Former Biotech CEO Sentenced to 7 Years in Prison for Covid-19 Test Fraud
Keith Berman, the former chief executive of a biotechnology company, has been sentenced to seven years in prison for securities fraud after falsely claiming to have invented a blood test that could detect Covid-19 in just 15 seconds.
During the early days of the pandemic, Berman engaged in a scheme to defraud people into investing in his company, Decision Diagnostics Corporation, by promoting a rapid Covid test called GenViro. Prosecutors revealed that Berman had privately admitted to a friend that the test could not actually detect Covid-19.
The false claims led to a significant increase in Decision Diagnostics’ stock price, resulting in about $28 million in investor losses. Berman pleaded guilty to securities fraud, wire fraud, and obstruction of an official proceeding in December 2023.
Prosecutors accused Berman of capitalizing on people’s fears about the pandemic to revive his company’s fortunes. They also revealed that Berman had spent company funds on an online relationship with a webcam model, contributing to Decision Diagnostics’ financial troubles.
Despite his lawyer’s plea for a lighter sentence, federal prosecutors had requested a 10-year prison term for Berman, calling him “a cruel and callous criminal” who gave false hope to investors.
In a statement, Michael D. Nordwall, assistant director of the F.B.I.’s criminal investigative division, condemned Berman’s actions, stating that he not only misrepresented himself but also obstructed a federal investigation.
Berman’s lawyer acknowledged his client’s mistakes but emphasized his efforts to develop a rapid Covid-19 blood test. However, Berman’s reputation has been tarnished, his business destroyed, and his chances of returning to his previous life are slim at 70 years old with significant medical issues and a felony conviction.
The case serves as a cautionary tale about the consequences of fraudulent behavior, especially during times of crisis like the Covid-19 pandemic.
