California CEO Pleads Guilty to Securities Fraud in COVID-19 Testing Case

On December 11, the Department of Justice announced a California man, Keith Berman, CEO and sole director of Decision Diagnostics Corp. (DECN), pleaded guilty to securities fraud, wire fraud, and obstruction of an official proceeding. The charges are related to allegations that Berman made false and misleading statements about the development of a blood-based COVID-19 test, resulting in significant financial losses for investors.

DECN, a publicly-traded medical device company, purportedly faced financial difficulties leading up to the COVID-19 pandemic. In internal emails, Berman expressed the need for a “new story” to “raise millions.” These texts laid the foundation for the government to assert a connection between the company’s financial struggles and a motive to commit the charged offenses. According to the DOJ, due to the financial struggles, Berman made false and misleading statements to investors about DECN’s purported development of a groundbreaking 15-second blood-based COVID-19 test. Despite Berman’s claims, the test did not exist.  Berman was also said to have misled investors about the FDA’s imminent approval of DECN’s request for emergency use authorization for the test. Furthermore, the DOJ contends that Berman used a fake online persona to spread misleading statements on internet message boards.

Berman pleaded guilty to one count each of securities fraud, wire fraud, and obstruction of an official proceeding. His sentencing is scheduled for April 12, 2024, and he faces a maximum penalty of 20 years in prison. 

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