Former Biotech CEO Sentenced to 7 Years in Prison for Covid-19 Test Fraud
Keith Berman, the former chief executive of a biotechnology company, has been sentenced to seven years in prison for securities fraud after falsely claiming to have invented a blood test that could detect Covid-19 in just 15 seconds. Berman, 70, engaged in a scheme to defraud investors by promoting the test through his company, Decision Diagnostics Corporation, during the early days of the pandemic.
Prosecutors revealed that Berman issued false and misleading news releases about the rapid Covid test, causing Decision Diagnostics’ stock price to soar by over 1,500 percent. In reality, Berman had privately admitted to a friend that the test could not actually detect Covid-19.
The scheme resulted in approximately $28 million in investor losses, with Berman pleading guilty to securities fraud, wire fraud, and obstruction of an official proceeding. Prosecutors accused him of capitalizing on people’s fears about the pandemic to boost his company’s fortunes.
Despite Berman’s lawyer arguing for a lesser sentence, federal prosecutors pushed for a 10-year prison term, labeling him as a “cruel and callous criminal” who gave false hope to investors. Berman’s reputation and business have been destroyed, with his chances of returning to his previous life now nonexistent.
The case serves as a cautionary tale about the consequences of fraudulent claims during a public health crisis, highlighting the importance of transparency and accountability in the biotechnology industry.
