SCWorx CEO Lied About COVID Tests, Raked in Millions

NEWARK, N.J. – Greed and desperation fueled a brazen scheme during the height of the COVID-19 pandemic, and today, Marc Schessel, 64, of New Paltz, New York, is facing the consequences. A federal jury found Schessel, the former CEO of publicly traded health care company SCWorx Corp., guilty on two counts of securities fraud. He peddled lies about securing millions of desperately needed COVID-19 rapid test kits, all to inflate his company’s stock price.

Court documents paint a damning picture. Between April 13 and April 17, 2020, Schessel knowingly unleashed a torrent of false and misleading statements. He claimed SCWorx had a binding contract with an Australian supplier for the test kits. The problem? The supplier lacked FDA approval, and SCWorx didn’t have the funds to pay for the order. Despite mounting questions about the deal’s legitimacy, Schessel doubled down, issuing a press release, hosting an investor call, filing an 8-K with the Securities and Exchange Commission, and releasing *another* press release – all based on a phantom contract.

The deception worked, at least for a while. SCWorx’s share price exploded, soaring over 400 percent – from a paltry $2.25 to a high of $14.88. Investors, desperate for solutions in the early days of the pandemic, piled in. But the house of cards quickly crumbled. When SCWorx announced it was terminating the agreements without acquiring a single test kit, the stock price plummeted, leaving investors holding the bag.

“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,” thundered U.S. Attorney Philip R. Sellinger. “When the truth came out, the value of the SCWorx stock crashed, causing investors to suffer substantial losses. Duping investors out of millions of dollars in the middle of a serious health emergency to salvage a failing business is especially egregious.”

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

Marc Schessel now awaits sentencing on December 17, 2024. He faces a maximum penalty of 20 years in prison on count one and 25 years on count two. This case was investigated by the FBI’s Newark Division, with assistance from FINRA. Assistant U.S. Attorneys George Brandley and Angelica Sinopole, along with Principal Assistant Deputy Chief Lucy Jennings, spearheaded the prosecution.