The U.S. Department of Justice (DOJ) announced in a statement that Keith Berman, the CEO and sole director of Decision Diagnostics, has pleaded guilty to securities fraud, wire fraud, and obstruction of an official proceeding in connection with his scheme to defraud investors by falsely claiming early in the pandemic that his company had developed a rapid blood-based test that could accurately detect COVID-19.
According to the DOJ, Berman told investors that Decision Diagnostics had developed a test that could detect COVID-19 in 15 seconds from a finger prick sample of blood. Berman also claimed that the U.S. Food and Drug Administration (FDA) was on the verge of approving Decision Diagnostic’s application for emergency use authorization (EUA) of this nonexistent COVID-19 test.
The DOJ said that Berman attempted to bolster these claims to investors and discredit any allegations of fraud through a concocted persona on internet message boards; he also used this persona to threaten potential whistleblowers with civil or criminal sanctions.
Furthermore, the DOJ states, Berman used another false online identity to obstruct a U.S. Securities & Exchange Commission (SEC) investigation into his conduct, using this false persona to “surreptitiously direct an investor to write a series of false and threatening letters to the highest levels of SEC management, including the SEC Chairman.”
The DOJ said that prior to the COVID-19 pandemic, both Berman and Decision Diagnostics were in “precarious financial condition”; in internal emails, Berman had written that he needed a “new story” to “raise millions.”
Berman is scheduled to be sentenced on April 12, 2024, and faces a maximum penalty of 20 years in prison.