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Federal charges filed in $60 million scheme

On Behalf of | Mar 19, 2021 | Federal Crimes

In Sept. of 2019, UBiome filed for bankruptcy, but the company is making the news again because of fraudulent billing practices. The U.S. Securities and Exchange Commission and federal prosecutors filed federal civil and criminal charges against Zachary Apte and Jessica Richmond. 

Some are comparing this case to the famed Theranos Inc. case, and it’s easy to see why. Theranos, which had a value of $9 billion was much larger than the $600 million UBiome. In both cases, the companies told investors that they were able to perform reliable medical tests. That wasn’t the case for either company, according to prosecutors. 

Did misleading statements lead to charges?

Prosecutors allege that UBiome made misleading statements regarding the reliability of the company’s revenue. The SEC notes that the revenue generation claims were a sham. Instead of having the reliable health insurance reimbursements it claimed, the company was allegedly submitting fraudulent claims for retests. This was based on misleading or partial information. 

From 2015 to 2019, UBiome stock was sold by the founders to enrich themselves and pay for the company’s operations. Prosecutors note that the billing scheme played a primary role in this. It’s alleged that insurers were questioning the billing practices, which led to the falsification of documents. 

Anyone who’s facing white-collar crime charges should ensure that they evaluate their defense options carefully. This can take time when the case is a complex one. Reviewing all the information is imperative, especially if it’s a federal case. Remember that federal prosecutors have vast resources to draw from, so you must work toward having a defense that calls their claims into question.