A former CEO from Connecticut is indicted for misguiding investors regarding COVID-19 rapid test kits.
According to a May 31 Department of Justice news release, Marc Schessel, 62, of Greenwich, was convicted of securities fraud on two counts. Schessel allegedly took part in a scheme to defraud investors of the publicly traded health care company's purchase of rapid COVID-19 test kits in the early days of the pandemic.
“As alleged in the indictment, Marc Schessel exploited the scarcity of COVID-19 tests at the outset of the pandemic to defraud investors and artificially increase his company’s stock price,” U.S. Attorney Philip R. Sellinger said, according to the release. “His alleged fraud cost investors millions of dollars in losses.”
The release states Schessel issued several statements to the public that his company was purchasing and selling a minimum of 48 million COVID-19 test kits even though he knew it was false. He then went ahead with a supply agreement with an Australian company to purchase two million test kits a week for six months.
Schessel then received a purchase order for two million test kits per week from a U.S.-based company, according to the release. Although Schessel learned the Australian company may not have the kits to sell to Schessel, he still went ahead and issued a news release confirming the purchase order of 48 million rapid test kits.
After his public announcement, Schessel’s company share prices skyrocketed, increasing by more than 400% from approximately $2.25 per share to an intraday high of $14.88 per share, according to the release. Schessel’s deceptions cost investors to lose at least $116 million.
“Schessel allegedly took advantage of the COVID-19 crisis as an opportunity to scam investors and manipulate the market,” Deputy Attorney General Kenneth A. Polite Jr. said, according to the release. "Today’s indictment reinforces our commitment to rooting out schemes that have exploited the pandemic and holding accountable those who have prioritized greed during an unprecedented public health emergency.”
“It is a different type of profiteer who tries to benefit from a national disaster such as a weather event or a pandemic,” FBI Acting Special Agent in Charge Michael Messenger said in the release. “This defendant allegedly took advantage of the public’s angst and panic over a deadly virus and put forward false information to drive up his bottom line. The FBI is committed to fighting fraud and protecting the public at all times, but especially when our country is in the midst of a crisis.”
According to the release, Schessel faces a maximum of 20 years in prison for the first count and a maximum of 25 years in prison for the second count. His first day in court was scheduled for June 7.
