Jessica Richman was Chief Executive Officer of uBiome, Inc. Zachary Apte was its Chief Scientific Officer, and at times used the title of co-CEO. They founded the San Francisco medical testing company together in October 2012, they were in a relationship throughout, and they married in 2019. During 2018 they raised approximately $60 million in a Series C round that valued uBiome at nearly $600 million, telling investors the company had a proven business model in which doctors ordered its microbiome tests and health insurers reimbursed them. As part of that round, Richman sold about $5 million of her own uBiome shares and Apte sold about $5 million of his. On September 14, 2026, more than five years after being sued and while both remain fugitives from a federal criminal indictment, they agreed to settle with the Securities and Exchange Commission for a $125,000 penalty each.
The proposed final judgments, subject to court approval, permanently enjoin both from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, impose three year officer and director bars, and prohibit them for three years from participating in the issuance, purchase, offer or sale of any security other than for their own personal accounts. When it filed suit in March 2021, the Commission had asked the court for permanent bars and for disgorgement of all ill-gotten gains with prejudgment interest. The settlement contains no disgorgement.
From a $351,193 Crowdfunder to Forbes’ Next Billion Dollar Startup
uBiome began as a citizen science project. In November 2012 it raised $351,193 on Indiegogo against a $100,000 goal, selling swab kits that let people sample their gut, mouth, nose, skin or genitals and compare the results against a growing database. A third founder, Will Ludington, was involved at the outset and left in 2013.
The institutional money followed. In August 2014 the company raised $4.5 million, with $3 million from Andreessen Horowitz and $1.5 million from angel investors. A Series B in November 2016 brought roughly $15.5 million led by 8VC, with Slow Ventures and the Stanford-StartX Fund participating. Y Combinator had mentored and backed the company from early on. By the time of the 2018 Series C, cumulative funding had passed $105 million.
The reputational peak arrived in the same year as the fraud. In 2018 uBiome appeared on Forbes’ Next Billion Dollar Startup list, on the strength of claimed annual revenues of $100 million. That was the figure Richman was emailing to prospective investors, and the figure the SEC says depended on billing practices insurers were already challenging in writing.
The Records That Did Not Exist
The single most damaging allegation in the SEC’s complaint concerns what happened in May 2018, at the start of the Series C offering. Certain insurance companies had asked uBiome to produce supporting medical records showing that doctors had contemporaneously consulted with patients for the tests being billed.
Those records did not exist. According to the complaint, Richman and Apte directed company employees to create and backdate records to make it appear that doctor patient consultations had occurred, and then to submit those fabricated records to the insurers.
That is not an aggressive reading of a billing rule. It is the manufacture of clinical documentation to answer a direct question from the party paying the bills, at the exact moment the founders were raising money on the strength of those payments.
A Doctor Network Designed Not to Involve Doctors
The reimbursement model required a prescribing doctor who had formed a relationship with the patient. uBiome built a website portal connecting doctors to consumers, and according to the SEC it was designed so that the default was for doctors to approve test requests based solely on an online questionnaire the consumer filled in, with no pre-existing relationship, no live consultation and no further interaction.
In July 2017, shortly after the network launched, uBiome’s own general counsel emailed Richman and Apte warning that tests prescribed on questionnaires rather than live consultations would be a reimbursement risk. The complaint says they continued using it anyway and concealed that fact from the general counsel and from uBiome’s board.
The second use of the network was worse. uBiome began billing insurers for retests of consumers’ old samples. In 2017 the company’s own laboratory director warned Richman and Apte that such retests lacked current clinical relevance and could be fraudulent. They directed the company to advertise the retests broadly. To make the requests look like tests on new samples, uBiome resubmitted consumers’ originally reported symptoms to reviewing doctors as though they were newly reported, and at Apte’s direction the written results of the original tests were withheld from those doctors.
Ninety-One Percent
The financial picture Richman gave the lead Series C investor showed that by the first quarter of 2018, nearly 91 percent of uBiome’s revenue came from health insurance reimbursements, with a projection that clinical test billing would reach roughly 97 percent of total revenue by 2020.
The numbers sent to investors were specific. On June 29, 2018 Apte emailed the lead investor, copying Richman, that uBiome had billed 15,351 samples in April at an annualised revenue run rate of $109.2 million, rising to 16,985 samples in May at $121.2 million, that this was 3.4 times the billable samples and revenue of November 2017, and that the company recognised revenue of $594 per sample. In July 2018 Richman emailed prospective investors, copying Apte, claiming revenue growth of almost 900 percent since June 2017 and over $100 million in total revenue for 2018.
Every one of those figures rested on the billing practices described above. The internal target driving them was a goal Richman and Apte set of 10 percent month over month growth in insurance billing volume, adopted specifically ahead of the fundraising round.
They Were Warned, Repeatedly, Including During the Raise
The complaint records a sequence of warnings that went unheeded. The general counsel warned about the questionnaire network in July 2017. The laboratory director warned that retests could be fraudulent in 2017. In August 2018, while the Series C offering was still open, a company employee warned that the billing code practices were potentially fraudulent. Defendants had also been directing the company to use incorrect billing codes and to vary codes between insurers to avoid claim rejections, with no legitimate basis for doing so.
Insurers were pushing back in writing before and during the offering, and one alleged outright that uBiome was engaged in fraud and abuse. None of these challenges were disclosed to Series C investors. They were not disclosed to uBiome’s own board until December 2018, and when Richman finally raised the matter she told the board the company had received only one such challenge. By April 2019 at least 18 insurers had written challenging uBiome’s practices, several seeking clawbacks of money already paid.
Fired, Bankrupt, and Gone
In April 2019 the FBI executed a search warrant at uBiome’s San Francisco headquarters, and the board opened an internal investigation. Roughly two months later both founders were fired. In September 2019 the company ceased operations and filed for bankruptcy protection, a Chapter 11 case that was later converted to Chapter 7 liquidation.
Richman and Apte married in 2019 and relocated to Germany in June 2020. The SEC sued in March 2021 and the U.S. Attorney for the Northern District of California brought a parallel indictment running to dozens of counts, including health care fraud, wire fraud, securities fraud, money laundering and aggravated identity theft. The FBI has treated them as fugitives since 2021. Apte holds German citizenship and Richman is his wife, which makes extradition unlikely. Their lawyers have said Richman’s health prevents her travelling. Prosecutors responded that the fact she may be ill does not justify a plan to evade the court’s jurisdiction over her criminal case forever.
During the SEC’s investigation, both Richman and Apte declined to answer every question on the basis of their Fifth Amendment privilege against self-incrimination.
Four Chief Executives in Six Months
The company did not survive the year. After the April 2019 raid, Richman and Apte were placed on administrative leave and the general counsel, John Rakow, took over as interim chief executive. Rakow resigned roughly two months into the job. Richman and Apte left in July, the SEC complaint stating they were fired approximately two months after the internal investigation began, with contemporaneous reporting describing them as having resigned. Curtis G. Solsvig III then took over as acting chief executive, saying the board had determined uBiome would be better positioned for success under new ownership.
No new ownership materialised. uBiome filed for Chapter 11 in Delaware on September 4, 2019, saying it was in discussion with several interested parties and expected to announce an asset purchase agreement within 75 days. 8VC and Silicon Valley Bank had provided financing to keep it running through the process. That financing was not extended and no buyer emerged. On October 1 the company moved to convert the case, and Judge Laurie S. Silverstein ordered it converted to Chapter 7 liquidation on October 10.
One condition attached to that order is worth recording. Before converting the case, the judge required uBiome to cooperate with a creditor, Puma Biotechnology, so that it could recover samples it needed for a cancer treatment trial. Whatever else was being liquidated, there were patients on the other end of some of the material sitting in the company’s freezers.
The trustee sold what remained, principally patents, intellectual property and research data archives. The creditors included the insurers seeking to claw back reimbursements they had already paid. The proceedings have run for years.
What the Settlement Actually Delivers
Set the 2021 prayer for relief against the 2026 outcome. The Commission asked for permanent injunctions barring them from participating in any securities offering, permanent officer and director bars, disgorgement of all ill-gotten gains with prejudgment interest, and civil penalties.
What it obtained is permanent antifraud injunctions, bars lasting three years rather than permanently, penalties of $125,000 each, and no disgorgement at all. Richman and Apte sold approximately $10 million of their own stock into the round the SEC says was fraudulently promoted. They will pay $250,000 between them, and in 2029 both will be free to serve as officers or directors of public companies again.
There is a practical explanation. A judgment is only worth what can be collected, and these are defendants living beyond the reach of American enforcement, with assets the government has separately tried to seize and a criminal case they have simply declined to attend. A settlement that produces something is arguably better than a judgment that produces nothing. That reasoning is sound and it is also an admission about the limits of the system.
Conclusion
Jessica Richman and Zachary Apte told investors that doctors ordered uBiome’s tests and insurers paid for them. Their own general counsel warned them the doctor network would fail insurer scrutiny, their own laboratory director warned that retesting old samples could be fraudulent, and their own employees warned during the fundraising that the billing codes were potentially fraudulent. When insurers asked for records proving consultations had happened, the SEC says they had employees create and backdate the records. They raised $60 million, sold $10 million of their own shares into it, and were fired within two months of the FBI arriving. The company liquidated. They moved to Germany and have not come back. Five years on, they pay $125,000 each, keep the rest, and can run a public company again in 2029.
