Before the COVID-19 pandemic hit, California medical device company Decision Diagnostics (DECN) was in trouble. Keith Berman, the 70-year-old CEO of the manufacturer of low-cost home testing devices and test strips, said his company needed a "new story."
According to internal emails, he said the company needed a new narrative to "raise millions." So, he got creative, a little too creative and from February to December 2020, Berman went on a "publicity blitz," falsely claiming his company developed a 15-second test to detect COVID-19 with a finger prick sample of blood. As investors bought into the GenViro! COVID-19 Screen, Berman knew the blood-based test never existed.
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Berman also told investors the FDA was on the verge of approving emergency use authorization despite first-hand knowledge that his company couldn't meet the clinical testing requirements. According to the DOJ, the company was unwilling and unable to meet the requirements.
The CEO even created a fake persona to repeat false and misleading statements to investors on internet message boards and lull unsuspecting investors into inaction by refuting fraud allegations and threatening potential whistleblowers.
Berman also obstructed an SEC investigation by creating another fake identity to convince an investor to write a series of false and threatening letters to the highest levels of SEC management, including the SEC Chairman.
Last week, Berman pleaded guilty to securities fraud, wire fraud and obstruction of an official proceeding. He is set to be sentenced on April 12, 2024, and faces up to 20 years in prison. He also faces several lawsuits from investors.
Finally, despite publicly claiming he didn't take a salary, Berman allegedly spent hundreds of thousands of dollars of company money on personal expenditures.