The attorney for former Theranos CEO Elizabeth Holmes asked to postpone the trial date until April 2021, citing concerns about the coronavirus. Melissa Francis from FOX Business with more.
Federal prosecutors on Thursday accused the co-founders of uBiome Inc, a San Francisco biotech startup, of defrauding investors about their 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 rounds of fundraising, while misleading investors about uBiome’s revenue growth and reimbursement rates, the medical community’s lack of acceptance for their tests and their dependence on a “captive” group of doctors per test.
SEC SUES CALIFORNIA TRADER FOR ALLEGED SOCIAL MEDIA FRAUD
Apte, 36, and Richman, 46, each face more than 40 criminal cases, including health, securities and electronic fraud, with maximum sentences totaling several hundred years in prison, the United States Department of Justice said. The Securities and Exchange Commission has filed related civil suits.
The defendants’ lawyers did not immediately respond to requests for comment.
Thursday’s charges follow uBiome’s bankruptcy filing in September 2019 and its subsequent closure. The FBI had broken into uBiome’s headquarters the previous April.
Founded in 2012, uBiome’s businesses have focused on testing microbiomes, located in the intestine and other parts of the body, through tests such as Gut Explorer, SmartGut and SmartJane.
GET FOX BUSINESS ON THE MOVE BY CLICKING HERE
Customers could buy direct mail kits, collect samples at home, complete surveys and get results online in a few weeks.
According to prosecutors, many tests have not been validated clinically or medically necessary, and the defendants’ fraudulent practices included gift cards for patients who returned the samples.
Prosecutors said the fraud occurred from late 2015 to early 2019, with Richman trying to pique the interest of the press by pretending to be younger than her.
READ MORE ABOUT FOX BUSINESS BY CLICKING HERE
The defendants “closed their eyes to compliance and sought at all costs a path designed to bring the biggest investment in their company,” said state attorney Stephanie Hinds in San Francisco.
Hinds’ office is also suing Theranos Inc founder Elizabeth Holmes, who has pleaded not guilty to defrauding investors and patients, claiming that her startup could conduct a wide variety of medical tests with a few drops of blood.