It seems to me that there have always been plenty of Silicon Valley characters to despise. Way pre-dating Mark Zuckerberg and the fab, fun, folks at Facebook. I mean, Larry Ellison of Oracle's been around for a good long time now, hasn't he?
But the Valley just seems to keep on minting them. Elon Musk, anyone?
Then there's Elizabeth Holmes, who, once I retired Zuck to emeritus status, became pretty much my favorite SVer you love to hate. You remember Elizabeth Holmes, the willowy blonde con artist who founded Theranos, the bogus blood testing start up that was for quite a while an investor darling. (Holmes, herself, was the darling of A-list old geezers like Henry Kissinger, James Mattis, and George Shultz who got wooed to sit on her board and provided her and her company with insta-credibility.) Holmes has a trial upcoming and she's back in the news because the trial had to be postponed once she sprung the news on the court that she's pregnant. She's facing 20 years for her fraud, but she'll be on trial as a new mom. So we can expect a jury con: the sympathy card that mother and baby shouldn't be separated. I'll say this for Holmes, she sure knows how to play the long game.
Theranos wasn't the only SV biotech that turned out to be a fake and a fraud.
There's also uBiome.
The clever part of their business model was that they got doctors to okay the tests, and insurance companies to pay for them, which got especially juicy when they turned it into a recurring revenue stream by billing for more and more tests on the same samples.
But co-founders Zachary Apte and Jessica Richman (who are now married to each other) may have been too clever for their own good. They're facing some pretty significant charges and are considered at the moment to be fugitives.
The federal indictment against Richman and Apte states that uBiome sought upwards of $300million in reimbursement claims from private and public health insurers between 2015 and 2019.The SEC is also after them for bilking investors.
The company was ultimately paid more than $35million for tests that 'were not validated and not medically necessary'. It also allegedly billed insurance providers and patients for tests that hadn't been conducted yet.
The defendants are also accused of falsifying documents, lying and concealing facts about their billing model when asked by insurance providers, as well as misleading and defrauding their investors. (Source: Daily Mail)
The duo have some pretty impressive credentials. He's a PhD in astrophysics. She's a Ted Talker with a PhD from the business school at Oxford. They probably could have made a fine living without becoming fraudsters.
Anyway, the company - once it was raided by the FBI, suspended all testing (and, presumably) billing, and fired Apte and Richman - filed for bankruptcy in September 2019. They were completely out of business a month later.
Did they start out to commit fraud? When they founded their business, did they rely on the law offices of Dewey, Cheatham and Howe for advice? Were they just lusting after huge fortunes? (Forget 'who wants to be a millionaire?' The answer to that one is 'nobody who's anybody.' The current question is 'who wants to be a billionaire?' and the answer is an awful lot of folks in Silicon Valley.) Or are Apte and Richman true believers whose true belief caused them to cut corners and blind-eye a bunch of stuff in hopes that it would all work out? As in the old flow chart cartoon in which one of the boxes is labeled "Miracle Occurs Here." As happens in so many fraud and embezzlement cases.
It'll be interesting to see what happens to this duo. Who knows? If the judge and jury don't buy her mommy defense, maybe Elizabeth Holmes will end up with Jessica Richman as her cellmate.
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