The boss of a healthcare firm faces 20 years in jail over a fraud where the company claimed to have millions of Covid-19 Test Kits.
Marc Schessel, 63, of New Paltz, New York, was CEO of SCWorx Corp during the pandemic.
Court documents show Schessel, caused SCWorx to issue multiple public statements claiming it was buying and reselling at least 48 million COVID-19 test kits, despite knowing that such statements were false and misleading.
The claims were made in April 2020 in the early days of the pandemic.
Specifically, Schessel made, or caused to be issued, four false and misleading statements during a five-day period in April 2020.
These were:
- An April 13 press release
- An April 15 investor conference call
- An April 16 8-K filing with the U.S. Securities and Exchange Commission
- An April 17 press release
The four announcements claimed that SCWorx would be receiving millions of COVID-19 rapid test kits within two weeks.
However, Schessel and SCWorx never acquired a single test kit as part of the announced transaction.
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In the wake of these public announcements, SCWorx’s share price surged, rising by over 400 percent.
It jumped from approximately $2.25 to an intraday high of $14.88.
After SCWorx announced that it was terminating these COVID-19 rapid test kit agreements without having acquired any tests, SCWorx’s share price quickly dropped below its pre-April 13, 2020, announcement price.
The jury convicted Schessel of two counts of securities fraud.
He is scheduled to be sentenced on December 17.
He faces a maximum penalty of 20 years in prison on count one and a maximum penalty of 25 years on count two.
