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NEWARK, July 10 (Reuters) – The former CEO of SCWorx Corp WORX.O, a provider of management software for healthcare providers, was convicted by a federal jury in New Jersey for his role in a scheme to mislead investors about procurement of COVID-19 rapid test kits, the U.S. Justice Department said on Wednesday.

The jury convicted Marc Schessel, 64, of New Paltz, New York, of two counts of securities fraud, the Justice Department said in a statement.

“If we think back to those very early days of the pandemic, the confusion and frustration about testing, the spread of the virus and social distancing had everyone frantically searching for answers,” FBI-Newark Special Agent in Charge James E. Dennehy said. “Schessel witnessed that chaos and chose to capitalize on it – promising a vital resource with rapid COVID tests that never existed.”

The Justice Department said that in early 2020, Schessel caused SCWorx to issue multiple public statements claiming that SCWorx was buying and reselling at least 48 million COVID-19 test kits, despite knowing that the statements were false. SCWorx said it had a binding contract to acquire the rapid COVID test kits from an Australian supplier.

The company and the former CEO had no immediate comment on Wednesday.

“This defendant took advantage of the global COVID pandemic by illegally pumping up the value of SCWorx’s stock by over 400 percent with multiple fraudulent public statements that he had binding contracts to obtain and resell COVID-19 test kits, when in reality the test kits did not have FDA authorization,” said U.S. Attorney Philip R. Sellinger. “When the truth came out, the value of the SCWorx stock crashed, causing investors to suffer substantial losses.”