On December 15, 2020, the CEO of Decision Diagnostics, Inc. (“DECN”) was indicted by a federal grand jury in connection with an alleged scheme to defraud investors by making false and misleading statements about the purported development of a new COVID-19 test, allegedly leading to millions of dollars in investor losses.
The indictment alleges that Keith Berman falsely claimed to investors that DECN had developed a 15-second test to detect COVID-19 in a finger prick sample of blood, and that the test would be ready by the summer of 2020. In truth, Berman knew his test was merely an idea and not a validated method of accurately detecting COVID-19, much less an actual product ready for manufacture and sale. Allegedly, Berman and DECN were in precarious financial condition in the lead up to the pandemic, and Berman wrote in internal emails that he needed a “new story” to “raise millions.”
The indictment further alleges that Berman falsely told investors that the FDA was on the verge of approving DECN’s request for emergency use authorization of its new COVID-19 test. In truth, Berman knew that the company lacked the financial resources and insurance necessary to conduct the clinical testing required by the FDA to complete the application process.