The Justice Department said a chief executive of a US biotechnology company was sentenced to seven years in jail on Friday for COVID-19 test fraud.

US Biotech Executive Gets 7 Years in Jail for COVID-19 Finger-Prick Blood Test Fraud

According to Reuters, Keith Berman, 70, of Westlake Village, California, falsely promised investors that his Decision Diagnostics company could produce a quick and accurate COVID-19 test.

The Justice Department noted that Berman falsely claimed from February through December 2020 that his firm had developed a blood test via a finger prick method that could detect COVID-19 in 15 seconds, even though no such test existed.

Last December, Berman pleaded guilty to securities fraud, wire fraud, and obstruction of an official proceeding. Investor losses reportedly totaled to around $28 million.

In a statement, Nicole Argentieri, head of the Justice Department's criminal division, said Berman "defrauded investors to profit from the pandemic," which resulted in the US Securities and Exchange Commission suing him and the company in December 2020. 

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How Did the US Biotech Executive Pull off the Scheme to Defraud Investors Into Investing in His Firm

According to the New York Times, prosecutors said Keith Berman sent 12 "false and misleading" press releases describing the rapid COVID-19 test, which his firm called GenViro, between March and April 2020 to convince people to invest in his company.

The prosecutors noted that the stock price of Decision Diagnostics surged by over 1,500 percent during the period. However, the prosecutors said Berman told a friend that the test could not actually detect COVID-19 and accused him of capitalizing on people's fears about the pandemic to revitalize the company's finances.

Berman is the only director of the publicly traded medical device company. According to the court documents, Decision Diagnostics was in financial trouble in 2020 because Berman had spent hundreds of thousands of dollars to maintain an online affair with a webcam model.

Berman allegedly misled investors that the US Food and Drug Administration (FDA) was about to approve his company's request for an emergency use authorization for the COVID-19 test. However, prosecutors said Berman knew his company did not meet the FDA's clinical testing requirements.

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