The founders of medical testing company uBiome Inc. were criminally charged with a $60 million fraud in an alleged scheme that reads like a smaller-scale, lower-profile version of the spectacular collapse of Theranos Inc., Bloomberg News reported. Criminal and civil cases were filed yesterday in San Francisco federal court against Jessica Richman and Zachary Apte by federal prosecutors and the U.S. Securities and Exchange Commission. The company sold products that allowed consumers and patients to analyze the DNA of their own microbiomes from fecal samples. Ubiome filed for bankruptcy in September 2019, about four months after the Federal Bureau of Investigation began investing its billing practices. Among its creditors were high-profile venture capital firms 8VC and Andreessen Horowitz. The cases echo the criminal charges pending against Theranos Inc. founder Elizabeth Holmes and her onetime boyfriend and former Theranos President Ramesh Balwani, although uBiome in one series of fundraising was valued at $600 million, compared with $9 billion for Theranos at its height. Both sets of defendants are charged with telling investors their companies could perform reliable medical tests when, according to prosecutors, they couldn’t. Also similar to Holmes and Balwani, Richman and Apte worked closely together and were romantically involved.
