There was gold in them thar hills of poop, or so the startup uBiome claimed.
The Security and Exchange Commission on Thursday charged the founders of uBiome, a bankrupt San Francisco-based company best known for its "gut explorer" home fecal sample kits and a 2012 crowdfunding campaign to (allegedly) map the human biome, with defrauding investors. This news follows the April 2019 FBI raid of uBiome's office, and comes at the same time as criminal charges from the Department of Justice.
According to the SEC complaint, Jessica Richman, uBiome's CEO, and Zachary Apte, uBiome's chief scientific officer, lied about the financial strength of the company, and claimed it was "inventing the microbiome industry" and "making products that improve people’s lives."
The truth, as the SEC complaint alleges, was a little sloppier.
"uBiome's purported success in generating revenue, however, was a sham," reads the complaint. "It depended on duping doctors into ordering unnecessary tests and other improper practices that Richman and Apte directed and which, once discovered, led insurers to claw back their previous reimbursement payments to uBiome."
Richman and Apte stand accused of making millions off of this alleged fraud, which the SEC is now attempting to get back (plus civil penalties).
The Department of Justice, on the other hard, has something else in mind — charging the two with conspiracy to commit securities fraud, conspiracy to commit health care fraud, and money laundering, among other charges.
As the DOJ press release makes clear (see the below helpful graphic), there is some serious potential jail time associated with these charges.
This is quite the fall from grace for Richman and Apte who raised over $100 million from investors over the course of uBiome's existence.
But perhaps skepticism was always in order. In 2018, Gwyneth Paltrow's problematic lifestyle brand Goop named Richman as one of its "Innovators" in the The Greater goop Awards. Notably, she has since been pulled from the site's webpage, but a copy of the announcement was archived by the Wayback Machine.
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"We're in the middle of what doctors are calling a microbiome revolution," read Goop's now-deleted announcement. "And Jessica Richman, PhD, is at the forefront of it."
It seems that revolution still has a way to go. Either way, no one should be surprised that an empire built on shit has had such a messy collapse.
Topics Health
