Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Friday, March 29, 2024 | Back issues
Courthouse News Service Courthouse News Service

Founders of California Fecal Matter-Testing Company Indicted

Two Silicon Valley entrepreneurs who founded a biotech company that tested fecal matter are accused of bilking their investors and health insurance providers, federal prosecutors said Thursday.

SAN FRANCISCO (AP) — Two Silicon Valley entrepreneurs who founded a biotech company that tested fecal matter are accused of bilking their investors and health insurance providers, federal prosecutors said Thursday.

Zachary Schulz Apte and Jessica Sunshine Richman, co-founders of now-bankrupt microbiome testing company uBiome, 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."

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.

Categories / Business, Criminal, Health, Science, Securities, Technology

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...