Ontario man guilty of allergy testing fraud in U.S. was key employee of DNA lab in paternity controversy

An Ontario man currently in a U.S. jail awaiting sentencing for running a fraudulent allergy testing company was also a key employee in a Canadian DNA laboratory that a CBC News investigation found has a history of producing wrong paternity results.

Kyle Tsui, 41, pleaded guilty in January to mail and wire fraud before the U.S. Federal Court for the Southern District of New York.

Arrested in Spain and extradited last November to the U.S., Tsui made millions of dollars offering allergy testing through hair samples that he ultimately tossed in the garbage without analyzing, court records show. His company was called The Allergy Testing Company.

The criminal investigation, led by the U.S. Postal Inspection Service, focused on a period between September 2018 and April 2019. During that time, Tsui worked as a senior manager for Toronto-based Viaguard Accu-Metrics, according to internal records from the DNA laboratory obtained by CBC News.

A CBC News investigation recently uncovered a years-long pattern of erroneous results by Viaguard's non-invasive prenatal paternity testing. Viaguard also used different online companies, under names such as Prenatal Paternities Inc. and Paternity Depot, to sell the testing service it offered.

The laboratory sold the tests from about 2010 until 2021.

CBC News interviewed several former Viaguard employees and dozens of its customers from across Canada, the U.S., the U.K. and Australia. The laboratory provided wrong prenatal paternity test results in each of their cases.

Harvey Tenenbaum, Viaguard's owner, recently told a CBC News producer posing as a potential customer that he knew the laboratory's prenatal paternity tests couldn't be trusted.

Responsible for Viaguard sample collection

A Viaguard employee flowchart, created in September 2018 and updated in November 2018, listed Tsui under the title "quality manager." He reported directly to Tenenbaum, according to the document, which was obtained by CBC News.

The chart shows Tsui was responsible for overseeing employees handling sample collection from Viaguard customers.

WATCH | Viaguard customers swap stories of conflicting paternity tests:

Conflicting paternity results from Viaguard anger customer

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After North Bay resident Corale Mayer received conflicting prenatal paternity tests from Viagaurd, she found others with similar stories.

The chart was part of a Canadian Federal Court case filed by Viaguard against the Standards Council of Canada (SCC). Viaguard tried and failed to reverse the SCC's 2017 decision to strip the laboratory of its accreditation over unauthorized use of the federal agency's logo.

Tenenbaum, who still owns and runs Viaguard, said in an emailed statement to CBC that his laboratory "had no involvement" with any of Tsui's activities that gave rise to the "legal proceedings."

He would not say when Tsui left his employ.

"Mr. Tsui's privacy rights preclude me from commenting on any matter concerning his past employment with Viaguard," said Tenenbaum in the statement.

It appears that Tsui worked for Viaguard from as early as 2014 until at least 2020.

Tried to recruit for Sixties Scoop lawsuit

Tsui appeared on television representing Viaguard in 2014 when news emerged that the laboratory had found a genetic link between former prime minister John Diefenbaker and George Dryden, his suspected illegitimate son.

Dryden died in 2016. CBC News found no evidence to cast doubt on those DNA test results.

The CBC News investigation found that Viaguard knowingly sold prenatal paternity testing services that could not be trusted to provide accurate results.

Corale Mayer, 22, conducted two prenatal paternity tests with Viaguard in 2020. One test identified the wrong biological father and the other ruled out the actual dad.

She provided a 2020 phone recording involving Tsui to CBC News. On the recording, Tsui agreed to refund the $800 cost of the wrong test to Mayer.

CBC News previously reported on Tsui's involvement with Tenenbaum in attempts between 2016 and 2017 to recruit victims of the Motherisk Drug Testing Laboratory scandal at Toronto's Hospital for Sick Children and First Nations victims of the Sixties Scoop for class-action lawsuits. Neither of the lawsuits ever came to fruition.

Moved millions to Canadian bank account

The U.S. criminal investigation found that while employed with Viaguard, Tsui reaped millions of dollars in profit running the Allergy Testing Company, which corporate and property records show was headquartered at a family home owned by Tsui.

U.S. authorities say Tsui made about $5.9 million US in sales over eight months by defrauding at least 88,000 people.

Tsui rented a mailbox at an outlet in Hyde Park, N.Y., where his online company received 4,500 pieces of mail weekly, containing mostly hair samples, between September 2018 and February 2019.

The price of his tests ranged from $26 to $79 US.

"The samples were … discarded at my direction and false test results were provided to customers," said Tsui, according to a transcript of his Jan. 23 plea hearing before Justice Judith McCarthy.

Tsui moved $3.6 million from a U.S. bank account to a Canadian bank account via wire transfer in March 2019, shortly after he was contacted by the U.S. Postal Inspection Service.

"Mr. Tsui deeply regrets his criminal conduct and is in the process of doing as much as he can to rectify his actions, including paying full restitution to his victims before his sentencing," said his New York City lawyer Jeffrey Lichtman.

Tsui has agreed to pay $3.6 million US, court records show. He's scheduled for sentencing in May.