Co-founders of biotech startup uBiome charged with fraud
New York: U.S. prosecutors on Thursday charged the co-founders of uBiome Inc, a San Francisco biotechnology startup, with defrauding investors about its ability to expand clinical tests to monitor gut health and obtain reimbursements from insurers.
Zachary Apte and Jessica Richman were accused of raising more than $76 million in two fundraising rounds while misleading investors about uBiome's revenue growth and reimbursement rates, the medical community's lack of acceptance for its tests, and their reliance on a "captive" group of doctors for testing.
Apte, 36, and Richman, 46, each face more than 40 criminal counts including healthcare, securities and wire fraud, with maximum penalties totaling several hundred years in prison, the U.S. Department of Justice said. The Securities and Exchange Commission filed related civil charges.
Lawyers for the defendants did not immediately respond to requests for comment.
Thursday's charges follow uBiome's Sept. 2019 bankruptcy filing and subsequent closure. The FBI had raided uBiome's headquarters the previous April.
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