A federal grand jury in Maryland indicted two biotech CEOs for defrauding investors in CytoDyn, a company developing leronlimab, a drug for treating HIV.

The court documents alleged that former CytoDyn president and CEO Nader Pourhassen — and Amarex Clinical Research co-founder, president and CEO Kazem Kazempour — sought to defraud investors with “false and misleading representations” about leronlimab and its submissions to the Food and Drug Administration. Amarex worked with CytoDyn in managing its clinical trials.

Pourhassen claimed leronlimab was a potentially effective treatment for not only HIV, but also cancer and COVID-19, without having any evidence to back up the claims. Their goal, the court documents posit, was to mislead investors about the price of CytoDyn’s stock.

“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,” Thomas Sobocinski, special agent in charge at the FBI Baltimore Field Office, said in a statement.

The documents alleged that in April 2020, Pourhassan told Kazempour and Amarex to submit an incomplete biologics license application (BLA) despite missing publicized timelines in order to tell investors it had been submitted. It’s alleged that they then misrepresented that the BLA had been “complete” when submitted in a press release. Pourhassan then sold millions of dollars of CytoDyn stock based on that information.

“The indictment alleges that these defendants conspired to defraud investors in order to line their own pockets,” U.S. Attorney for the District of Maryland Erek Barron said in a statement. “Investors must be able to rely on the statements of biotech companies about their products. Executives who knowingly mislead investors must be held accountable.”

The saga involving Pourhassan was a long one, however, as Pourhassan also allegedly made misleading claims about leronlimab’s ability to be a possible treatment for COVID-19 starting in 2020. He pushed several questionable PR campaigns despite the fact that the drug didn’t achieve any endpoints that could make it a candidate for that purpose.

In January 2022, CytoDyn fired Pourhassan from his position as CEO after the dubious PR campaign attracted attention from both the Securities and Exchange Commission and the Department of Justice.

A month later, the FDA released a rare warning letter to the company over a promotional video that touted leronlimab’s ability to treat COVID-19. The video, which has since been taken down from YouTube, gave the appearance of being a news report that featured Pourhassan.

Pourhassan and Kazempour are each charged with one count of conspiracy to commit securities fraud and wire fraud. They’re also charged with three counts of securities fraud and two counts of wire fraud linked to the BLA submission, as well as other counts. All together, the charges may result in both facing decades in prison.