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Medical Device CEO Charged in COVID-19 Test Fraud Scheme

His alleged lies led to millions of dollars in losses.

Keith Berman, 67, is the CEO of Decision Diagnostics, a medical device company based in Westlake Village, CA. On Friday, the Department of Justice announced that a federal grand jury indicted Berman in connection with an alleged scheme to defraud investors. Berman allegedly made false and misleading statements about a new COVID-19 test, which led to millions of dollars in investor losses.

According to the indictment, beginning in February 2020, Berman falsely claimed Decision Diagnostics had developed a 15-second test to detect COVID-19 in a finger prick sample of blood. Berman knew his test was merely a concept and not a validated COVID-19 test, much less an product ready for manufacture. 

Berman also lied when he told investors that the FDA was on the verge of approving emergency use authorization for the company's test. He knew the company lacked the money and insurance necessary to conduct the required clinical testing.

Berman then hired a lobbyist to tell congress members that the FDA "moth-balled" his test, which remained "stuck in limbo." At the same time, he told investors that the test was on the verge of approval, and by April 23, 2020, the company's stock price had risen by more than 1,500 percent.   

The executive also allegedly used the alias "plutoniumimplosion" to repeat false statements to investors on Internet message boards, refute fraud allegations, and threaten potential whistleblowers with civil or criminal sanctions.  

Behind the plutoniumimplosion cloak, he projected demand for the test to be "close to 3 billion [test] kits." In sworn testimony to the SEC, Berman allegedly denied posting on the message board.

Berman faces one count of securities fraud and one count of making false statements, and Decision Diagnostics didn't respond to our request for comment. 

Under the guise of plutoniumimplosion, in an online post, Berman allegedly wrote, "then again the 5-6 message board posters [claiming the DECN test was fraudulent] may be right and Mr. Berman will find himself in prison."

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