A Potomac biotech company president was arrested Tuesday for his alleged role in a scheme to defraud investors in CytoDyn Inc., a publicly traded biotechnology company based in Washington State.
Kazem Kazempour, age 69, and Nader Pourhassan, 59, of Oregon, are charged with 14 counts involving conspiracy and schemes to defraud investors through false and misleading information relating to CytoDyn, according to the U.S. Attorney’s Office for Maryland.
Kazempour is the cofounder, president and CEP of Amarex Clinical Research in Germantown. That company managed CytoDyn’s clinical trials. The indictment is connected to CytoDyn’s development of leronlimab, a monoclonal antibody investigation investigational drug that is designed to treat HIV and possibly COVID-19.
The two men allegedly deceived investigators about the drug’s timeline and status in an attempt to artificially inflate and maintain the price of CytoDyn’s stock and attract new investors, according to the U.S. Attorney’s office.
“The indictment alleges that these defendants conspired to defraud investors to line their own pockets,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Investors must be able to rely on the statements of biotech companies about their products. Executives who knowingly mislead investors must be held accountable.”
Added Special Agent in Charge Thomas J. Sobocinski of the FBI Baltimore Field Office, “Financial crimes like securities fraud may not be violent, but they certainly are not victimless. The two individuals charged today capitalized on the hopes of investors and the public in supporting new treatments for ailments that affect people and their families.”
Pourhassan and Kazempour are each charged with one count of conspiracy to commit securities fraud and wire fraud, three counts of securities fraud and two counts of wire fraud related to the HIV BLA scheme. Kazempour is separately charged with one count of making false statements to federal law enforcement agents.
If convicted, Pourhassan and Kazempour each face a maximum penalty of 20 years in prison on each securities fraud and wire fraud count, and five years in prison on the conspiracy count. Kazempour also faces a maximum penalty of five years in prison on the false statement count.
— US Attorney Maryland (@USAO_MD) December 20, 2022