77. The Pioneer (uBiome)
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Speaker 1 Support for swindled comes from Simply Safe.
Speaker 4 For the longest time, I thought home security meant an alarm going off after someone broke in.
Speaker 5 But if the alarm is already blaring, it's too late.
Speaker 9 The damage is done.
Speaker 11 That's a reactive approach, and it leaves you with that awful feeling of violation, even if the intruder runs away.
Speaker 2 That's why I switched to Simply Safe.
Speaker 5 They've completely changed the game with Active Guard outdoor protection.
Speaker 14 designed to stop crime before it starts.
Speaker 15 Their smart, AI-powered cameras don't just detect motion.
Speaker 5 They can tell you when there's a person lurking on your property.
Speaker 4 That instantly alerts SimplySafe's professional monitoring agents in real time.
Speaker 12 And here's the game changer. The agents can actually intervene while the intruder is still outside.
Speaker 16 Talk to them through two-way audio, hit them with a loud siren and spotlight.
Speaker 17 and call 911 if needed.
Speaker 18 It's proactive security, and that's real security.
Speaker 2 I trust SimplySafe because there are no long-term contracts, no hidden fees, and a 60-day money-back guarantee. They've been named best home security systems by U.S.
Speaker 2 News and World Report for five years in a row, and I can see why. Get 50% off your new SimplySafe system at simplysafe.com/slash swindled.
Speaker 2 That's 50% off your new SimplySafe system by visiting simplysafe.com/slash swindled. There's no safe like SimplySafe.
Speaker 22
Charlie Sheen is an icon of decadence. I lit the fuse and my life turns into everything it wasn't supposed to be.
He's going the distance. He was the highest paid TV star of all time.
Speaker 22
When it started to change, it was quick. He kept saying, no, no, no, I'm in the hospital now, but next week I'll be ready for the show.
Now, Charlie's sober. He's going to tell you the truth.
Speaker 22
How do I present this with any class? I think we're past that, Charlie. We're past that, yeah.
Somebody call action.
Speaker 22 Aka Charlie Sheen, only on Netflix, September 10th.
Speaker 25 This episode of Swindled may contain graphic descriptions or audio recordings of disturbing events which may not be suitable for all audiences. Listener discretion is advised.
Speaker 26 The pirates are out to get you.
Speaker 27 Don't let them brand you with their mark.
Speaker 27 Piracy funds organized crime and will destroy our film and video industry.
Speaker 27 Piracy costs jobs and will destroy our music and publishing industry.
Speaker 28 Piracy funds terrorism and will destroy our development and your future enjoyment.
Speaker 15 Don't touch the hot stuff.
Speaker 27 Call is copyright.
Speaker 30 There was a plague upon us at the end of the 20th century.
Speaker 18 Widespread music piracy.
Speaker 31 It's true.
Speaker 34 The adoption and facilitation of peer-to-peer file sharing networks had enabled every every deviant with an internet connection and a CD burner to become a music mogul, Khalid Satari included.
Speaker 37 Khalid Satari is an ambitious man from Abu Dhabi.
Speaker 39 He immigrated to the U.S.
Speaker 40 in the mid-90s to attend the University of Tennessee.
Speaker 29 For extra cash, Satari sold illegal mixtapes out of his dorm room, mostly R ⁇ B and hip-hop compilations. even though Khalid Satari personally didn't care for the stuff.
Speaker 43 But that's where the money was at.
Speaker 29 So that's where Satari went.
Speaker 35 He moved to Atlanta after graduating to turn his hobby into a career.
Speaker 44 He would pay popular local DJs to appear on his records. Another DJ Rock production, they would say.
Speaker 46 That's what Khalid had dubbed himself.
Speaker 48 DJ Rock's bootlegged mixtapes became so popular that other bootleggers started bootlegging it to undercut the originator.
Speaker 26 Demand far outweighed supply.
Speaker 51 So Khalid DJ Rock Satari expanded his operation and began experimenting with large-scale duplication.
Speaker 46 He hired crews of Mexicans to work around the clock burning disc and printing packaging.
Speaker 35 DJ Rock had moved on from selling mixes to selling replicas of platinum-selling titles.
Speaker 29 They would photocopy the inserts and sell the counterfeits in bootleg storefronts, swap meets, and flea markets.
Speaker 35 Cash money, no limit.
Speaker 10 Five bucks apiece.
Speaker 47 By 1999, Rock Enterprises was operating multiple duplication plants, some at strip mall offices, others at friends' houses.
Speaker 43 The operation was pumping out tens of thousands of CDs every month.
Speaker 55 While Metallica was suing its fans, Khalid Satari was rigging in millions.
Speaker 46 Who said the music industry was dead?
Speaker 20 To be fair, Khalid did have his fair share of losses too.
Speaker 58 The cops found one of his duplication plants in Cobb County, Georgia, on October 31st, 2000.
Speaker 43 Approximately 57,000 counterfeit CDs were seized, along with tens of thousands of dollars worth of equipment.
Speaker 57 Khalid Satari was slapped with a felony, but served little time.
Speaker 55 Within weeks, he replaced the raided facility in Cobb County with another across town.
Speaker 10 His operation continued to grow.
Speaker 54 By 2001, Satari was managing at least nine duplication plants that produced up to 20,000 discs a day.
Speaker 47 But the feds were closing in.
Speaker 21 They'd been watching Khalid Satari for years.
Speaker 29 However, it would be those closest to the counterfeit king that would bring him down.
Speaker 64 Pamela Harris, Khalid Satari's former secretary and mistress, gave federal investigators incriminating evidence about Rock Enterprise's bootlegging business and told them Satari would wire the profits to bank accounts in the United Arab Emirates, Egypt, and Israel.
Speaker 54 A source told Vibe magazine that Pamela Harris decided to snitch on Khalid after he dumped her because his wife had walked in on them having sex.
Speaker 50 A classic mistake, but not the only one.
Speaker 33 The FBI also discovered that Marco Romera, one of Khalid Satari's most trusted allies, had committed real estate fraud.
Speaker 67 To avoid charges, Romera agreed to wear a wire to record Khalid talking about the illegal business.
Speaker 26 During a year and a half of surveillance, Khalid discussed almost every detail of the operation.
Speaker 45 He was also recorded saying that he would flee to the UAE when he sensed things getting a bit too dicey.
Speaker 33 Federal authorities pounced.
Speaker 55 A warrant was issued for Khalid Satari's arrest on October 24th, 2003.
Speaker 45 He was arrested four days later without incident.
Speaker 30 Prosecutors alleged that Satari had created an illegal market with a gross retail value of $50 million.
Speaker 30 They'd found his warehouses where more than 3 million CDs had been manufactured since 1999.
Speaker 55 But the authorities never found Khalid Satari's money.
Speaker 43 In April 2008, Khalid Satari was released from prison.
Speaker 18 He had spent more than three years behind bars on piracy charges and account of conspiracy to defraud the United States.
Speaker 72 The federal government attempted to deport him, but could not find a country that was willing to accept him.
Speaker 33 So Khalid Satari remained in Georgia and used his hidden funds to launch his next scheme.
Speaker 41 In 2009, Khalid Satari opened a pain management clinic in Commerce, Georgia.
Speaker 47 He opened a urinalysis lab called Confirmatrix in Lawrenceville, Georgia, a few years later.
Speaker 42 Then he purchased a medical billing business called New Medical.
Speaker 55 Satari would pay kickbacks to pill mill doctors to have their patients urine tested at his facilities.
Speaker 52 He then overbilled the cost for unnecessary sampling to federal and state Medicare and Medicaid programs.
Speaker 66 Khalid Satari had created a vertically integrated medical fraud scheme, which allowed him to own multiple million-dollar homes, expensive cars, and jewelry, most of which had been purchased using his teenage son's name.
Speaker 69 Still, Khalid wanted more.
Speaker 65 So in 2013, he attempted to buy what every legit business owner dreams of owning, an American politician.
Speaker 73 I absolutely know these children are heartbroken, but I also know they probably do not have the logistical ability to plan a nationwide rally without it being hijacked by groups that already had the pre-existing.
Speaker 75 going to the state legislature today they're 17 years old they can figure this out but
Speaker 73 they have the money for the bus and they're ready to go i mean i just have a hard time believing it
Speaker 39 that's jack kingston an 11-term republican congressman from savanna not so subtly accusing survivors of a school shooting of acting in a politically motivated co-opted way by pleading with congressmen and women their grandparents age to do something to help prevent them from being massacred in a classroom.
Speaker 33 It had George Soros written all over it.
Speaker 79 There was no fooling him.
Speaker 48 Surely the eagle-eyed and reasonable Representative Jack Kingston, who was the front-runner for a U.S.
Speaker 68 Senate seat in late 2013, would not accept $80,052 in campaign donations from a convicted felon.
Speaker 31 Or would he?
Speaker 35 In December 2013, the Atlanta Journal-Constitution received a tip about a fundraiser held for Representative Kingston at a winery and resort in Gwynnett.
Speaker 55 The fundraiser was hosted by Khalid Satari's lab, Confirmatrix, and his billing company, New Medical.
Speaker 80 At that fundraiser, which Jack Kingston personally attended, 26 employees from the companies donated more than $80,000 to the Kingston campaign.
Speaker 55 The Atlanta Journal-Constitution discovered that most of the donors were not registered to vote.
Speaker 65 nor did they have a history of political giving.
Speaker 44 The newspaper's theory of a a straw donor scheme was confirmed by a company whistleblower who said the employees were given quote-unquote bonuses and encouraged by Satari to donate most of it to the Kingston campaign.
Speaker 79 The associate told the Atlanta Journal-Constitution that Satari was hoping to build clout in Washington for expanded drug testing for welfare programs, which would be a boon for Confirmatrix.
Speaker 52 Quote, they wanted it where if you wanted to get Medicaid, you have to get a drug test.
Speaker 55 When the newspaper published the investigation linking Khalid Satari to the Kingston fundraiser, an FBI investigation was launched, and Kingston quickly refunded the money.
Speaker 43 Jack Kingston told the Atlanta Journal-Constitution that he knew nothing about Khalid Zatari.
Speaker 44 The FBI dropped their investigation after Jack Kingston lost in the primaries.
Speaker 29 Instead of becoming a senator, Jack went to work for a lobbying firm.
Speaker 44 And Khalid Satari continued his lucrative medical billing fraud scheme.
Speaker 55 But the feds were closing in again.
Speaker 44 Almost three years later, in November 2016, Khalid Satari's urinalysis lab, Confirmatrix, was raided by federal agents after being implicated as an unindicted co-conspirator in a scheme to distribute opiates illegally.
Speaker 40 Federal authorities shut down a series of pain clinics in East Tennessee that had been linked to hundreds of opioid deaths.
Speaker 54 A federal indictment claimed that Confirmatrix had paid over $200,000 to those pain clinics for patient accounts, and then, as usual, overbilled federal insurance programs.
Speaker 55 At the time, Confirmatrix was the most significant outlier among uranalysis labs and amounts billed to Medicare.
Speaker 43 The average per patient cost across the nation was $751.
Speaker 55 Confirmatrix billed an average of $2,406 per patient.
Speaker 33 Confirmatrix filed for bankruptcy two days after the raid, but no charges were ever filed. However, Khalid Satari already had a new laboratory in place just in case, Clio Laboratories.
Speaker 33 It too was registered in his son's name.
Speaker 40 Within months, Clio Laboratories was enrolled as a Medicare provider, but this time instead of a urine test, the lab was more focused on genetic testing.
Speaker 17 However, the goal of overbilling remained the same.
Speaker 57 The plan was to give away free and mostly medically worthless genetic screenings to senior citizens and then bill the government or private insurance companies for the costs.
Speaker 43 The tests were expensive, up to $18,000 per patient.
Speaker 55 If insurers declined to cover the costs, the patient was billed directly.
Speaker 68 It was an evil idea.
Speaker 57 But this time, Khalid Satari was not such a pioneer.
Speaker 73 Local advocates for seniors are warning of a genetic testing scam.
Speaker 86 Genetic testing companies are offering free tests to Medicare patients.
Speaker 76 They say it will help you avoid diseases or find the right medication.
Speaker 86 The catch, they want your Medicare ID number.
Speaker 87 Recruiters are showing up at senior events, promoting a genetic test they claim is completely paid for by Medicare.
Speaker 88 Testing company representatives are showing up at senior centers, senior housing developments, health fairs, farmers' markets, and even random shopping mall parking lots.
Speaker 89 Scammers are already setting up shop in senior citizens' centers right here in the mid-south.
Speaker 90 WoCon artists get seniors to submit DNA samples for genetic cancer risk testing.
Speaker 91 They pretend to screen for cancer and other life-threatening diseases. Then they ask for Medicare, Social Security, or other banking information.
Speaker 76
It's just pure greed. Pure, pure greed.
It had nothing to do with taking care of the community.
Speaker 89 Fraudsters, they're out to get your Medicare number. Scammers are always looking to take popular things that people are interested in and twist that around to get what they want and steal from you.
Speaker 24 I mean, something I always like to stress, you don't have to be an idiot or a dummy or a sucker to get scammed. These scammers are good at what they do.
Speaker 33 On September 30th, 2019, Khalid Satari surrendered to authorities in New Orleans.
Speaker 33 He was one of 35 defendants swept up in Operation Double Helix, a federal sting targeting allegedly $2.1 billion in fraudulent Medicare billings.
Speaker 34 for unnecessary genetic screenings.
Speaker 66 Khalid Satari's operation alone accounted for almost half a billion in cost.
Speaker 33 The government seized 16 bank accounts and restrained real estate from Satari.
Speaker 55 He is currently in custody fighting a series of counts related to the scheme, including conspiracy to commit money laundering.
Speaker 94 Breaking news tonight, 35 people are charged in a massive Medicare scam, accused of submitting more than $2 billion in false claims for bogus genetic tests.
Speaker 95 All paid for by your tax dollars.
Speaker 35 This type of inflated medical billing fraud is all too common.
Speaker 41 Five months before Operation Double Helix, the U.S.
Speaker 49 Department of Justice arrested 24 people involved with telemedicine and medical equipment companies for billing Medicare for more than $1.2 billion.
Speaker 55 The telemedicine companies were collecting Medicare IDs from senior citizens and sending them boxes of medical devices like leg braces that they didn't order.
Speaker 96 Even saying, no, I didn't want it about a week later, I got this box in the mail with everything that I didn't want in it.
Speaker 97 Less than a year after Operation Double Helix and Operation Brace Yourself came Operation Rubber Stamp, bringing the total to $4.5 billion in false billings from 86 criminal defendants, including more than two dozen licensed medical professionals.
Speaker 10 So far, more than 30 individuals have pleaded guilty.
Speaker 48 There will be more to come.
Speaker 81 The schemes evolve with the science.
Speaker 45 and they're nearly impossible to prevent.
Speaker 40 The best way to find them is to pay the claims and chase the crooks, who tend to stand out in a crowd when their bellies get full.
Speaker 61 Other times, it's the actual scientists and their promising ideas that devolve into a criminal conspiracy, for profit or for reverence.
Speaker 72 Ambition can make you look pretty ugly.
Speaker 3 A revolutionary biotechnology company raises millions of dollars from investors on the back of a microbial poop test, only to collapse under the weight of it all.
Speaker 50 On this episode of Swindled.
Speaker 23 They bribed government officials
Speaker 23 to clear violations of decades state law earlier in the Catholic Corps.
Speaker 2 Support for Swindled comes from Simply Safe.
Speaker 4 For the longest time, I thought home security meant an alarm going off after someone broke in.
Speaker 5 But if the alarm is already blaring, it's too late.
Speaker 9 The damage is done.
Speaker 11 That's a reactive approach, and it leaves you with that awful feeling of violation, even if the intruder runs away.
Speaker 2 That's why I switched to Simply Safe.
Speaker 12 They've completely changed the game with Active Guard outdoor protection, designed to stop crime before it starts.
Speaker 15 Their smart, AI-powered cameras don't just detect motion.
Speaker 5 They can tell you when there's a person lurking on your property.
Speaker 4 That instantly alerts SimplySafe's professional monitoring agents in real time.
Speaker 12 And here's the game changer. The agents can actually intervene while the intruder is still outside.
Speaker 16 Talk to them through two-way audio, hit them with a loud siren and spotlight.
Speaker 17 and call 911 if needed.
Speaker 18 It's proactive security, and that's real security.
Speaker 2 I trust SimplySafe because there are no long-term contracts, no hidden fees, and a 60-day money-back guarantee. They've been named best home security systems by U.S.
Speaker 2 News and World Report for five years in a row, and I can see why. Get 50% off your new SimplySafe system at simplysafe.com/slash swindled.
Speaker 2 That's 50% off your new SimplySafe system by visiting simplysafe.com/slash swindled. There's no safe like SimplySafe.
Speaker 96 The universe, that vast expanse of stars, planets, and infinite space, inspires a sense of awe and wonder when we gaze up into the night sky.
Speaker 96 You might be surprised to find out that there's an equally fascinating universe much closer to home. Living in, on, and around us is an unseen universe of microscopic organisms.
Speaker 96 Current estimates suggest there are more microorganisms in the human body than stars in the Milky Way.
Speaker 96 Though invisible to the naked eye, this teeming microcosm of bacteria, viruses, fungi, and other microbes has a tremendous influence on our health and lives.
Speaker 61 Ah, yes, the microbiome.
Speaker 66 Did you know that an ecosystem of trillions of bacteria live on and inside our bodies?
Speaker 33 Did you know that those bacteria account for three to six pounds of our body weight?
Speaker 9 Did you know those bacteria are essential to human health and and wellness?
Speaker 30 It's okay if you didn't know.
Speaker 40 The microbiome is a relatively new field of study.
Speaker 43 Although it has been known for some time that the human body is inhabited by at least 10 times more bacteria than human cells, most human studies have focused on the bad bacteria that makes us sick, rather than the good bacteria that keeps us healthy and possibly even shapes our moods and behavior.
Speaker 35 The microbiome is the forgotten organ.
Speaker 55 The National Institute of Health wanted to change that.
Speaker 9 So in 2007, they launched a five-year, $173 million initiative called the Human Microbiome Project.
Speaker 55 The first phase ran from 2007 to August 2012. It focused on sequencing the genomes of the thousands of species of microbes living in Synergy with 250 healthy human volunteers.
Speaker 100 It was a significant step in better understanding the human microbiome.
Speaker 40 Most people haven't heard about it and don't care about it, but some out there couldn't wait to see the results.
Speaker 62 You know the ones.
Speaker 100 The crazy ones. The misfits, the rebels, the troublemakers, the round pegs, and the square holes.
Speaker 40 In this particular case, it was three startup craze graduate students in San Francisco.
Speaker 68 In the wake of the Human Microbiome Project's completion, Jessica Richmond, William Luddington, and Zachary Apte were at lunch discussing their desire to examine their own microbiomes, but soon realized that such goals were practically impossible to achieve as an ordinary member of the public.
Speaker 10 We really wanted to sequence ourselves, Lovington told the Berkeley Science Review, but there wasn't a cheap place to do it that would give us meaningful, quick answers.
Speaker 9 Their team did not have the financial backing from the United States federal government, so they decided to invent a way to do it themselves.
Speaker 55 The group had enough expertise between the three of them to pull it off.
Speaker 19 Zachary Schultz-Apte had a PhD in biophysics and cell biology from the University of California, San Francisco, where he was currently enrolled.
Speaker 43 Will Ludington, also a student at UCSF, specialized in the ecological and evolutionary dynamics of gut microbiota.
Speaker 99 And Jessica Sunshine Richmond was a doctoral student in computational social science at Oxford.
Speaker 40 Before that, she was a successful entrepreneur who had reportedly launched and sold a company soon after graduating high school, before studying interdisciplinary engineering at Stanford, a LinkedIn dream team come true.
Speaker 53 With their powers combined, Apte, Ludington, and Richman founded U-Biome.
Speaker 59 The company's mission was to advance the science of the microbiome and make it useful to people.
Speaker 84 In other words, U-Biome wanted to provide a way for the public to monitor their own microbiomes and contribute the results to a larger publicly available data set that would dwarf the Human Microbiome project almost instantly.
Speaker 50 The possibilities would be endless.
Speaker 58 Because for the first time, U-Biome would allow people to observe lifestyle changes critically using concrete data.
Speaker 69 Whether it's a new diet or a promising new facial cleanser, U-Biome would provide a way to judge its effects based on changes to your microbiome.
Speaker 55 Customers with gastrointestinal or sinus problems could ask their own questions about their microbiome's role and could experiment with modifications based on their data.
Speaker 10 As a result, everything from autism to asthma to allergies to depression could be better understood, controlled, and personalized.
Speaker 37 The power of science was back in the hands of the people.
Speaker 19 It was citizen science at its finest.
Speaker 109
So citizen science is the process of involving the public in science. And it's desperately needed.
It's basically crowdsourcing applied to your health.
Speaker 111 And there's crowdsourcing and so many other things that are just
Speaker 109 not as important as basic scientific research. but that this is about to change.
Speaker 108 But ubium citizen science was quote discovery-based and lacked a hypothesis which academia does not like to fund.
Speaker 9 This ambitious project would require money.
Speaker 77 So, in the fundamental spirit of the company, in November 2012, uBiome turned to the people and launched an Indiegogo crowdfunding campaign.
Speaker 60 Hi, I'm Zach.
Speaker 74 I'm Will.
Speaker 109 And I'm Jessica. I'm going to tell you about an exciting exciting new project that I'm working on, UBiome.
Speaker 101 Scientists recently discovered a new organ in the human body.
Speaker 113 Incredibly, this organism made of human cells.
Speaker 74 It's microbes!
Speaker 113 It's called the microbiome and has the ecosystem of microbes in and on your body. From your feet to your gut to your brain, the microbiome is important to the functioning of the human body.
Speaker 101 In the Indiegogo introductory video, the U-Biome co-founders explained the benefits of testing the microbiome and how they planned to do it.
Speaker 40 Basic supporters of the campaign were to receive a scientific survey in the mail, along with a testing kit for the gut microbiome called the Explorer.
Speaker 55 The Explorer kit included a small cotton swab, which the customer would use to sample their poop.
Speaker 105 That sample would be returned to UBiome using the enclosed prepaid mailer, where it would then be sequenced at the company's lab in San Francisco.
Speaker 102 In our lab in San Francisco. It's in our lab in San Francisco.
Speaker 94 In our state-of-the-art lab right here in San Francisco.
Speaker 92 So we have our own lab that we designed ourselves.
Speaker 92 It's in our office in San Francisco.
Speaker 37 Within weeks, UBiome would follow up with a link to a portal where the customer could explore the results.
Speaker 55 An interface would inform people of what's in their gut, how it correlates to other people and uBiome's larger sample.
Speaker 57 and relevant scientific studies related to their microbiome profile.
Speaker 78 So much beautiful information wrapped in a pleasant user experience.
Speaker 113 Here's how we're going to do it. You fund our project and in return we send you a sample kit
Speaker 113 that you take a sample with and send back to us.
Speaker 113 We then use state-of-the-art DNA sequencing to analyze your samples and send custom bioinformatics back to you.
Speaker 66 UBiome set its crowdfunding goal at $100,000, a reasonable amount for such a research project, but a lofty goal by crowdfunding standards.
Speaker 55 Nevertheless, the UBiome team was confident.
Speaker 21 We believe the biological information era is going to follow the same trend that the internet did, Jessica Richmond said in a press release.
Speaker 78 When citizens became empowered to explore the internet via search engines like Google, usage skyrocketed.
Speaker 80 With UBiome, people can have cutting-edge access to the latest in biomedical science.
Speaker 57 This unparalleled access is going to change things in a big way.
Speaker 115 We have the science and the team that can make this a reality, but we need people like you to get this project started.
Speaker 113 We want to collaborate with you to build the world's largest database of human microbiomes, help people learn about their own bodies, and advance scientific progress.
Speaker 113 The more people we get, the more we can tell you about yourself and your microbiome. Please join us for
Speaker 74 Science!
Speaker 44 To promote the campaign, the company sent press releases to every digital and traditional publication that may be of interest.
Speaker 69 In return, UBiome received mentions by Forbes, NPR, Wired, TechCrunch, Boing Boing, The Wall Street Journal, and more.
Speaker 99 And Jessica Richman, who emerged as the spokesperson for the company, hit the biomedical media circuit hard.
Speaker 116 UBiome is all about understanding the human microbiome, the collection of microbes in your body. Going in, Richman said she and her colleagues had no idea whether their pitch would be successful.
Speaker 92 There's a lot of uncertainty. You sort of don't know if you're going to raise $10 or a million dollars, and you sort of have to be prepared or keep your mind open for any of those things to happen.
Speaker 116 Turns out they hit it big, one of the few to raise more than a quarter of a million bucks from their internet campaign.
Speaker 116 It seems likely they caught a recent wave of interest in what's living in our guts.
Speaker 101 UBiome's crowdfunding campaign ended in February 2013.
Speaker 83 The company raised $351,193 in 10 weeks, completely shattering its goal.
Speaker 98 The celebration did not last long, however.
Speaker 44 There was work to do.
Speaker 16 They had more than 2,500 poop kits to send out.
Speaker 84 Speaking of deuces, by the end of 2013, UBium co-founder Will Ludington had enough of that shit and left the company for personal reasons.
Speaker 7 However, Zach Apte and Jessica Richmond continued spreading the word.
Speaker 55 Their response to the crowdfunding campaign had been overwhelmingly positive.
Speaker 84 It even even allowed Jessica to realize every mega mind's dream.
Speaker 33 She presented her own TED Talk.
Speaker 32 Let's hope it doesn't go to her head.
Speaker 110 So I want to start off with a question.
Speaker 109 The title of my talk.
Speaker 110 Can a citizen scientist win a Nobel Prize?
Speaker 98 Well, so much for that.
Speaker 5 Actually, that was a TED Med talk, which is, if we're being honest, barely a TED Talk at all.
Speaker 79 Not sure if it even counts.
Speaker 45 Jessica also presented a TEDx talk in Brussels.
Speaker 57 But she couldn't quite reach the main stage.
Speaker 79 Not with that material.
Speaker 107 But there was room to grow.
Speaker 66 Unfortunately, there was a buzz about UBiome in Silicon Valley.
Speaker 57 It was the latest toy for the quantified self.
Speaker 31 Count your steps, monitor your sleep, and now sequence your microbiome.
Speaker 101 Become the optimal human machine, and then die anyway.
Speaker 65 That's an incomplete data set.
Speaker 114 Hi, I'm Zach Apde, CTO and co-founder of UBiome.
Speaker 110 And I'm Jessica Richmond, CEO and co-founder of UBiome.
Speaker 114 We've given thousands of people from all over the world access to valuable data about the bacteria that live in and on their body.
Speaker 110 We form partnerships with universities like Harvard, Stanford, and UCSF, and been featured in publications like the MIT Technology Review, the Wall Street Journal, and we run ABC News.
Speaker 110 We've done all this with the help of a community of eager and curious citizen scientists.
Speaker 78 For Jessica Richman, Zach Apti, and UBiome, the next few years were a wave of exponential growth.
Speaker 55 In 2014, they raised $5 million from investors in Silicon Valley with backing from startup Accelerator Y Combinator.
Speaker 21 The funding allowed UBiome to finally establish a professional lab space instead of storing its samples in storage closets and secondhand freezers.
Speaker 49 This move also enabled UBiome to receive clinical certification from the state of California, which meant that the company had government approval to become a bona fide medical testing company, even though its products exhibited zero medicinal utility.
Speaker 68 Initially, uBiome was for fun and curiosity, nothing more.
Speaker 45 The Explorer test was educational, but everyone could see the potential.
Speaker 92 What benefit you get from UBiome at this point is to learn more about your microbiome and how that interacts with your health.
Speaker 119 So we don't make health recommendations at this point because we're gathering this big data set.
Speaker 92 In the meantime, what you can do are scientific studies on yourself.
Speaker 33 In 2015, UBiome announced partnerships with Apple, the Centers for Disease Control, and numerous academic institutions, including Harvard, Stanford, and the University of California, San Francisco.
Speaker 58 The company also boasted of holding more than 200 patent assets relating to sample collection, laboratory automation, computational approaches, and more.
Speaker 55 uBiome even launched its own grant program.
Speaker 49 Jessica Richmond was named one of the most important women under 30 in tech by Business Insider, among other awards.
Speaker 75 The winner of the Ivy Innovator Award for Technology presented by Cadillac is
Speaker 24 Jessica Richmond.
Speaker 37 In 2016, Vast Company named UBiome one of the world's 10 most innovative companies in healthcare.
Speaker 82 They received accreditation from the College of American Pathologists, published some peer-reviewed studies, and raised even more money.
Speaker 105 In November, Silicon Valley venture firm 8VC invested $15.5 million into U-Biome on the heels of the company's new product announcement, SmartGut, the world's first sequencing-based microbiome test for clinical use.
Speaker 112 SmartGut is the world's first sequencing-based clinical microbiome test developed by our scientific team for doctors and their patients.
Speaker 112 With just one small, easily obtained sample, it generates invaluable reports for patients suffering from a range of chronic gut disorders, including Crohn's, ulcerative colitis, and irritable bowel syndrome.
Speaker 32 SmartGut was followed by Smart Jane, a revolutionary doctor-ordered, at-home, clinical, precision sequencing women's health test.
Speaker 55 UBiOM's combined HPV, STI, and vaginal risk factors test allowed patients to test themselves at home.
Speaker 81 Also, since both the Smart Gut and Smart Jane tests were required to be ordered by a health provider, the costs of the test were covered by health insurance.
Speaker 120 So I think this will have a massive change in a number of different markets that are all at this point uncorrelated to each other, but are actually very much related.
Speaker 118 There's a lab testing industry, there's consumer goods that have a microbiome component, there's cosmetics that have a microbiome component, there's food.
Speaker 120
So I guess we put all this together. We did this in one of our initial presentations for angel investors.
We put this together and they were like, really? You have like a trillion dollar market?
Speaker 120 But it's actually kind of true in a way because it affects so many different things and it's just a matter of staging them and going after the right ones first and then the other ones after that.
Speaker 69 In 2018, UBiome announced it had raised another $83 million in venture capital.
Speaker 97 Since its inception, UBiome had raised $105 million total.
Speaker 34 Jessica Richmond told Business Insider that the proceeds of the financing would be used to enhance and expand the company's product portfolio beyond SmartGud and Smart Jane.
Speaker 29 It was a triumphant year for UBiome.
Speaker 33 In addition to the major funding, the company had received numerous awards related to innovation and technological pioneering.
Speaker 21 Jessica Richmond and Zach Apte's wildest entrepreneurial dreams had come true.
Speaker 31 They were on top of the world.
Speaker 33 But behind the scenes was a different story.
Speaker 66 Nobody knew it yet, but uBiome was already in a death spiral.
Speaker 52 When interest waned, it would circle the drain.
Speaker 44 So long, we hardly knew you.
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Speaker 96 UBiome's mission is to advance the science of the microbiome and make it useful to people. We work with more than 200 universities and over 1,000 researchers around the world.
Speaker 96 Our database contains the largest microbiome data set in the world with over 250,000 samples, growing to over 1 million by the end of 2019.
Speaker 55 uBiome had naysayers and critics since day one.
Speaker 101 Early on, there were vocal concerns from members of the scientific community that UBiome had not obtained approval from an IRB or institutional review board.
Speaker 18 IRBs oversee the research to make sure the participants are treated ethically.
Speaker 81 They're central for any modern scientific study.
Speaker 13 UBiome eventually obtained an IRB for their work.
Speaker 43 but pushed back at the idea in a blog post on Scientific American.
Speaker 71 IRBs are are for the, quote, old world of scientific inquiry, not for citizen scientists who are studying themselves.
Speaker 55 That was another issue altogether, UBiome's critics say.
Speaker 39 The data.
Speaker 21 Since people were testing at home with no clinical supervision, how could U-Biome ensure that the samples were authentic?
Speaker 40 If people were sick and said they weren't, if someone sent in pet feces instead of their own, if someone was on antibiotics, all of these things could distort the data.
Speaker 34 U-Biome's entire premise rested on an honor system that was highly subject to human error.
Speaker 39 Not that it even mattered, according to many, even if accurate.
Speaker 52 The data was borderline useless at the moment anyway.
Speaker 95
I mean, it was obvious. There's nothing you can say right now about the microbiome that's of like deep clinical utility.
It's a fascinating place as a scientist, right?
Speaker 95 It's a new frontier of research, and it's a wild place, and the complexities of analysis are really fun.
Speaker 95 But that does mean that we don't know enough to give people solid clinical answers on this stuff for the most part yet.
Speaker 50 That's Gabe Foster.
Speaker 103 He was in charge of building the testing lab at UBiome.
Speaker 44 He told Amy Doxer Marcus at the Wall Street Journal that, in his professional opinion, despite what the company advertised, there is no clinical application for a microbiome test.
Speaker 58 The science is just too young.
Speaker 55 The microbiome changes too rapidly.
Speaker 108 Jessica Richmond Richmond and Zach Apte knew deep down that was true.
Speaker 67 They hadn't even bothered to add controls for baseline comparisons.
Speaker 95 And so I was asking about this, and Zach straight up said, you know, the customers aren't going to know what this means anyway, so who cares what we give them?
Speaker 74 And
Speaker 95 to me, that was mind-blowing.
Speaker 33 Gabe Foster was fired from UBiome in 2014.
Speaker 58 He told the Wall Street Journal that he had disagreed with Zach Apte one too many times.
Speaker 33 The culture at UBiome did not allow for such insubordination.
Speaker 81 Former employees further confirmed the hostile work environment to Business Insider.
Speaker 57 They described Richmond and Apte as intimidating and micromanagers.
Speaker 55 People would literally sneak out the back door of the office when they heard Zach come in to avoid being attacked, one employee said. They were also incredibly secretive, another remembered.
Speaker 104 It was next to impossible to be granted access to the database.
Speaker 81 The staff didn't even know what the precision sequencing they were advertising even meant.
Speaker 55 And everyone had to pretend that they didn't know Zach and Jessica were in a romantic relationship.
Speaker 32 It was obvious, but the co-founders were worried about the optics with the investors and all.
Speaker 69 Anyone who got promoted at UBiome were the yes men, a former employee told Business Insider.
Speaker 45 It quickly became a place where you couldn't disagree.
Speaker 53 Those who were blindly loyal were awarded promotions.
Speaker 58 Business Insider reached out to Jessica Richmond and Zach Apte about their former employees' concerns and criticism.
Speaker 9 A spokesperson for the couple responded in part, quote, Business Insider's unsubstantiated allegations appear to come from disgruntled former employees.
Speaker 68 Because Business Insider has not provided Dr.
Speaker 103 Apte or Dr.
Speaker 47 Richman with any data analysis, statements by other authors on the peer-reviewed scientific paper, or specific concerns from other experts in the field, there is no way to know whether their assertions are based on real data or simply idle gossip and guesswork.
Speaker 55 Business Insider also asked Jessica Richmond about her age after discovering that she was 40 years old in 2014 when she appeared in one of the publication's own articles about the 30 most important women under 30 in tech.
Speaker 85 Additionally, in 2018, Richmond confirmed to a Business Insider reporter that she was under 40 years old to earn a spot on another list of healthcare leaders under 40.
Speaker 99 She was 44 years old at that time.
Speaker 33 The couple's spokesperson responded: Business Insider wants to claim that it was Dr.
Speaker 42 Richman's responsibility to notify the paper when it erroneously included her on an award list and wants to recast its own error as if Dr.
Speaker 52 Richman was deliberately untruthful.
Speaker 108 Jessica Richmond and Zach Apte were a lot of things.
Speaker 69 Great at marketing, yes.
Speaker 10 Exaggerative salespeople, perhaps.
Speaker 47 Deliberately untruthful?
Speaker 107 Surely not.
Speaker 14 Unless.
Speaker 121 I requested one test, I send the test back, then a few months later, they say, oh, we've upgraded our technology. Click this button, we'll resequence your biome or we'll upgrade your test results.
Speaker 121 And then you click the button, they bill the insurance again for another $3,000.
Speaker 121 I just, the more time I spent with UBiome, the less I trusted what they were doing, both on a scientific and an ethical level.
Speaker 57 That's Damian Moskowitz.
Speaker 55 He was a former customer that spoke to Amy Doxer Marcus at the Wall Street Journal about Ubiome's aggressive business tactics.
Speaker 69 Damien said Ubium billed his insurance multiple times for a single test.
Speaker 33 The company repeatedly gave him the option to upgrade his results or re-sequence his microbiome based on that single test.
Speaker 52 Sometimes they would throw a $20 Amazon gift card his way if he agreed.
Speaker 55 Ubiome was making $3,000 every time.
Speaker 98 Damian Moskowitz felt the company's actions were shady, so he investigated.
Speaker 33 He discovered that there was a different billing code for every charge on the insurance records, even though it was the same test.
Speaker 47 It was a deliberate misdirection by UBiome to keep insurance companies from noticing there was a problem.
Speaker 35 Moskowitz sent letters voicing his concerns to the California Medical Board and the Wall Street Journal in May 2018.
Speaker 30 Both organizations began taking a closer look.
Speaker 7 Meanwhile, complaints from other customers kept pouring in.
Speaker 34 Mark Harris told CNBC that he ordered one smart gut test from UBiome and received six kits in the mail.
Speaker 17 UBiome reminded him that the microbiome changes over time, so just take the tests, okay?
Speaker 57 Mark never sent back all six tests despite the company's relentless pestering.
Speaker 26 Imagine his surprise upon learning that UBiome had charged his insurance $2,970
Speaker 34 five separate times.
Speaker 55 The Federal Trade Commission had received more than 20 complaints about UBiome's billing practices between July 2017 and March 2019.
Speaker 55 Customers were being billed for unexpected tests, expected tests they never received, and tests they had returned for which the results were never seen.
Speaker 47 The insurance companies eventually caught onto Ubium's scam and stopped providing reimbursement, leaving the customer on the hook.
Speaker 81 Even more concerning to some was the fact that those customers were essentially diagnosing themselves.
Speaker 85 Everyone was a few checked survey boxes away from contracting irritable bowel syndrome.
Speaker 26 The order would be sent to a preferred doctor with a rubber stamp.
Speaker 43 A testing kit was in the mail, soon followed by the bill.
Speaker 69 Ubium was cutting every corner to reach their optimistic revenue projections.
Speaker 47 Samples were slowing down, a former employee told Business Insider.
Speaker 13 They were trying to find any reason why we should bill again for the samples that were in-house.
Speaker 55 Ubiome was getting desperate. They stopped asking for medical records and allowed patients to order their tests without providing photo IDs.
Speaker 55 It felt like the science became less and less important to them over time, a former employee said.
Speaker 93 In January 2019, UBiome laid off 55 of its 300 employees.
Speaker 47 The company told CNBC that it was looking to realign its operations and shift to new areas with more focus on drugs and partnerships with pharmaceutical developers.
Speaker 47 One of those partnerships was announced in March 2019. L'Oreal, the skincare company, partnered with UBiome to advance advance research into the skin microbiome.
Speaker 55 The future of personalized skincare was bright, not so much for uBiome.
Speaker 39 The following month, the FBI raided their lab in San Francisco.
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Speaker 122
A San Francisco-based health startup got raided by the FBI just yesterday. The Fed showed up at UBiome.
It's a biotech company in the Soma district of San Francisco.
Speaker 122 They broke down the door and asked employees
Speaker 122 to hand over their computers. The FBI is investigating how it bills health insurers for its special gut health tests.
Speaker 109 Pardon me.
Speaker 93 On Friday, April 29th, 2019, the Federal Bureau of Investigations visited the offices of UBiome.
Speaker 55 Agents loaded documents into boxes and asked the employees to hand over the computers. Then the evidence was loaded into a van that sped away, leaving an office of employees quite confused.
Speaker 33 An unnamed source told the Wall Street Journal that the raid was related to UBiome's billing practices.
Speaker 10 practices.
Speaker 77 The FBI refused to comment.
Speaker 55 However, a UBiome spokesperson told Biospace that the company was, quote, cooperating fully with federal authorities on this matter.
Speaker 55 We look forward to continuing to serve the needs of health care providers and patients.
Speaker 123 A testing startup, UBIOM, agents looking into whether the company used improper billing codes for insurance claims.
Speaker 76 This is according to a report in the Wall Street Journal, and also that they sought payment for unnecessary testing. Now, this investigation also involves the doctors who ordered those tests.
Speaker 123 UBiOM raised $83 million in financing last fall.
Speaker 21 Soon after the raid, UBium's board of directors announced an internal investigation and placed co-founders Jessica Richman and Zach Apti on administrative leave.
Speaker 64 In their absence, the board appointed John Raykow, a former federal prosecutor.
Speaker 6 who has served as UBiOM's general counsel as the new acting head of the company.
Speaker 108 John Raykow called a staff meeting where he announced that UBiome would continue operating as normal.
Speaker 57 He assured the employees that the science was solid.
Speaker 52 It was the billing practices that were the issue.
Speaker 78 Everything would be okay.
Speaker 55 Raykow also issued a statement to calm the investors' fears.
Speaker 78 The board and management team have taken strong and swift action to address the issues that have come to light, including implementing a new code of ethics and initiating an independent review of UBiOM's billing practices.
Speaker 44 As we work diligently to restore the company's credibility and the integrity of its leadership, we will take any corrective actions that are needed to ensure that UBiome becomes a stronger company.
Speaker 34 There is significant clinical evidence and medical literature that demonstrates the utility and value of UBiome's products as important tools for patients, healthcare providers, and our commercial partners.
Speaker 104 And the company looks forward to continuing to demonstrate this clinical utility and value at a time of growing demand in the market.
Speaker 69 Three months later, John Raycow resigned.
Speaker 47 He wanted to, quote, spend more time with his family.
Speaker 33 Smart move.
Speaker 9 That same month, July 2019, Jessica Richmond and Zach Apte formally resigned from UBiome.
Speaker 99 A consulting firm, Golden Associates, took on the leadership role at the company while the internal investigation continued.
Speaker 33 Golden Associates' first order of business was to suspend clinical operations. No more smart gut, no more smart chain.
Speaker 107 The original clinically worthless explorer kit was the only test on the menu.
Speaker 13 Days later, UBiOM reduced its remaining workforce even further.
Speaker 20 Many of the terminated employees found out they were getting fired days earlier when they received a pay stub off schedule that was two weeks short.
Speaker 81 Though clinically neutered and trimmed to a skeleton crew, UBiome was still showing signs of life that summer.
Speaker 7 The company rehired its lab director and resumed processing samples.
Speaker 10 It also announced a new partnership with CVS.
Speaker 55 The drug chain would begin selling UBiome's explorer kits in stores.
Speaker 65 This was huge.
Speaker 105 To celebrate the fresh start, the interim management of UBiome reorganized the company's debt through Chapter 11 bankruptcy and started shopping for a new owner.
Speaker 55 But then CVS got cold feet.
Speaker 55 Given the circumstances surrounding UBiome, we will be stopping shipments and, in the event product has already arrived in store, marking it as do not sell, a CVS spokesman told Business Insider by email.
Speaker 35 To add insult to injury, UBiome lost its lab certification.
Speaker 78 All of UBium's plans were ruined.
Speaker 55 That Chapter 11 bankruptcy turned into a Chapter 7 bankruptcy, and on October 2nd, 2019, UBiome closed its doors for good.
Speaker 55 Jessica Richmond and Zach Apke were long gone by the time the federal authorities filed charges against them in March 2021.
Speaker 9 The couple got married in 2019 and left for Germany soon after, where Apte is also a citizen.
Speaker 55 In April 2021, federal prosecutors received a letter from Jessica Richmond's attorney.
Speaker 68 According to the Wall Street Journal, the lawyer said that Jessica suffered from a medical condition and could not travel.
Speaker 71 and Zach was Jessica's caretaker, which meant that he could not travel either.
Speaker 49 The lawyer claimed that the couple are not fugitives from justice and that their absence has absolutely nothing to do with the more than 40 criminal charges of healthcare, securities, and wire fraud that were waiting for them.
Speaker 69 They would get around to it eventually.
Speaker 21 The criminal complaint alleged U-Biome tricked insurers into paying for tests that weren't medically necessary or properly vetted by medical regulators.
Speaker 44 The company would fake documents by using the names of doctors and other healthcare workers without their knowledge and lie to insurance providers to keep them at bay.
Speaker 63 Richmond and Apte were also facing separate civil charges brought by the Securities and Exchange Commission.
Speaker 51 The SEC alleged that 46-year-old Jessica Richmond and 36-year-old Zach Apte defrauded investors out of $60 million by giving a false impression of how well UBiome was doing.
Speaker 55 We allege that Richmond and Apte touted UBiome as a successful and fast-growing biotech pioneer.
Speaker 43 while hiding the fact that the company's purported success depended on deceit, said Aaron Schneider, director of the SEC's San Francisco Regional Office.
Speaker 101 UBiome's purported success in generating revenue was a sham, the SEC's complaint reads.
Speaker 64 It depended on duping doctors into ordering unnecessary tests and other improper practices that Richmond and Apte directed and which, once discovered, led insurers to claw back their previous reimbursement payments to U-Biome.
Speaker 55 In the civil complaint, the SEC is asking the court to bar both Richmond and Apte from ever serving as an officer of a publicly traded company, to bar them from buying or selling shares except for their own personal accounts, force Richmond and Apte to return their investors $60 million with interest and to pay additional criminal penalties.
Speaker 55 The SEC is also seeking to recover the millions of dollars Richmond and Apte made by selling their own U-Biome shares during fundraising.
Speaker 21 Jessica Richmond and Zachary Apte face up to 100 years in prison if they ever stand trial.
Speaker 111 So
Speaker 111 part of this gig as CEO of UBIOM is to be able to is that I get to make a lot of poop jokes and we have a lot of fun around the office talking about poop.
Speaker 111 But you know, all joking aside, it's really funny how we think of poop as sort of this waste product, which it is, obviously, but it's also this gold mine of information that can help us improve our health.
Speaker 18 Swindled is written, researched, produced, and hosted by me, a concerned citizen, with original music by Trevor Howard, aka The Former, aka The Explorer.
Speaker 60 For more information about Swindled, you can visit swindledpodcast.com and follow us on Instagram, Facebook, and Twitter at SwindledPodcast.
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Speaker 124 My name is Hannah from Melbourne, Australia. My name is Jamie
Speaker 124
from Brooklyn, New York. Hi, my name is Abby, and I'm an Amsterdam.
And I am a company citizen and a value designer.
Speaker 25 TM.
Speaker 25 In other words, I pay you to value me.
Speaker 124 Capitalism at its first.
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