45°
Marc Schessel, 62, of Greenwich, CT, had his company, SCWorx Corps, make bogus public claims that it was buying and selling at least 48 million COVID test kits that it never received, an indictment returned in U.S. District Court in Newark alleges.
"The claims share price surged, rising by over 400 percent from approximately $2.25 per share to an intraday high of $14.88. per share," according to a release issued Tuesday by U.S. Attorney for New Jersey Philip R. Sellinger and Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
"As a result of this scheme, investors lost at least $116 million," they said.
Schessel executed a supply agreement with an Australian company in early April 2020 to obtain two million COVID-19 test kits per week for six months, beginning on April 24, 2020, the release issued by Sellinger and Polite says.
The agreement "was based on the Australian company’s representations that it had the appropriate permissions from the U.S. Food and Drug Administration (FDA) and was already distributing COVID-19 tests," it says.
"Contemporaneously, Schessel received a purchase order from a U.S.-based company that planned to purchase the weekly shipments of 2 million COVID-19 test kits from Schessel’s health care company," Sellinger and Polite added.
They continued:
"Despite learning new information on April 11, 2020, that called into question whether the Australian company had COVID-19 tests to sell to Schessel’s company that could be distributed in the United States, Schessel caused his company to issue a press release on April 13, 2020, in which it announced the purchase order for 48 million COVID-19 rapid test kits.
"Following this press release, Schessel received additional information that further called into question his company’s arrangements for the COVID-19 test kits.
"Despite learning facts that cast significant doubt on the status of the COVID-19 test kit deals, Schessel repeatedly confirmed the status and terms of those arrangements on numerous occasions between April 13, 2020, and April 17, 2020.
"In the wake of the April 13 announcement, the health care company’s share price surged, rising by over 400 percent from approximately $2.25 per share to an intraday high of $14.88. per share."
All told, investors lost at least $116 million, they said.
“It is a different type of profiteer who tries to benefit from a national disaster such as a weather event or a pandemic,” FBI Acting Special Agent in Charge Michael Messenger said.
Schessel "took advantage of the public’s angst and panic over a deadly virus and put forward false information to drive up his bottom line," Messenger said.
A judge on Tuesday allowed Schessel to remain free pending a first federal court appearance on securities fraud charges on June 7.
Sellinger and Polite credited special agents of the FBI with the investigation leading to the charges.
Handling the case for the government are Assistant U.S. Attorneys Sean Sherman and Lauren Repole of Sellinger's office, and Acting Principal Assistant Chief Justin Weitz and Trial Attorneys Lucy Jennings and Spencer Ryan of the Criminal Division’s Fraud Section.
Click here to follow Daily Voice Ridgefield Park-Hasbrouck Heights and receive free news updates.
