SF poop-testing startup, once compared to Theranos, charged in $60M fraud scheme

A married pair of San Francisco entrepreneurs were indicted Thursday on multiple federal charges, the latest twist in the saga of a once trendy, now bankrupt fecal matter-testing startup.

Zachary Schulz Apte and Jessica Sunshine Richman, co-founders of defunct microbiome testing company uBiome, are accused of bilking their investors and health insurance providers, federal prosecutors said. They were indicted Thursday on multiple federal charges, including conspiracy to commit securities fraud, conspiracy to commit health care fraud and money laundering.

Their court appearances have not been scheduled, and it was not immediately clear if they had attorneys who could speak on their behalf.

Apte, 36, and Richman, 46, founded uBiome in 2012 as a direct-to-consumer service called “Gut Explorer.” Customers would submit a fecal sample that the company analyzed in a laboratory, comparing the consumer's microbiome to others' microbiomes, prosecutors said. The service cost less than $100 initially.

The company grew to include “clinical” tests of gut and vaginal microbiomes, which were aimed to be used by medical providers so uBiome could seek up to $3,000 in reimbursements from health insurance companies. The federal indictment states that uBiome sought upwards of $300 million in reimbursement claims from private and public health insurers between 2015 and 2019. The company was ultimately paid more than $35 million for tests that “were not validated and not medically necessary."

Apte and Richman met in San Francisco in 2012 through the California Institute for Quantitative Biosciences Garage, an incubator used by UCSF. Together, they founded uBiome and received funding from Silicon Valley investors like 8VC in San Francisco and Andreessen Horowitz in Menlo Park, which hold 22% and 10% stakes in uBiome, respectively, according to court documents.

For a time, they were the latest up-and-coming business determined to disrupt the medical testing industry. In 2018, Richman was even named an "innovator" winner in Goop's "The Greater goop Awards" and at its peak, uBiome was valued at $600 million.

Apte and Richman married in 2019, the year their startup began its death spiral. In May, the FBI raided their San Francisco offices and uBiome suspended all testing and put the pair on administrative leave. In October 2019, just a month after filing for bankruptcy, the company went into liquidation and shut down.

Much like the high-profile collapse of Elizabeth Holmes' Theranos blood-testing business, prosecutors allege Apte and Richman assured investors their medical tests were reliable when, in fact, they weren't. The couple "painted a false picture of uBiome as a rapidly growing company with a strong track record of reliable revenue through health insurance reimbursements for its tests. UBiome’s purported success in generating revenue, however, was a sham," the SEC wrote in a complaint.

The defendants are also accused of falsifying documents, lying and concealing facts about their billing model when asked by insurance providers, as well as misleading and defrauding their investors.


 
There really isnt much of a reason to test gut micro biome. You will know if you have issues and it's easier to just buy Visbiome and take it than make some "personalized" micro biome. There is even scientific research backing Visbiome and they don't hide their bacterial mix.
A common thread with these seems to be the reliance on some scientific truth as the foundation of lies. The Goop approval was just confirmation this was geared toward ignorant upper middle class and higher women who are easily sold narcissistic bullshit by the celebrities they worship.

The same kind of people who would've lined up to buy a Theranos machine would also have bought a Juicero.
 
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Ngl, I was initially thinking that this was about that shit tracking app that's just for SF, but now that I know that it's still viable I can be glad SF remains such a massive shithole where that app is still viable
 
Doctors were relying on their bullshit tests too.
If you ever had a blood test that consisted of them pretty much just pricking your ring finger, you had a Theranos test.
I assume that is not the same as when they do it for a glucose test?
 
I assume that is not the same as when they do it for a glucose test?
Yeah. Theranos blood tests were full spectrum. They were supposed to show everything. Which is retarded because it takes a lot more blood than that to get anything resembling an accurate reading for a lot of micronutrients.
 
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It's not just naive. It's that Holmes was so charismatic (despite trying to be a literal Steve Jobs clone) anyone that disagreed with her was removed, either from the company or just people's good graces in general.

Coldfusion had a great video on the topic.

I came out of the video feeling that the success was very related to Social Justice with having a female ceo and ties to the Obama administration.
 
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There are half a dozen of these poop testing startups. I've always wondered if they're just modern astrology.
 
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