WASHINGTON, July 10 (Reuters) - The former CEO of

healthcare software company SCWorx Corp ( WORX ) was found

guilty of investor fraud for falsely stating the company was

becoming a major supplier of COVID-19 rapid tests early in the

pandemic, the U.S. Justice Department said on Wednesday.

The Justice Department said in a statement that a federal

jury in New Jersey convicted Marc Schessel, 64, of two counts of

securities fraud for public statements by SCWorx ( WORX ) in April 2020,

early in the pandemic, claiming that it was buying and reselling

at least 48 million COVID-19 test kits, despite knowing that the

statements were false. SCWorx ( WORX ) 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.

The Justice Department said that Schessel knew the

Australian supplier did not have regulatory approval for the

COVID test kits and that his company did not have nearly enough

money to pay for them.

In the wake of those public announcements, SCWorx's ( WORX ) share

price rose by over 400%, from approximately $2.25 to an intraday

high of $14.88.

SCWorx ( WORX ) later announced it was terminating these COVID-19

rapid test kit agreements without having acquired any tests and

its share price quickly dropped below its pre-announcement

price, according to prosecutors.

Schessel is scheduled to be sentenced on Dec. 17. He

faces a maximum penalty of 20 years in prison on count one and a

maximum penalty of 25 years on count two, the Justice Department

added.