NEWARK, N.J. – The former CEO of SCWorx Corp. (SCWorx), Marc Schessel, was convicted today on two counts of securities fraud. A federal jury found Schessel guilty of misleading investors about the procurement of COVID-19 rapid test kits in the early days of the pandemic.

Court documents and trial evidence revealed that Schessel, 64, of New Paltz, New York, caused SCWorx to issue four false and misleading public statements. These statements claimed that SCWorx had a binding contract with an Australian supplier for millions of COVID-19 test kits. Schessel was aware that the supplier lacked FDA approval for the test kits and that SCWorx lacked sufficient funds to pay for them.

Despite this, Schessel made false statements in an April 13, 2020, press release, an April 15, 2020, investor conference call, an April 16, 2020, 8-K filing with the SEC, and an April 17, 2020, press release. These statements were made even as investors questioned their accuracy and the legitimacy of the contract. Ultimately, SCWorx did not obtain any test kits from the supposed transaction.

Following these announcements, SCWorx’s share price surged over 400%, from approximately $2.25 to an intraday high of $14.88. When SCWorx announced the termination of the agreements without acquiring any tests, the share price fell below its pre-April 13 level.

U.S. Attorney Philip R. Sellinger commented, “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 a binding contract to obtain COVID-19 test kits, when in reality the test kits did not have FDA authorization. When the truth came out, the value of the SCWorx stock crashed, causing investors to suffer substantial losses.”

FBI Newark Special Agent in Charge James E. Dennehy added, “Schessel witnessed the chaos of the early pandemic and chose to capitalize on it, promising a vital resource with rapid COVID tests that never existed. FBI Newark and our partners are methodically investigating and bringing to justice those who believe they can escape unscathed.”

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