WASHINGTON: Keith Berman, CEO and director of Decision Diagnostics Corp (DECN), a public medical device company, has pleaded guilty to securities fraud and wire fraud in connection with his scheme to defraud investors by making false and misleading statements about the development of a new, blood-based Covid-19 test, leading to millions of dollars in investor losses.
According to court documents, Berman and DECN were in precarious financial condition in the lead up to the Covid-19 pandemic, and Berman wrote in internal emails that he needed a “new story” to “raise millions.”
Additionally, Berman had spent hundreds of thousands of dollars of company money on personal expenditures, despite publicly claiming not to take any compensation, according to the US Department of Justice.
Faced with these financial difficulties, from February through December 2020, Berman engaged in a scheme to defraud investors by falsely claiming that DECN had developed a 15-second test to detect Covid-19 in a finger prick sample of blood.
Despite his claims to the investing public, Berman knew that no such test existed.
Berman also falsely told investors that the Food and Drug Administration (FDA) was on the verge of approving DECN’s request for emergency use authorization of its purported Covid-19 test, according to the DoJ.
In truth, Berman knew that his company was unwilling and unable to meet the clinical testing required by the FDA but concealed these material facts and misled investors.
Berman pleaded guilty to one count each of securities fraud, wire fraud, and obstruction of an official proceeding.
He is scheduled to be sentenced on April 12, 2024, and faces a maximum penalty of 20 years in prison.