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Above, Hays County Judge Ruben Becerra holds the county's original COVID-19 emergency declaration during a press conference on March 15. Daily Record photo by Nick Castillo

County Judge under attorney general investigation for courting COVID-19 test company

Friday, September 25, 2020

Hays County Judge Ruben Becerra and county Chief of Staff Alex Villalobos are currently under investigation by the Texas Attorney General’s Criminal Prosecution Division and the Texas Rangers after they allegedly courted a business relationship with a single vendor for COVID-19 tests in early 2020. 

The tests were not authorized by the U.S. Food and Drug Administration for their intended use and were brought forward outside the usual bidding process; the commissioners never put out a request for vendor proposals to purchase COVID-19 tests, or presented alternative quotes. 

The allegations being investigated include that Becerra discussed or disclosed information about county budgeting or emergency management needs with MRG Medical, a company seeking to sell COVID-19 test kits to numerous Texas counties, and that he used county resources and possibly county funds for campaign purposes and for courting a business relationship with MRG Medical. Potential Texas Penal Code Violations discussed in documents provided by the Texas Attorney General's Office include misuse of official information, theft and misapplication of fiduciary property. 

The attorney general’s office and Texas Rangers are also investigating allegations that Villalobos abused his official capacity, misused official information and interfered with public duties when he acted in concert with Becerra to authorize an alleged employee of MDBox — a partner company of MRG Medical —  to conduct “quick tests” on Hays County Police, Fire and EMS, for which the employee was later arrested. 

The arrest report from the incident states Villalobos was contacted and said that he had no knowledge of who the alleged MDBox employee was, the program or what he was doing. 

Despite records from the Attorney General’s Office stating there are active investigations related to courting MRG, Becerra told the Daily Record Friday, “MDBox and MRG has nothing to do with the AGs inquiry.”

Obtained by the San Marcos Daily Record

The investigation also includes allegations that Becerra may have committed other offenses unrelated to COVID-19 tests including abuse of official capacity, official oppression, tampering with a government record and two election code violations. Other allegations state that Villalobos may have committed official oppression as well.

“I am unaware of my involvement in any Investigation involving the Attorney General’s Office,” Villalobos said. “I have not been contacted by any one from the Attorney General’s Office regarding any investigation I may be currently involved in.”

Obtained by the San Marcos Daily Record

Hays County and MRG Medical have said no tests were purchased, but the partner company Reliant Immune Diagnostics wrote in a letter to the U.S. House of Representatives Committee on Oversight and Reform on April 7 that they had sold tests to Hays County.

The letter was in response to the committee’s request for information about their test kits and conflicting information about whether or not the tests were intended for in-home use.

In emails obtained by the Daily Record, Becerra attempted to allow an FDA exemption for in-home testing in Hays County when no in-home tests had been approved, cleared or authorized by the FDA, and tried to convince a federal agency to release 50,000 tests from Customs and Border Protections that were being held. MRG Medical, MDBox, Reliant Immune Diagnostics and Anyplace MD used the Emergency Use Authorization and the letter to CBP all written on Hays County letterhead to market themselves to other Texas counties as the self-designated Hays County COVID-19 Response Team.

Reliant Immune Diagnostics CEO and Founder Dr. Henry Legere created the telehealth platform MDBox. They merged with AnyPlace MD, CEO Shane Stevens. 

According to a media representative for AnyPlace MD, there was no formalized relationship between Hays County and Reliant Immune Diagnostics. In a statement made on April 14, they had discussions about selling tests to the county and or providing tests in conjunction with their telehealth drive through testing model. Emails and meetings dated prior to April 1 stated the original intention was to conduct testing in-home. 

According to Kyle Hayungs, founder and CEO of MRG Medical, 49% of his company was going to be bought by MDBox. He said he lost half a million dollars and $4 million in Reliant Immune Diagnostics stocks when the deal fell through after trying to work with Hays County soured the relationship. He said MRG’s relationship with AnyPlace MD no longer exists and that there was never a partnership between MRG Medical and Hays County; they were simply proposing public private partnerships.

Becerra has described Hayungs as a “serial exaggerator and self promoter.” “He has never had any deal with Hays County, doesn't represent, speak for or have the confidence of myself or the court,” Becerra told the Daily Record Friday. “It seems unlikely the court would ever vote to approve any contact with him. I will continue to vigorously seek out ways to address our indigent health care needs and cost savings.”

Hayungs and Becerra both communicated well-meaning intentions for being proactive in a crisis to get COVID-19 tests and supplies delivered to Hays County as soon as possible, at a time when the county did not have many tests or supplies available. 

Hays County Epidemiologist Eric Schneider explained in open court that the Hays County Local Health Department does not conduct COVID-19 tests and it had contracts with CPL Labs and Premier ER for that purpose. He also explained that the type of test referenced, serology tests, would be useful in the future to detect who has immunity, but at the beginning of a pandemic response are, “pretty useless as far as determining who is actually infected.”

While Hayungs refutes the claim that there was a formal partnership with Hays County, there was a coordinated press release, a press conference, email threads, acknowledgments of legitimacy and coordination of work to bring the tests to Hays County.

Although no approval was given in commissioners court to purchase tests or services from this company in April, Hayungs returned to court four months later on Aug. 11 and Becerra directed the public health department to set a meeting with him saying, "Let's see if we can make it a fit.”

Hayungs appears to have a relationship with Becerra dating back to 2018, and with Villalobos dating back to 2019, according to social media photos. Hayung said he met Becerra in 2018 at a party in Austin and connected over a shared vision of helping residents access healthcare more easily.

A records request revealed that the relationship between Hayungs and Villalobos also included shared Google documents labled “alex villalobos’ campaign” and “Operational preparedness coronavirus plan_2”. 

On March 23, prior to company correspondence with FDA about utilizing the test, and prior to any known knowledge of additional Hays County officals or the commissioners, Becerra advocated on behalf of this company, writing a letter to Customs and Border Protection on Hays County letterhead asking for the immediate release and expediting of supplies related to COVID-19, including 50,000 tests stating that MRG Medical Group and MDBox had been advising Hays County and surrounding cities on COVID-19.

Scott Reynolds, manager of Robert F. Barnes Customs Broker, said there wasn’t much of a reason for an elected official to request release of imports because the process for releasing items happens in a matter of minutes with the aid of technology. Reynolds said it has been mandated that all COVID-19 supplies are already given priority for release, but that supplies that aren’t cleared by the FDA would be held for investigation and might delay the process.

“It is the importer's responsibility to comply with all laws and regulations that govern the importation of that process,” Reynolds said. “But if they are not in compliance then they have no business trying to get it through customs. If it's not approved by the FDA, they best not even try. It could subject them to penalties, seizure of goods, I would be surprised if an elected official would want to put his neck on the chopping block to be in representation if that shipment is in violation.”

An FDA spokesperson said during the pandemic all commercial shipments with FDA-regulated products are screened and reviewed to ensure imported products have either been granted an Emergency Use Authorization or fall under policies in an FDA guidance document. During COVID-19, there has been an influx of importers sending shipments without proper documentation submitted to Customs and Border Protection which may hold up shipments while the importer gather important documentation

The supplies were later announced to be available for Hays County and to be released by the FDA on March 26, according AnyPlace MD Vice President Debbie Woods in an email obtained by the Daily Record. 

AnyPlace MD used that letter to customs and an EUA on Hays County letterhead to market themselves to Harris County, saying Hays County had approved the proposal, they launched Covidtaskforce.org and would be “going live” April 1, although the website no longer exists.

Reliant Immune Diagnostic’s Dr. Henry Legere said in an email pitch to Harris County Public Health, “We are the (Federal Emergency Management Agency) designated Covid response team for Hays County and will soon likely also be for many other governmental jurisdictions including the state of Baja, Mexico. We are attaching our letters from the FEMA director of Hays County, Judge Ruben Becerra, and the letter he drafted to customs for us as well.”

On March 26, when this email was sent, still, there had been no FDA clearance and additional Hays County officials were unaware of this work. The FDA does not intend to object to development and distribution of diagnostic test kits for up to 15 days prior to submitting an EUA for a validated test. This policy does not, however, apply to tests for in-home collection. 

“At this time the FDA has not approved, cleared, or authorized any serology (also referred to as antibody) tests for at-home use,” said an FDA spokesperson.

The FDA received MDBox's Chief Operating Officer Dr. Amy Altman's notification on March 27 that they would be using the Guangzhou Wondfo Biotech Co., Ltd. SARS-CoV-2 Antibody Test, following the proper policy for using serology tests on the FDA list. Within an hour, the FDA responded again and said they needed to complete an EUA application and clinical study if they would be using the test for in-home collection. 

In Legere’s letter to the U.S. House of Representatives committee on April 7, he neglected to include this second email from the FDA, claiming that these tests were never intended for at-home use and they followed the correct protocol.

Before receiving this notice, Legere was pitching the “basically in-home test” from MDBox to Harris County Public Health in a Zoom meeting. In-home tests were not cleared by the FDA, but Legere told Harris County that it could use a local Emergency Use Authorization waiver from the county's FEMA Director in a method similar to what the company was trying to use in Hays County. 

“Our idea is if we can get a Harris County waiver, we can provide you with care kits the same way we are doing in Hays County,” Legere said. “What we did in Hays County is we got the public health officers there and the FEMA director to issue an FDA waiver for in-home use … If we want to put it directly into the hands of patients then we need that FDA waiver. And the county public health officers can issue that. During an emergency so can the FEMA director.”

FEMA wrote to the Daily Record that the agency does not have the authority to issue medical emergency use authorizations. They also said while they liaise frequently with government at all levels, someone working for the county would not be a FEMA employee.

Altman said they began the clinical trial and submitted the pre-EUA, but MDBox moved forward with marketing the in-home test, including a press release and press conference that occurred on March 30. This was the first time the Hays County Local Health Department or any of the commissioners had heard about the mentioned partnership, although Hayungs posted about a partnership, pictured with Becerra, Villalobos, and University of Texas at Austin Dell Medical School officials on Feb. 19, six weeks prior.

The usage of Becerra’s letters for marketing went beyond Harris County. In a pitch to the Capital Area Council of Governments (CAPCOG), MRG Medical’s employee Beau Bedford claimed they had relationships with 25,000 grocery stores and major retailers including Walmart, H-E-B and Target where the in-home kits could be picked up. He also identified themselves as the FEMA-designated Covid response team for Hays County and “soon likely also be for Harris, Bexar, Uvalde, Williamson and Travis Counties. We are attaching our letters from the FEMA director of Hays County, Judge Ruben Becerra, and the letter he drafted to customs for us as well.” 

In explanation of this release, Hayungs referred to Bedford as an overzealous sales representative.

CAPCOG’s Director Martin Ritchey forwarded the message to Villalobos asking if MRG was legitimate referencing the pitch from Bedford. Villalobos said they were.

County officials were kept in the dark, including former Public Information Officer Laureen Chernow, who warned local government entities and media outlets about a fraudulent press release about the partnership that stated the company was “Hays County's COVID-19 response team"; the document was edited by Villalobos and passed through Becerra's inbox, although he has since stated that he did not see all the emails and was not sure why he had been cc'd.

The press release from the “COVID Task Force” announced the formation of the Covid Task Force Initiative and the 50,000 in-home tests to be brought to Hays County, sold and distributed online through H-E-B. One of the two distributed versions read, “The test availability is a result of Hays County Judge and Director of Emergency Management Ruben Becerra lifting the FDA ban to release the test.” Altman later told the Daily Record in an interview that was the reason they could be used in Hays County. 

The press release and the press conference advertised tests that would be supervised virtually at home but would not be administered by medical professionals. A resident could pay $50 for a telehealth visit from the MDBox telehealth app. The company does not take insurance but does take payments from HSA Bank Accounts to be screened by a physician. If the physician thought the patient needed a test, they could order one with a special code from H-E-B, according to the press release and the press conference. At the time it was said that the testing process would then be completed at home. MRG Digital Marketing Director Trey Martinez later said in an email that test kits were not available at H-E-B.

The language calling the tests "in-home" was greatly disputed in discussions in commissioners court meetings, but it is clear from Altman’s notification to the FDA and the press conference that the test was originally intended to be conducted at home. 

The press release and a Facebook post from Becerra announced securing 2,000 COVID-19 test kits and hiring Reliant Immune Diagnostics and MDBox.com to conduct a community health needs analysis and risk assessment. It read, “MDBox will provide in-home tests for COVID19, Strep, Flu and UTI with the intention of allowing everyone in Hays County to test for COVID19 and other, more common ailments without having to leave home.”

Hayungs has said “in-home” was a typo that they have since corrected. However, Hayungs, Becerra and Villalobos received an email prior to the press conference on March 29, from an MDBox employee commenting on the press release saying, “I am very concerned about saying anything about ‘in home’ tests. My understanding is that these tests are clinical use only - they are not cleared for in-home use. I believe that this would be a major red flag for the FDA.” Both versions of the release went out describing testing without having to leave the comfort of home.

Additionally, at the press conference, Becerra explained the process for getting a code to order a test from HEB.com, “FDA cleared, medical professionals reaching into your home working with you through all the process and when they see the time is right for testing they will issue you a code that will give you the right to buy a test and then continue the process. It is the farthest thing from an ‘at home test’ besides geography.” 

Video footage of the press conference online has since been deleted along with Becerra’s Facebook post.

Legere also said in his Zoom pitch to Harris County that the tests were FDA approved for a clinical setting and that the EUA waiver would be necessary for in-home use. 

One day after the press conference, Becerra announced in the March 31 commissioners court meeting that 2,000 COVID-19 tests would be available through an agreement with Reliant Immune Diagnostic’s telemedicine application MDBox. Becerra received an invoice of $39,000 for 2,000 tests on March 25.

Altman told the Daily Record the first 2,000 tests were being delivered directly to Becerra and the Hays County Local Health Department to distribute at his discretion, which was determined to be for first responders.

In an April 14 interview, Becerra said he simply secured the 2,000 tests and it would be up to the commissioners to approve the purchase. He said he was scouring the earth for tests and wasn’t going to talk about options until they were real. 

Becerra said at-home test kits had been a point of confusion. He specified it was telemedicine, just like most doctors offices had been doing. “I have not been interested in those home test kits,” Becerra said. 

He also said in the commissioners court meeting on April 14, “In-home testing is nothing that I was in communication supporting in any way. This is not in-home testing.”

However the Emergency Use Authorization written on Hays County letterhead on March 24 read, “This letter is to express the immediate allowance of an FDA exemption and Emergency Use Authorization (“EUA”) for Reliant Immune Diagnostics, Inc. to provide in-home diagnostic tests for Strep, Flu, Urinary Tract Infections, and Covid-19 in the context of a machine vision telemedicine solution to ensure patient outcome monitoring.” 

The EUA was never released by the county but has been seen in marketing materials to Harris County Public Health and described in a Search Warrant Affidavit describing the arrest of an alleged MDBox employee, Paul Gullo, by Kyle Police Department’s Officer Matthew Leathers. 

Gullo was arrested on April 3 for deceptive business practices at a Kyle hotel wearing an MDBox hat, claiming to have been sent to Kyle by Becerra and Villalobos to conduct “quick-tests” on first responders. He claimed to have had dinner with Villalobos the night prior and had his business card.

After the March 30 press conference, the dialogue shifted to organizing a drive-through testing event where medical providers would conduct the tests if the agreement with Hays County was finalized. At the time, the test was not objected to being used in a clinical setting by the FDA.

However, due to marketing and media coverage from the false announcement, including an article by the San Marcos Daily Record, some residents proceeded with downloading the telemedicine app to be screened for needing a COVID-19 test, when there was no drive-through test site available to receive tests.

A story by KVUE said Hays County resident Linda Krolczyk was charged $49.99 to be screened by the MDBox app and instead of getting a test, was emailed that there was not a citizen-use plan of distribution for COVID-19 test kit.

Contrary to Krolczyk’s experience, Legere stated in a pitch, “Everybody is invited to log in. All of that algorithmic screening is free. The tests are the only thing we want reimbursement for.”

She was refunded on April 1 and Legere stated the announcement was premature. 

Becerra’s second mention of a partnership with MDBox to Hays County’s emergency management team after the commissioners court meeting was in an elected official phone call to discuss COVID-19 on April 1, where Becerra claimed 3,000 people had asked for tests. 

He vouched for the test’s accuracy and said, “I’m not interested in picking winners and losers, if there are more we should promote them all.”

San Marcos’ Emergency Management Coordinator Rachel Ingle said on that call, “I cannot find anything where they have received an EUA … The test kits from this company only have a 95% accuracy rate. Our local medical professionals aren't going to be on board with giving to first responders because of its accuracy. The biggest thing there is having that emergency use authorization.”

Hayungs explained the test did not need an EUA because it was on the FDA’s list of serology tests that it would not object to. The policy was only valid for testing in a clinical setting.

Hays County EMS Medical Directors wrote a letter to the commissioners court on April 6 outlining their concerns with the MDBox tests. 

These concerns materialized in the United Kingdom when half a million of the same tests — the Guangzhou Wondfo Biotech Co., Ltd. SARS-CoV-2 Antibody Test — were sent to gather dust in storage after they spent $20 million on the test and found it to be insufficiently accurate by a laboratory at Oxford University, according to The New York Times. 

India canceled orders for more than half a million of the tests also over accuracy concerns saying they had wide variation in their sensitivity, according to NPR. 

These press releases and emails announcing the partnership with Hays County culminating in the elected officials phone call where Becerra pitched the faulty test created concern for several commissioners and the county's Office of General Counsel, worrying that any deliberation may have violated the Open Meetings Act, considering there was a quorum of commissioners present with all four in attendance.

General Counsel Mark Kennedy initially advised the court members to attend and listen but not participate in deliberation. After listening to a recording of one of the calls, Kennedy realized the extent to which the county judge was running the meetings and advised the commissioners not to attend the meetings, concerned that the subject matter and representations being made would likely tempt a commissioner to interject and deliberate.

On the April 1 call, Commissioner Pct. 4 Walt Smith announced he was hanging up due to concerns they might violate the Open Meetings Act and recommended his colleagues do the same. Smith later shared concerns regarding Becerra’s actions to obtain COVID-19 tests through MDBox. 

“From claiming to be the ‘Hays County designated Covid Response Team’ to the claiming the availability of in-home tests, it's obvious that the facts don’t support the company's claims unless there have been commitments to the Judge or his staff of which no one else in the county is aware,” Smith said. 

Since then Hayungs pitched a community needs assessment for $4,500 MDBox to the Commissioners Court Aug. 11 and has offered to sponsor the program himself. 

That contract for these services labeled “Community Health Needs Assessment for Hays County Proposal” between Becerra, MRG Medical and MDBox first appeared on the dais in the April 14 commissioners court meeting.

MDBox has presented in commissioners court twice prior and sent the judge's office proposals for other work like the community needs assessment and disposal of contaminated bodies. 

The attorney general’s investigation into Becerra and Villalobos extends beyond COVID-19 tests. It includes several other allegations including one regarding official oppression in an incident when Becerra and Villalobos interviewed two female Caucasian county employees about their jobs. During the interview, both women were told they do not appear to “fit the demographic we are looking for,” according to a letter from the Attorney General’s Office. 

There are also allegations that Becerra abused his official capacity by having emergency lights placed on his personal vehicle by county employees on county time at county expense. 

Additionally there are allegations that Becerra tampered with government records on two occasions: once unilaterally changing a commissioners court agenda and the second that a campaign finance report was submitted with knowingly false information. 

Assistant Attorney General Nick A. Moutos, who wrote the April 10 letter to Texas Rangers Maj. Corey Lain regarding the investigation into Becerra and Villalobos, was fired in early September after questionable social media posts regarding Black Lives Matter protesters and comparing Islam to a “virus” were discovered.

Despite Moutos' firing, the Office of the Attorney General and the Texas Rangers have stated these criminal allegations are under active investigation.

This story has been updated since its first publication. 

San Marcos Record

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