The previous chief govt of a biotechnology firm who, in the course of the early days of the pandemic, falsely claimed that he had invented a blood take a look at that would detect Covid-19 in 15 seconds was sentenced on Friday to seven years in jail for securities fraud, federal prosecutors mentioned.
From February 2020 to December 2020, the previous govt, Keith Berman, 70, of Westlake Village, Calif., engaged in a scheme to defraud folks into investing in his firm, Resolution Diagnostics Company, by claiming the take a look at might detect Covid utilizing a finger prick pattern of blood, prosecutors mentioned.
In March and April 2020, Mr. Berman issued 12 “false and deceptive” information releases describing the speedy Covid take a look at, which his firm known as GenViro, prosecutors wrote. Resolution Diagnostics’ inventory worth jumped by greater than 1,500 % in the course of the interval, prosecutors mentioned.
In actuality, prosecutors mentioned, Mr. Berman had “privately confided in a buddy the take a look at couldn’t truly detect Covid-19.”
Prosecutors accused Mr. Berman, the only director of the publicly traded medical machine firm, of capitalizing on folks’s fears concerning the pandemic in an effort to resuscitate the corporate’s fortunes.
Mr. Berman’s scheme resulted in about $28 million in investor losses, prosecutors mentioned. Mr. Berman was indicted in December 2020, and he pleaded responsible in December 2023 to securities fraud, wire fraud and obstruction of an official continuing.
Initially of 2020, Resolution Diagnostics was in perilous monetary form as a result of, amongst different causes, Mr. Berman had spent a whole lot of 1000’s of {dollars} in firm funds to hold on a web-based relationship with a webcam mannequin, prosecutors wrote in court docket papers.
Mr. Berman falsely advised buyers that the Meals and Drug Administration was on the verge of approving Resolution Diagnostics’ request for an emergency use authorization for the Covid take a look at, prosecutors mentioned. However Mr. Berman knew that his firm was unable to fulfill the F.D.A.’s scientific testing necessities, prosecutors wrote.
After the Securities and Trade Fee questioned Mr. Berman’s claims concerning the take a look at, prosecutors wrote in court docket papers, he “launched a relentless marketing campaign of lies geared toward ruining the lives and careers of the S.E.C. workers by falsely accusing them of committing critical crimes.”
Federal prosecutors had requested that he be sentenced to 10 years in jail, calling him “a merciless and callous felony” who “gave folks false hope” that his take a look at was a actuality.
“Keith Berman not solely misrepresented himself and lied a couple of phony Covid-19 diagnostic take a look at to entice unsuspecting buyers, however he additionally engaged in threats and obstructed a federal investigation,” Michael D. Nordwall, assistant director of the F.B.I.’s felony investigative division, mentioned in an announcement.
Mr. Berman’s lawyer, Kevin B. Collins, wrote in court docket papers that his shopper had been in jail since March 2023 and requested that he be sentenced to time served. Mr. Collins wrote that Mr. Berman had put “real effort” into making a speedy Covid-19 blood take a look at.
“When the Covid-19 pandemic hit, he believed he might supply the world a take a look at package that might give folks the possibility to return to some semblance of normalcy,” Mr. Collins wrote. “However he made errors.”
For 20 years, Mr. Berman had offered units that helped folks with diabetes monitor their blood glucose ranges, utilizing a kind of know-how that may detect the electrochemical signature of a blood pattern, Mr. Collins wrote.
In late February 2020, as demand for Covid checks exploded, Mr. Berman believed that he might “leverage his data of this know-how to invent a tool that would detect Covid-19 in blood,” Mr. Collins wrote.
Mr. Berman consulted with consultants in the US and South Korea to “work up design specs, and he employed F.D.A.-savvy counsel to try to get the requisite approvals,” his lawyer wrote.
However on the time, Mr. Collins wrote, “Mr. Berman wanted cash, so he issued press releases misstating the standing of his challenge to lift the funds wanted to finish it and personally enrich himself from the corporate’s success.”
Mr. Collins famous that Mr. Berman had admitted to his crimes by pleading responsible.
“His fame is now in tatters,” Mr. Collins wrote. “His enterprise is destroyed. His relationship along with his household is strained. And at 70, with vital medical points and a felony conviction, his probabilities of residing his life like earlier than are nonexistent.”
