San Francisco Entrepreneurs Who Founded Poop-Testing Tech Startup Charged With Fraud
A San Francisco couple who founded a startup called uBiome, a company that tests poop, are now facing fraud charges.
A pair of San Francisco entrepreneurs founded a tech startup company called uBiome in 2012 with aspirations of helping people understand the bacteria living in and on their bodies. With the help of investors, the company hit the ground running after raising over $100 million, Business Insider reported.
The concept behind the company was to collect fecal samples from customers in a service called "Gut Explorer" for a low price of less than $100, according to the Department of Justice.
But in April 2019, the FBI began investigating the company and its leadership and in October the company announced it was shutting down after it declared bankruptcy in 2019.
Now, the company's two founders are facing fraud and other criminal charges, according to an announcement made by the Department of Justice last Thursday.
The 33-page indictment announced charges against Zachary Schulz Apte and Jessica Sunshine Richman, which include conspiracy to commit securities fraud, conspiracy to commit health care fraud, money laundering and related offenses in connection to other alleged schemes.
Prosecutors are claiming the couple to have "painted a false picture of uBiome as a rapidly growing company" with a "strong track record of reliable revenue," the U.S. Securities and Exchange Commission wrote in a statement.
The complaint goes on to allege that both Apte, 36, and Richman, 46, were "each enriched by millions" through their fraudulent fundraising requests.
Apte and Richman have not been scheduled for their court appearances as of yet.
This investigation is reminiscent of a recent controversy involving health startup co-founder Elizabeth Holmes, who will soon head to trial for fraud charges related to her now-defunct blood-testing company, Theranos. She denies any wrongdoing.
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