendant’s allergy screening test and allegedly false misrepresentations or exaggerations by the defendant involving his partnerships with other companies and government agencies.

At issue in this case will be the known or reasonable understanding of the COVID-19 tests by the defendant, the nature of his representations to investors, and his billing practices with Medicare.

Click here to read about healthcare fraud charges.

Click here to read the DOJ’s press release.

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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