Replies to post #185288 on Arrayit Corporation (ARYC)

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236T568 ? Thursday, 05/23/19 11:55:09 PMRe: StockDetective post# 152630?0Post #  of 170582 

Oops, fraud lawsuit against Arrayit Corporation (ARYC)



IRA DANIEL TOKAYER, ESQ. (IT-4734)
Attorney for Plaintiffs
405 Lexington Avenue, 7 Floor th
New York, New York 10174
[phone]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------x
REUBEN TAUB, IRWIN L. ZALCBERG : 15 Civ. 01366 (ALC)
and IRWIN ZALCBERG PROFIT SHARING
PLAN, :

Plaintiffs,
:
- against - :


COMPLAINT

ARRAYIT CORPORATION, RENE SCHENA, :
MARK SCHENA and TODD MARTINSKY,
:
Defendants.
:
-----------------------------------x
Plaintiffs, Reuben Taub, Irwin L. Zalcberg and the
Irwin Zalcberg Profit Sharing Plan, by their attorney, Ira Daniel
Tokayer, Esq., as and for their Complaint herein, allege as
follows:
THE PARTIES
1. Plaintiff Reuben Taub (“Taub”) is an individual
residing in New York, New York.

2. Plaintiff Irwin L. Zalcberg (“Zalcberg”) is an
individual residing in Chicago, Illinois.

3. Plaintiff Irwin Zalcberg Profit Sharing Plan (the
“Plan”) is a trust created under § 401 of the Internal Revenue
Code. Zalcberg is the Plan’s trustee and sole beneficiary.

Case 1:15-cv-01366-ALC-JLC Document 11 Filed 03/31/15 Page 1 of 13
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4. Upon information and belief, defendant Arrayit
Corporation (“Arrayit”) is a corporation organized and existing
under the laws of the State of Nevada with its principal place of
business in Sunnyvale, California. It is a publicly traded
company which trades under the stock symbol ARYC and, upon
information and belief, conducts business both nationally and
internationally.

5. Upon information and belief, defendant Rene Schena
(“Rene”) is an individual who resides in Sunnyvale, California,
is Chief Executive Officer of Arrayit and Chairman of Arrayit’s
Board of Directors.

6. Upon information and belief, defendant Mark Schena
(“Mark”) is an individual who resides in Sunnyvale, California,
is President of Arrayit and a member of Arrayit’s Board of
Directors. Rene and Mark are married to each other.

7. Upon information and belief, defendant Todd
Martinsky (“Todd”) is an individual who resides in Sunnyvale,
California, is Chief Technology Officer of Arrayit and a member
of Arrayit’s Board of Directors. Todd is Rene’s brother.

8. This action was commenced in the Supreme Court of
the State of New York, County of New York, and was removed by
defendants to this Court pursuant to 28 U.S.C. § 1332(a) on the
ground that the matter in controversy exceeds the sum or value of
Case 1:15-cv-01366-ALC-JLC Document 11 Filed 03/31/15 Page 2 of 13
-3-
$75,000, exclusive of interest and costs, and is between citizens
of different States.

PLAINTIFFS’ INVESTMENT IN ARRAYIT
9. Upon information and belief, Arrayit is a life
sciences technologies company involved in developing microarray
technology, including diagnostic microarrays for the detection of
food pathogens in meat, fish, produce and other foods (the “Food
Safety Testing Products”) and treatable diseases states such as
pre-symptomatic ovarian cancer (“OvaDX”), among other products.
10. In the period approximately October 2013 through
November 2013, Taub invested approximately $900,000 in Arrayit
through a private placement offering and the open market.
11. In the period approximately May 2013 through
January 2014, Zalcberg and the Plan invested approximately
$1,000,000 in Arrayit through a private placement offering and
the open market.

DEFENDANTS’ OMISSIONS AND MISREPRESENTATIONS

12. Upon information and belief, defendants have
engaged in gross mismanagement, tax fraud and misfeasance in
connection with the operation of Arrayit.

13. Upon information and belief, from in or about
2005, Arrayit has failed to issue W-2s or 1099s to employees.

14. Upon information and belief, from in or about
2005, Arrayit has failed to remit to the United States Treasury
Case 1:15-cv-01366-ALC-JLC Document 11 Filed 03/31/15 Page 3 of 13
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payroll taxes withheld from Arrayit employees and instead held
those funds for Arrayit’s use.

15. Upon information and belief, Arrayit’s failure to
pay the United States Treasury the funds withheld from Arrayit
employees constitutes wage theft and tax fraud.

16. Upon information and belief, board members such as
defendants who knew of these actions or learned of them but
failed to remedy them can be personally liable for 100% of the
tax liability and can face criminal prosecution, fines and
imprisonment.

17. Upon information and belief, defendants’ knowledge
of and/or failure to remedy Arrayit’s failure to issue W-2s or
1099s and/or remit payroll taxes has endangered the viability of
Arrayit.

18. Defendants did not disclose to Taub, Zalcberg or
the Plan Arrayit’s failure to properly issue W-2s or 1099s and/or
remit payroll taxes withheld from Arrayit employees.

19. In or about 2013, when Taub, Zalcberg and the Plan
invested in Arrayit, they were not aware of Arrayit’s failure to
properly issue W-2s or 1099s and/or remit payroll taxes withheld
from Arrayit employees.

20. In conference calls and in writing during the
period June or July 2013 to January 2014, to induce investment in
Arrayit, Mark and Rene repeatedly misrepresented to Taub,
Case 1:15-cv-01366-ALC-JLC Document 11 Filed 03/31/15 Page 4 of 13
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Zalcberg and the Plan that Arrayit owned 100% of the intellectual
property and all rights relating to OvaDX except for sales and
marketing rights which they were negotiating to re-acquire from
Avant Diagnostics Inc. (“Avant”) for a minimal amount of money.

21. In addition, in conference calls from June or July
2013 to January 2014, and an Executive Summary received by Taub,
Zalcberg and the Plan no later than approximately October 17,
2013, to induce investment in Arrayit, defendants misrepresented
that Arrayit’s estimated costs to develop OvaDX was $1,000,000,
later clarified to be $500,000, instead of Arrayit’s true
estimate for such costs of $2.1 to $3.1 million.

22. Furthermore, in a Private Placement Memorandum
received by Taub, Zalcberg and the Plan no later than on or about
October 17, 2013, to induce investment in Arrayit, defendants
misrepresented that the expected uses of the proceeds of the
private placement offering were for operating expenses when in
fact such proceeds were used to pay down prior debt.

23. At the time Taub, Zalcberg and the Plan invested
in Arrayit, they were not aware of Arrayit’s true interest in
OvaDX, Arrayit’s true estimated development costs for OvaDX and
Arrayit’s intent to misuse the proceeds of the private placement
offering.

24. Taub has suffered realized losses of over $360,000
in connection with his investment in Arrayit. Moreover, Taub
Case 1:15-cv-01366-ALC-JLC Document 11 Filed 03/31/15 Page 5 of 13
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still owns 1,000,000 shares and 1,000,000 warrants that have
substantially decreased in value since they were acquired.
25. Zalcberg and the Plan have suffered realized
losses of over $500,000 in connection with their investment in
Arrayit.
.
.
.
.
.
.
.
.
.
Dated: New York, New York
March 30, 2015
_____________/s/__________________
IRA DANIEL TOKAYER, ESQ. (IT-4734)
Attorney for Plaintiffs
405 Lexington Avenue, 7 Floor th
New York, New York 10174
[phone]