Biotech CEO Sentenced for $28M COVID-19 Securities Fraud Scheme and Obstruction of Related Investigation

 

The CEO of a California biotechnology company was sentenced to seven years in prison for a securities fraud scheme that resulted in approximately $28 million in investor losses and obstruction of a related U.S. Securities and Exchange Commission (SEC) investigation.

According to court documents, Keith Berman, 70, of Westlake Village, California, was the CEO and sole director of Decision Diagnostics Corp., a publicly traded medical device company. From February through December 2020, Berman engaged in a scheme to defraud investors by falsely claiming that Decision Diagnostics had developed a 15-second test to detect COVID-19 in a finger prick sample of blood when, in reality, no such test existed. Berman also falsely told investors that the Food and Drug Administration (FDA) was on the verge of approving Decision Diagnostics’ request for emergency use authorization of its purported COVID-19 test. In reality, Berman knew that his company was unwilling and unable to meet the clinical testing required by the FDA but concealed these material facts and misled investors. 

“At the height of the COVID-19 pandemic, Keith Berman gave people false hope that his biotech company had developed a rapid blood test to detect COVID-19. But there was no such test. Berman defrauded investors to profit from the pandemic,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Today’s sentence sends a message that those who attempt to capitalize on fear and desperation to cheat unsuspecting Americans in times of national emergency will be held accountable.”

As part of the scheme, Berman used a fake persona to repeat false and misleading statements to investors on internet message boards, and to lull unsuspecting investors into inaction by refuting allegations of fraud and threatening potential whistleblowers with civil or criminal sanctions. Berman also obstructed an SEC investigation into his conduct, using another false online identity to surreptitiously direct an investor to write a series of false and threatening letters to the highest levels of SEC management, including the SEC Chairman. 

“The defendant, Keith Berman, used the chaos of COVID-19 to not only orchestrate a fraudulent scheme that preyed on investors’ uncertainties, but he also ensnared them in a deceitful web of lies with promises of prosperity, then retaliated against his victims when confronted with his bogus claims, demonstrating his callous disregard for others facing financial ruin at his hands,” said Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group “The U.S. Postal Inspection Service, along with our partners, will continue to bring these predatory criminals to justice.”

“Keith Berman not only misrepresented himself and lied about a phony COVID-19 diagnostic test to entice unsuspecting investors, but he also engaged in threats and obstructed a federal investigation,” said Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division. “This case demonstrates the FBI’s continued commitment to working with our partners to combat fraud and hold perpetrators accountable.”

Berman pleaded guilty on Dec. 7, 2023, to securities fraud, wire fraud, and obstruction of an official proceeding.

USPIS and the FBI investigated the case. 

Trial Attorneys Christopher Fenton, Kate T. McCarthy, and Matthew Reilly of the Criminal Division’s Fraud Section prosecuted the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Attorney General James and Pine Barrens Commission Announce Agreement With Landscaping Supplier for Illegally Destroying Protected Land on Long Island

 

Stephen Affatato and His Company Affa Organics Will Restore the Impacted Area of the Pine Barrens They Destroyed and Pay $100,000 Penalty

Pine Barrens Are Home to Long Island’s Primary Natural Source of Fresh Drinking Water

New York Attorney General Letitia James and the Central Pine Barrens Joint Planning and Policy Commission (Pine Barrens Commission) Executive Director Judith Jakobsen announceda settlement with Stephen Affatato and his company Affa Organics, Inc. (Affa Organics), a landscaping supply business, for illegally removing trees and vegetation from the Pine Barrens, protected land on Long Island. The Pine Barrens are located on top of Long Island’s largest source of drinking water, and their preservation is necessary to ensure residents’ access to clean water. Affatato destroyed acres of this land by bulldozing and excavating soil, cutting down trees, and clearing natural ground cover, harming the Pine Barrens’ delicate ecosystem. As a result of this agreement, Affatato will pay a civil penalty of $100,000, and is required to fully restore the site. Affatato will be required to pay an additional $200,000 if he fails to complete the site restoration.  

“Long Island’s Pine Barrens are among New York’s most precious natural resources, and their protection is paramount to the health of Long Island’s drinking water and our shared environment,” said Attorney General James. “Stephen Affatato ignored the law and destroyed protected land for his own benefit, and now he must repair the damage and restore the area. I want to thank the Pine Barrens Commission for their continued partnership in protecting this critical natural resource on Long Island and ensuring it is preserved for generations to come.”

“One of the most important aspects of our work at the Central Pine Barrens Commission is protecting lands preserved by municipalities with taxpayer dollars so all Suffolk residents as well as visitors can fully appreciate all the region has to offer,” said Pine Barrens Commission Executive Director Jakobsen. “The tremendous efforts of Attorney General James and her office to bring this case to a close demonstrates that she is fully on board with this priority, and for that, we cannot thank her enough.”

The Long Island Central Pine Barrens is a 106,000-acre natural area in Suffolk County that is home to some of New York’s greatest ecological diversity, including many endangered or threatened animal and plant species. In 1993, New York adopted the Long Island Pine Barrens Protection Act, which established the Pine Barrens Commission to safeguard the Pine Barrens and develop and oversee a comprehensive land use plan for the area. This plan designated 55,000 acres of the Pine Barrens as a core preservation area and specified that any entity seeking to engage in development activities such as clearing, excavation, or construction in the area must apply for and receive a waiver from the Pine Barrens Commission.

In October 2012, Affatato and his company, Affa Organics, destroyed conserved property in the Pine Barrens that did not belong to him. Affatato did not obtain a waiver before removing trees, vegetation, and natural ground cover, and excavating and bulldozing soil into huge piles the property. These violations were observed by Pine Barrens Commission staff on a site visit to the property.

This agreement resolves ongoing litigation regarding the clean-up and restoration of the site. As a result of the agreement, Affatato will implement and pay for a complete site restoration plan, including soil excavation, deer fencing, site grading, replanting of native plant species, sediment and erosion control, and monitoring and reporting, among other requirements. Affatato will also pay a civil penalty of $100,000 and provide $200,000 in the form of a bond or other financial security that must be paid if Affatato fails to follow or complete the site restoration plan. 

Attorney General James and Executive Director Jakobsen would like to thank the Town of Brookhaven, which issued a Notice of Violation in 2012 and was instrumental throughout the case.

This matter was handled for the Pine Barrens Commission by Executive Director Judith Jakobsen, Science and Stewardship Program Manager Polly Weigand, and Counsel John Milazzo. 

News from Senator Gustavo Rivera

 

SENATOR RIVERA IN ALBANY 

SENATOR RIVERA JOINS 48 LAWMAKERS IN REJECTING CHANGES TO RENT STABILIZATION PROTECTION

As budget negotiations continue, Senator Rivera joined 48 lawmakers and Housing Justice For All opposing dangerous change to rent stabilization laws in this years budget. Senator Rivera reaffirmed his support for Good Cause Eviction and protecting the 2019 rent regulation reforms which corrected decades of anti-tenant policy

4/15 TO 4/17: GET YOUR IDNYC CARD WITH

SENATOR RIVERA AND COUNCILMEMBER SANCHEZ!

Senator Rivera will host the IDNYC van in collaboration with Councilmember Sanchez's office. Appointments are available:

Monday, April 15th from 10 am - 5 pm 

Tuesday, April 16th from 10 am - 1 pm

Wednesday, April 17 from 10 am - 5 pm

Call our office at 718-933-2034 to make an appointment and learn which documents you will need to bring to apply to get the

SENATOR RIVERA ATTENDS BRONX CB8'S HEALTH AND HOSPITAL COMMITTEE

On Wednesday, Senator Rivera joined Bronx Community Board 8's monthly Health and Hospital Committee meeting to discuss the budget, his role as chair of the health committee, and the New York Health Act. Thank you to Committee Chair Rabbi Bob Kaplan and CB8 Chair Julie Reyes for inviting the Senator to such a lively discussion!

NEW YORK FOCUS: AS FAMILIES IN CRISIS STRUGGLE TO REACH SERVICES, MEDICAID CUTS THREATEN TO MAKE IT WORSE.

“If you don’t provide that coordinated care, those folks are going to wind up in emergency rooms, those folks are going to wind up in nursing homes — which I’ll remind everybody, costs us more,” said State Senator Gustavo Rivera.

Senator Rivera spoke with Eliza Fawcett from New York Focus about the ongoing budget negotiations, including his opposition to the proposed $125 million in cuts from Medicaid Health Homes. New York's Medicaid Health Homes program connects New Yorkers in need with a Care Manager that helps them navigate and develop a care plan. The Health Homes program assists over 170,000 New Yorkers in connecting with health care providers, housing, and food assistance.

APRIL 26TH: VIRTUAL OFFICE HOURS WITH SENATOR RIVERA!

APPLICATION PROCESS OPEN FOR NEW YORK STATE SENATE GRADUATE FELLOWSHIP

Since 1965, the New York State Senate Legislative Fellowship has given graduate and post-graduate students direct access to state government and the legislative process. Selection for a Senate fellowship is competitive. Strong personal initiative and principles are essential for success. Applications from a wide range of interests and disciplines are welcomed and encouraged. Many fellows are today employees of the Senate, the Assembly, the Executive Chamber, or state agencies. Almost all go on to shape public policy in some capacity.

If you are interested in applying, please fill out an application and send via certified mail to:

New York State Senate Office of Student Programs

208 Legislative Office Building

Albany, NY 12247

VISIT THE NY PUBLIC LIBRARY FOR SUPPORT WITH YOUR FINANCIAL AID APPLICATIONS

In partnership with New York City Public Schools, the State University of New York, and the City University of New York, The New York Public Library is offering free drop-in support sessions to students and families who need help with the new process for Free Application for Federal Student Aid (FAFSA) applications.

All students seeking financial aid for college, including grants, scholarships, work-study, and loans, should fill out the FAFSA application.

Bronx Locations (one-on-one assistance, first-come, first-served basis)

• Bronx Library Center: Saturday, Apr 20, 1–3 PM; 310 E Kingsbridge Road
• Woodstock Library: Thursday, Apr 25, 3:30–5 PM; 761 E 160th Street

Come take a deeper dive around NWBCCC's campaign to End Medical Debt at the next NWBCCC Community Meeting on Saturday, May 4th at 11am at Serviam Hall (2848 Bainbridge Ave). Learn how to eliminate medical debt from your credit history and fight individual healthcare denials from insurance companies.

Join NWBCCC's campaign to make medical debt a thing of the past, and healthcare for all a reality. Lunch, childcare, and Spanish interpretation will be provided. Be sure to RSVP here or at info@northwestbronx.org

Team Stringer - Scott needs you on his team

 

New Yorkers deserve better. Eric Adams has led our city down the wrong path. It is time for a new leader. Scott Stringer has spent his career in public service, and he has a proven track record of fighting for New Yorkers. From representing the Upper West Side in the State Assembly to serving as Manhattan’s Borough President and then City Comptroller, Scott has always been a champion for working people. He’s ready to get to work and get our city back on track. So, if you are with us, add your name today to endorse Scott Stringer!

ENDORSE SCOTT

Thank you, Team Stringer

MAYOR ADAMS’ STATEMENT FOLLOWING IRAN’S DRONE ATTACK ON ISRAEL

 

“New York City unequivocally stands with the State of Israel in the face of this direct attack and escalation by Iran. I’ve been briefed on the situation unfolding abroad and we pray for the safety of all in the region. 

 

“As mayor of the largest Jewish population in the world outside of Israel, the significance of this attack for Jewish New Yorkers — many of whom have family in Israel right now — is not lost on me, especially less than 10 days before Passover begins. 

 

“While there is no direct or imminent threat to New York City at this time, we have directed the NYPD to deploy additional resources to Jewish communities and houses of worship citywide out of abundance of caution to ensure that our communities have the resources they need to feel safe. 

 

“Our administration has also begun outreach to both Jewish leaders and elected officials across the five boroughs to keep them apprised of the situation. 

 

“Our intelligence and counterterrorism teams will continue to closely monitor the situation.”

Governor Hochul Urges New Yorkers To Prepare for Enhanced Risk of Severe Thunderstorms With Damaging Winds on Sunday

Areas in Southern Tier and Mid-Hudson Regions, Including Catskills, Could See Heavy Rains and Wind Gusts Up to or Exceeding 70 MPH

Power Outages and Hazardous Travel Likely Starting Sunday Afternoon

Large Hail and Chance of Isolated Tornados May Accompany Any Severe Storms 

Governor Hochul urged New Yorkers to prepare for an enhanced risk of severe thunderstorms with potentially damaging winds on Sunday. A weather system moving across the state Sunday is expected to produce severe thunderstorms with potentially damaging winds in the afternoon, especially for areas in the Southern Tier and Mid-Hudson regions, including the Catskills. Strong winds with gusts up to or more than 70 mph are possible, as well as heavy rain, hail, and the chance of isolated tornados. Power outages and hazardous travel are likely, and damaging winds may occur with any thunderstorms that develops outside of the forecasted areas for severe impacts.

"We're closely monitoring severe thunderstorms and damaging winds that are expected to move across the state and present hazardous travel conditions," Governor Hochul said. "I urge New Yorkers to monitor their local forecasts and take proper precautions as the weather unfolds."

New Yorkers are encouraged to sign up for emergency alerts by subscribing to NY Alert at https://alert.ny.gov, a free service providing critical emergency information to your cell phone or computer. For a complete listing of weather alerts and forecasts, visit the National Weather Service website at https://alerts.weather.gov.       

Safety Tips

Prepare for severe weather:

• Know the county in which you live and the names of nearby cities. Severe weather warnings are issued on a county basis.
• Learn the safest route from your home or business to high, safe ground should you have to leave in a hurry.
• Develop and practice a 'family escape' plan and identify a meeting place if family members become separated.
• Make an itemized list of all valuables including furnishings, clothing and other personal property. Keep the list in a safe place.
• Stockpile emergency supplies of canned food, medicine and first aid supplies and drinking water. Store drinking water in clean, closed containers.
• Plan what to do with your pets.
• Have a portable radio, flashlights, extra batteries and emergency cooking equipment available.
• Keep your automobile fueled. If electric power is cut off, gasoline stations may not be able to pump fuel for several days. Have a small disaster supply kit in the trunk of your car.

Have disaster supplies on hand, including:

• Flashlight and extra batteries
• Battery-operated radio and extra batteries
• First aid kit and manual
• Emergency food and water
• Non-electric can opener
• Essential medicines
• Checkbook, cash, credit cards, ATM cards

For more safety tips, visit the New York State Division of Homeland Security and Emergency Services Safety Tips web page at https://www.dhses.ny.gov/safety.

Bronx Community Board and Precinct Council Appreciation Barbecue by Councilman Rafael Salamanca

 

The Bronx Zoo's Dancing Crane Pavilion was host to Councilman Rafael Salamanca's Bronx Community Board and Precinct Council Appreciation Barbecue Saturday afternoon. The Dancing Crane Pavilion had a spread of food set out for the board and council members from barbecued chicken, hamburgers, and hot dogs, to several varieties of salad topped off with slices of watermelon and various types of beverages.  

Representatives of most Bronx Community Boards and Precinct Councils were on hand to meet each other and have a good time. Councilman Salamanca gave a brief speech thanking those who were in attendance,  as the  music and good time continued. Candidate for Council District 17 in the 2025 City Council election Mr. Freddy Perez Jr. was introduced by Councilman Salamanca as his choice to replace him in the City Council when Councilman Salamanca is term limited out of the City Council January 1, 2026. 

Councilman Rafael Salamanca points to Mr. Freddy Perez the person to replace him in Council District 17 due to term limits. 

Councilman Salamanca chooses a hot dog for his bun, as a community board member picks up a piece of barbecued chicken.

There were few open seats at the Dancing Crane Pavilion for Councilman Rafael Salamanca's Community Board and Precinct Council Apprecitation Barbecue.

Councilman Salamanca speaks to the crowd.

Councilman Salamanca poses with some of the police officers who attended the Barbecue. 

Councilman Salamanca is with Community Board 11 members Staceyann Deleon and Christine Culpepper De Ruiz. 

Council District 17 candidate Freddy Perez Jr. talks with Community Board 2 Chair Robert Crespo.

Two Doctors Sentenced for $4M Fraudulent Urine Drug Testing Scheme

 

The owner and the medical director of a Kentucky pain clinic were sentenced for their respective roles in a scheme that defrauded Medicare, Medicaid, and commercial insurance companies of over $4 million for medically unnecessary urine drug testing.

Dr. William Lawrence Siefert, 70, of Dayton, Ohio, the clinic’s medical director, was sentenced to one year and six months in prison and ordered to pay $1,968,763.10 million in restitution. Dr. Timothy Ehn, 51, of Union, Kentucky, the clinic owner and a licensed chiropractor, was sentenced to two years and six months in prison and ordered to pay $3,773,569.30 million in restitution.

“The defendants enriched themselves through a fraudulent urine drug testing scheme that cost Medicare, Medicaid, and commercial insurance companies over $4 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The Criminal Division is committed to protecting American taxpayers from doctors who abuse their positions to steal public money by billing for unnecessary medical procedures.”

According to court documents and evidence presented at trial, Ehn and Siefert orchestrated a scheme in which clinic staff billed for urine drug tests that were not medically necessary but were lucratively reimbursed by taxpayer-funded insurance providers like Medicare and Medicaid. Ehn and Siefert continued in their scheme even as their expensive drug testing machine malfunctioned because it was not properly maintained, which caused the machine to produce results that falsely suggested patients were testing positive for street drugs like ecstasy or heroin.  Insurance proceeds from urine drug testing ended up comprising three-quarters of the clinic’s revenue.

“These sentences are a testament to the fact that the FBI and our law enforcement partners will not stand by while licensed physicians choose to defraud federally-funded health insurance programs in order to line their own pockets,” said Special Agent in Charge Michael E. Stansbury of the FBI Louisville Field Office. “As a result of a collaborative effort across all levels of government, patients will no longer have to endure unnecessary medical tests and the taxpayer’s money will not be wasted.”

“Together with our federal, state, and local partners, DEA remains steadfast in our commitment to identify and root out health care professionals who fail to live up to their responsibilities and commitments,” said Special Agent in Charge Orville O. Greene of the Drug Enforcement Adminisration (DEA) Detroit Field Division. “These sentences should serve as a warning there is zero tolerance for fraud, no matter what form it takes.”

“Health care providers who cause the submission of Medicare and Medicaid claims for medically unnecessary services pose a significant risk to these programs and the patients who rely on them,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “These sentences exemplify how HHS-OIG works diligently with our law enforcement partners to hold accountable individuals who, to satisfy their own greed, exploit federal health care programs.”

“Through zealous collaboration with our law enforcement partners, we’re holding these defendants accountable,” said Kentucky Attorney General Russell Coleman. “I’m especially proud of Detective Supervisor Mike McGuffey and the entire Attorney General’s Medicaid Fraud and Abuse team for investigating these crimes and delivering justice.”

On March 23, 2023, a federal jury convicted Siefert of health care fraud, and Ehn of health care fraud and conspiracy to commit health care fraud.

The FBI, DEA, HHS-OIG, and Kentucky Medicaid and Abuse Control Unit investigated the case.

Trial Attorneys Dermot Lynch and Lindsey Carson and Assistant Chief Lauren Kootman of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.