We are bringing you the complete story of uBiome. It was a biotech company with promise: charismatic leaders, an exciting product and lots of venture-capital funding. So why did the FBI end up raiding its office? And why is the government calling its leaders fugitives? WSJ's Amy Dockser Marcus tells the story of uBiome's spectacular downfall.

This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.

Kate Linebaugh: Hey, it's your hosts, Kate Linebaugh.

Ryan Knutson: And Ryan Knutson. Earlier this month, we brought you a two-part story on the biotech startup uBiome, and today, we're bringing those parts together. Now you can hear the entire saga in one place.

Kate Linebaugh: uBiome was a biotech company that seemed to have it all. Idealistic leaders, a promising idea, and lots of venture capital funding. But eventually, the company had a spectacular downfall.

Ryan Knutson: For the past few years, our colleague Amy Dockser Marcus and a team of Wall Street Journal reporters have been covering the rise and fall of uBiome, and so for our story today, Amy's going to take over. Here she is.

Amy Dockser Marcus: As a reporter, I spend a lot of my time thinking about why healthcare doesn't work for so many people. Why cures still seem out of reach for so many, how medicine seems to focus more on treating disease rather than preventing it. So back in 2014, I had taken an interest in this company called uBiome. At the time, it was a small startup, but it's founders, Jessica Richman and Zach Apte, had big ambitions. Their product was an at-home test kit, kind of like 23andMe. But this kit would test the makeup of your microbiome, the trillions of microbes that live in and on all of us. The bigger idea behind the company was all about something called citizen science, getting everyday people involved in data collection, understanding their own bodies, and taking control of their health. But one day a few years ago, this guy reached out to me. Someone I had never met before, and he had questions about uBiome's business practices. He thought the company might be committing fraud. I started looking into it, and in April 2019 -

Speaker 4: San Francisco Bay's health startup got raided by the feds today. The FBI agents showed up at uBiome. They broke down the front door and asked employees to hand over their computers. The FBI ...

Amy Dockser Marcus: This March, uBiome's two leaders were charged with defrauding investors and insurers in a multimillion dollar scheme, and the government says they're fugitives. Welcome to The Journal, our show about money, business and power. I'm Amy Dockser Marcus. It's Wednesday, November 24. Coming up on the show, what went wrong at uBiome. The story starts as many Silicon Valley stories do, with a TED Talk.

Jessica Richman: Thank you so much for letting me speak here. This is really amazing.

Amy Dockser Marcus: That's Jessica Richman. At the time, she was a newly minted Silicon Valley entrepreneur. Her company was uBiome. The startup was predicated on people sending in their poop.

Jessica Richman: Basically you send us your poop. Yeah, your poop. We want all of your poop.

Amy Dockser Marcus: That's because microorganisms in the intestine end up there. So a poop sample was a messy but relatively simple way to get a read of the microbiome.

Jessica Richman: We may have heard about the human microbiome. The microbiome is an ecosystem of organisms that live on and inside of us. They're kind of our microbial overlords.

Amy Dockser Marcus: And it was a good time to start a company that focused on the microbiome. Once largely unexplored, the microbiome was getting more attention from scientists. Some of the new research suggested those tiny microbes and cells might have major health implications. Jessica was capitalizing on that moment.

Jessica Richman: So we are using this data about the microbiome to ask and answer questions about health and start to solve complex diseases, like autism, which seems to have a connection to the microbiome, chronic fatigue syndrome, irritable bowel, Crohn's, ulcerative colitis, autoimmune disorders dependent on the microbiome.

Amy Dockser Marcus: Jessica gave this speech in 2013, the year before she had started uBiome with her co-founder, Zach Apte. There was a co-founder, but he left the company less than a year after it launched. We should say we reached out to Jessica and Zach multiple times through their lawyers for interviews and for comment, but we never heard back. But through our reporting, based on documents and interviews, we have been able to put together a picture of who Jessica and Zach were. Zach had a PhD in biophysics and cell biology from the University of California - San Francisco, and Jessica did at least part of a doctorate at the business school at Oxford. Neither had a medical degree. They were charismatic and a bit nerdy. Generally speaking, Jessica was the public face of the company and Zach worked more behind the scenes, and they spoke passionately about uBiome's larger goals, bringing microbiome research to everyone who wanted it. So they ran a crowdfunding campaign. It was an unusual move for a biotech company, but it ended up working. Jessica was even featured on an NPR segment about crowdfunding and science.

Speaker 6: 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.

Jessica Richman: There's a lot of uncertainty. You sort of don't know if you're going to raise ten dollars 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 6: Turns out they hit it big, one of the few to raise more than a quarter of a million bucks from their internet campaign. It seems likely they caught a recent wave of interest in what's living in our guts, and people ...

Amy Dockser Marcus: After the successful campaign, uBiome sent out kits to people who had contributed. The kits included a small cotton swab. If you wanted a test of your gut microbiome, you would swab it on some recently used toilet paper, stick it in a tube, and then mail it in. Jessica and Zach needed to hire someone to help turn around the results. Someone who could build up a new lab.

Gabe Foster: So I was in San Francisco looking for work.

Amy Dockser Marcus: That's Gabe Foster. He had a background in biochemistry.

Gabe Foster: And my brother's now ex-wife heard of a launch event for a startup company who just raised some money, asked if I wanted to go along and I did and it was uBiome's launch party. And it was in a classroom at UCSF. There was pizza and soda and a few beers, and a few weeks later, I was bombing around the internet looking for work, and an ad on Craigslist sounded a lot like the people I had just talked to. And so I shot him a note saying, "I know you guys. Let's talk."

Amy Dockser Marcus: Jessica and Zach ended up hiring Gabe.

Gabe Foster: My job at uBiome was to build the lab. We had promised several thousand samples to be returned to customers in a pretty tight timeframe and somebody had to actually run them.

Amy Dockser Marcus: And so what was the work environment like?

Gabe Foster: So there was a common room with a couch in it and there were several rooms with lab equipment and a couple cheap robots that we bought on Ebay to slap together. I mean it really was just a bunch of young people hanging around. I mean getting things done but it was not formal at all.

Amy Dockser Marcus: So what were your early impressions of Zach and Jessica?

Gabe Foster: Zach is an interesting man. When you first meet Zach, he screams Berkeley. He is very informal, he likes to talk about feelings a lot. He hugs, he's sort of large and soft and smiles a lot and tries really hard to engage with people. And that all makes it really easy to start working with Zach. But it becomes apparent pretty quickly that Zach walks into every single room assuming he can do everyone's job in that room better than they can. He really has this sense of cleverness where he thinks he's just absolutely so clever he can get away with anything. Jessica wanted nothing more in this world than to be considered a successful entrepreneur. That's what she wanted, she said as much, and uBiome was her most promising vehicle to be that.

Amy Dockser Marcus: Jessica and Zach were trying to make it big, as a Silicon Valley startup, and based on what Gabe saw, they were succeeding.

Gabe Foster: They had just raised a hot mess of money and so spirits were pretty high. And I thought the core idea of the company at the time was incredibly sound and made a lot of sense. I mean they billed themselves as the 23andMe of poop.

Amy Dockser Marcus: The 23andMe of poop. Did they actually use that phrase or is that your phrase?

Gabe Foster: They used that phrase more than once, and it was dead-on. That was exactly what we were trying to be at the time.

Amy Dockser Marcus: And what does that mean?

Gabe Foster: Well, when we think 23andMe, it's an informative, entertaining product.

Amy Dockser Marcus: 23andMe is best known for genetic testing that tells people about their ancestry and their potential risk for certain health conditions. The information isn't intended to diagnose diseases, or be used to make medical decisions without the guidance of a doctor. uBiome's test also wasn't intended for medical decisions. It was called Explorer, and it was meant to do just that, help you explore what was living in your gut. They also tested areas of your body like your mouth or skin. The Explorer reports were easy to read. Customers were encouraged to "know your bacteria" and told whether or not their bacteria skewed in favor of a type correlated with weight loss. They also received a microbiome diversity score, plotted on a bar graph, along with how it compared with other people's scores. The report said that greater microbiome diversity had been connected to good health. In terms of practical advice, it offered suggestions that might improve someone's diversity score, such as regular exercise and eating more fiber.

Gabe Foster: The technology itself is really easy. It's not hard to do.

Amy Dockser Marcus: But then you have to tell me what that means, right?

Gabe Foster: And that's the challenge. Now your microbiome is hundreds of thousands of millions of different species in different proportions, and they're all interacting with their host, and it's changing all the time, based on what you eat and what you do and when you sleep and even more than that, it's different all throughout your your digestive system. So trying to understand the impact of something that that's hard to measure and that complicated is ... It's daunting, it's incomprehensible how complex it is.

Amy Dockser Marcus: Jessica had claimed that understanding the microbiome might hold the key to understanding our health and diseases like autism and depression. But the science wasn't close to conclusive. The complexity of the microbiome means we don't really know exactly what someone's results mean. That's why uBiome's test was more for people's curiosity. In fact, Gabe felt pretty strongly that microbiome testing should not be used to make medical decisions.

Gabe Foster: In my professional opinion, there is no clinical application for a test like that that I can think of, none. I don't know what on earth you could tell someone from their proportion of bacteria with what we know about the microbiome that's clinically relevant. I mean it's fishing, right? It's fine if you're fishing an entertainment product but clinical diagnostic products are not fishing.

Amy Dockser Marcus: So when you had your early conversations among yourselves about the test, did you all discuss this lack of clinical utility?

Gabe Foster: I mean it was obvious. There's nothing you can say right now about the microbiome that's of deep clinical utility. It's a fascinating place as a scientist, right? It's a new frontier of research and it's a wild place, and the complexities of analysis are really fun. But that does mean that we don't know enough to give people solid clinical answers on this stuff for the most part yet.

Amy Dockser Marcus: And by the way, this is a distinction with a difference. Because clinical tests can often be covered by health insurance, like a test for cholesterol, strep throat, STDs, and that kind of coverage generally requires companies to jump through some regulatory hoops.

Gabe Foster: In fact, in the early days we used to laugh about how we'd never do that. Stay the heck away from clinical work, it's too regulated. To do clinical work well and to do it legally is an incredibly expensive, tedious thing to do. To start up a lab and file all the paperwork and get regulated is just a hassle, and when you have something that just isn't clinically relevant yet, why bother? That was my thinking, that was our thinking early. There's just ... To actually bill insurance companies for something, it's just such a hassle of regulations that you better have a nice, simple product with an answer that you provide to a doctor.

Amy Dockser Marcus: Even though microbiome science is still evolving, there were a lot of people interested in uBiome's test, especially in Silicon Valley in the early 2010s. This was a time when people were quantifying every part of their bodies. The movement went by a few names, citizen science, quantified self, but the idea was roughly the same, everyday people should have the tools to make insights about their bodies, without involving the medical establishment, and people should be able to own, analyze and share that data.

Gabe Foster: The people who were the most excited early on, our earliest adopters, were all of the quantified health people in the Bay Area. There's a fairly substantial community of people that really tries to boil down everything they do and everything they can into measurements, and try to optimize themselves. Optimize what they eat and when they exercise and everything, everything. They'll measure their blood pressure, they'll get blood tests as often as they can. Everything you can imagine, they try to measure, and they were so excited. Because it was yet another thing they could measure about themselves.

Amy Dockser Marcus: uBiome also raised a lot of money off this excitement. They graduated from the humble world of crowdfunding to the world of venture capital. In 2014, Jessica and Zach raised around $5 million from of Silicon Valley's most prominent investors. They would later go on to raise a total of around $81 million. So uBiome dit have its fans, but it also had its critics. Jonathan Eisen considered himself a little bit of both.

Jonathan Eisen: I'm a professor at UC Davis and I'm a microbiologist and I study the evolution and ecology of microbes.

Amy Dockser Marcus: Jonathan Eisen is one of the most influential microbiologists in the country. He has a TED Talk and over 60,000 followers on Twitter, which is a lot for a scientist. He also has a popular microbiology blog, where he gives out the "Overselling the Microbiome Award".

Jonathan Eisen: I do believe that microbes and the microbiome are really important for the health of various plants and animals including humans. But I also spend a lot of time critiquing people for overselling the benefits of the microbiome where people say that microbiomes are going to save the world and in reality we're not there yet.

Amy Dockser Marcus: Back in 2013, Jonathan attended a conference called Science Online. During a discussion about ethics and citizen science, uBiome came up. Some in the audience were uncomfortable that uBiome didn't initially get something called an IRB to approve their work. An IRB, or institutional review board, is an independent group that ensures people that are the subjects in scientific research are treated ethically, and what uBiome was doing sounded a lot like research on human subjects. IRBs are an essential part of modern science. Government agencies usually won't even fund studies without them.

Jonathan Eisen: So they were asking a lot of questions about people, about their health history, about their diet, about other parts of their biology and then they would get information in theory about what microbes were present and you can imagine in many cases you could say it might be fun, but what if you found in someone's sample that they were overrun with chlamydia? There are things that you can find out when you do those types of diagnostic tests that you generally should be operating under a more careful review process. I think there was a medical ethicist there and there were a few other people who are like, "This doesn't make any sense. How can you possibly be collecting personal information about people, sharing it with them and not have an IRB?" Something seemed off. There was some people at the conference who I talked to after the talk and I was like, "Someone needs to convince them that IRBs are actually really important and they need to take them seriously."

Amy Dockser Marcus: uBiome did eventually get approval of their research protocol from an independent IRB company. But that didn't stop Jessica and Zach from offering a critique. In a blog post on Scientific American, they wrote that IRBs are structured for, "The old world of scientific inquiry, not for citizen scientists who are studying themselves." How did you go from that meeting to joining the Scientific Advisory Board?

Jonathan Eisen: What happened was basically they came to me and said, "Look, we accept your criticism. We would like help. We would like to do things better and in particular," in my conversations with them, this was about the overselling of the microbiome and they said, "Look, we know you're obsessed with this, not having people oversell the microbiome and we would really like to do things better and would you be willing to give us advice and join our Scientific Advisory Board?" I think I said, "Okay, if you're asking for advice, I'm going to step up and be willing to do it." In fact, two of my colleagues said, "Someone has to do this. We need them to hear this information."

Amy Dockser Marcus: And in 2013, Jonathan joined uBiome's Scientific Advisory Board. He got paid in stock options. The board eventually grew to more than a dozen members, and included some notable names, such as Harvard University's George Church. In his role, Jonathan agreed to help vet the company's communications, like press releases and blog posts, to make sure they were scientifically accurate. But he says he wasn't vetting the science itself. And while he may have felt that he was doing it for the good of microbiology, it ended up being good for uBiome's marketing too. Jessica and Zach put Jonathan's name on many of uBiome's press releases and marketing materials. Later, Jonathan would appear on one of the most popular podcasts in the world.

Tim Ferriss: This is Tim Ferriss and welcome to The Tim Ferriss Show.

Amy Dockser Marcus: Right alongside Jessica.

Tim Ferriss: On this particular episode, we have Jessica Richman, who is co-founder and CEO of uBiome, and then you have Jonathan Eisen, who is a full professor at the University of California, Davis. Jessica and Jonathan, thank you so much for taking the time to be on the show.

Jonathan Eisen: Glad to be here.

Jessica Richman: Really glad to be here.

Amy Dockser Marcus: Back at uBiome, Gabe was running the lab, but he was feeling uncertain about the company's direction, and in 2014, his job took a turn for the worse.

Gabe Foster: So I know when things really got weird. So when I had finished running the initial set of samples, when we got some of our early sequencing data back, the pipeline worked. I could take stool samples and turn them into a sequencing library to go out for sequencing and I asked Zach, like, "Okay, what are we going to do for controls? How do we know this is even working?"

Amy Dockser Marcus: This was still in uBiome's early phase. What Gave was looking for were controls, baseline samples that he could compare his results to. Controls are critical for researchers who want to make sure their results aren't out of whack. But Gabe says that at the time, there were not great controls available for the microbiome, so he was having a hard time telling if his results made any sense.

Gabe Foster: So I was asking about this and Zach straight up said, "The customers aren't going to know what this means anyway, so who cares what we give them?" And to me, that was mind-blowing, and so I pushed about standardization a lot and he said, "Fine, you go do it. Go figure it out." Well at the time, I did not have the experience or qualifications to go figure it out and I certainly tried, but I just didn't know what the heck I was doing to go from the lab to digging into the computational work and the data and he never made that easy to get. So that's when things started to get really frustrating, and I disagreed pretty strongly with Zach there and Zach really did not like being disagreed with. Disagreeing with Zach was not easy, and rarely ended well.

Amy Dockser Marcus: And it didn't end well for Gabe. He got fired in 2014, and by the way, uBiome did eventually add controls. This story was one of the things we asked Zach's lawyers about. We didn't get a response. So how did you leave the company then?

Gabe Foster: They waited until right after I came back from my wedding and we sat down on a Friday afternoon, they said, "It's time to end this contracting agreement. We're out," and asked me to sign a bunch of paperwork and I said no and that was the end of it.

Amy Dockser Marcus: Were you given any explanation on why the contract was coming to an end?

Gabe Foster: (inaudible) this just isn't working out.

Amy Dockser Marcus: Did you have a theory on what wasn't working out?

Gabe Foster: Yeah, I feel like I disagreed with Zach one too many times. I didn't have the same goals in mind anymore for the company. They were really trying to get big and get big fast. They were really trying to grow and in my mind, again the 23andMe model was to slow burn and run as lean as possible for as long as possible. But if your goal was to be a successful entrepreneur and sell out, that doesn't fit your model, does it? And if you have raised a bunch of VC money and they aggressively want to see some more money back out of this in a short amount of time, that also doesn't fit that model.

Amy Dockser Marcus: Investors had already put millions into uBiome, but Jessica and Zach wanted to grow and raise even more money. So they tried something new. That's coming up. uBiome's first test, Explorer, cost $89.00. It was a relatively affordable price that the company hoped would pull in consumers. But uBiome could charge a lot more for a product that insurers would reimburse, so it created a second test called SmartGut. Unlike Explorer, SmartGut was meant to be a clinical test, the kind that uBiome had initially stayed away from. uBiome's website called it a doctor-ordered gut health test, and said the test could provide actionable information "to help you and your doctor manage gut conditions." Some of those conditions included irritable bowel syndrome and Crohn's disease, also obesity and diabetes. The press release announcing SmartGut contained another detail, the test would be covered by U.S. health insurance for the majority of patients. Here's Jessica giving a lecture at Harvard Medical School.

Jessica Richman: We still have our consumer and research product, which is now called Explorer, that was the original product that we launched with, and we now have this clinical test which is truly a medical product. Here is a real medical test that real doctors prescribe and is processed in a real clinical lab and reimbursed by real insurance companies.

Amy Dockser Marcus: This insurance detail was important because SmartGut was expensive. uBiome billed up to $3,000.00 per test, and while that would have been a steep price for most consumers, it's less so for health insurers. If uBiome could sell a lot of these more expensive SmartGut tests, its profits could skyrocket. uBiome would also go on to sell another clinical test. It was called SmartJane, and it wasn't for the gut microbiome. Instead, it sequenced the vaginal microbiome to test for sexually transmitted diseases, like chlamydia or HPV. The type of lab tests uBiome sold don't require FDA review if they are created and used in the same lab and that lab is certified under a government program. uBiome said SmartGut and SmartJane both fell into that category. Some scientists were uncomfortable with uBiome's pivot to clinical tests. One of them was Jonathan Eisen, that microbiologist who was on the company's Scientific Advisory Board.

Jonathan Eisen: I mean in the end, from everything I've seen, they could get microbiome results but that doesn't mean that those microbiome results are medically informative or personally informative. It could have been simply a let's learn about your microbiome space, and that would have been less problematic than when they jumped into actual clinical diagnostics and claiming that there was medical relevance for what they were doing. That I think is the absolute key is to transition from let's just help people discover patterns in the microbiome, which just seems very interesting, that's what they were saying at the beginning, to we're going to actually tell you whether or not you're going to get sick or what to eat or whatever, and they just didn't have ... As far as I can tell, they had no evidence that they could do that for people.

Amy Dockser Marcus: Did you go to Zach and Jessica personally and tell them you were leaving and what did you say your reasons were for leaving when you did inform them?

Jonathan Eisen: Yeah, I mean so when I first stepped down from the Scientific Advisory Board, I just wanted out and I didn't want to even discuss it, so I just wrote to them and I said, "I just have other ... I have conflicts, I have other things I want to do, I want to move on," and I didn't even want to deal with the discussion.

Amy Dockser Marcus: But after Jonathan resigned in 2016, uBiome kept his name on their materials, and he was still listed on the company's website.

Jonathan Eisen: When they didn't remove my name from the Scientific Advisory Board I had a phone conversation with them where I said, "Look. I was being polite there. I don't want to be listed as an advisor because I don't think you're doing things correctly, and I'm not going to make a big public stink about it because some of this is private information that I said I wasn't going to disclose. But you need to remove my name from these things because I do not endorse what you're doing. In fact, I anti-endorse what you are doing," and they said, "Oh yeah yeah yeah, it's just ... We're slow about fixing those things."

Amy Dockser Marcus: But nothing changed, for a year. Finally, Jonathan took to Twitter to express his frustration and say he was not on uBiome's Scientific Advisory Board, despite what the website said. Later that day, Zach responded to the tweet apologizing, saying uBiome failed to update the website and they'll fix it now. He also added, "Amazing scientist. Contributed a ton to uBiome. We miss you." Again, we asked Jessica and Zach's lawyers about this story. They didn't respond. Some scientists who worked inside the company were also having reservations about what uBiome said its tests could do, like Elizabeth Beck.

Elizabeth Beck: I really think that the technical part of the kit, all kits we were selling was really good. We really had a product, we had a good product. But yeah, the interpretation of it was the issue.

Amy Dockser Marcus: Elizabeth was initially hired to write scientific papers for uBiome, but eventually she was asked to work on SmartJane, the test for the vaginal microbiome.

Elizabeth Beck: I did realize after a while that developing a gut microbiome test to analyze clinical disease is going to be super complicated and there's not enough data yet to do that but I felt that the vaginal microbiome would be a much better idea for clinical tests because the vaginal microbiome is a little bit more simple than the gut microbiome, it has fewer bacteria, something that is not really analyzed in regular medicine and a lot of women struggle with problems with the vaginal flora and so I thought it was going to be a much more valuable contribution to medical research than the gut microbiome at that time.

Amy Dockser Marcus: Elizabeth believed SmartJane had real potential, but generally speaking, she didn't agree with how company leadership talked about the clinical tests.

Elizabeth Beck: The company was overselling a lot of the products. The leadership had a term called precision sequencing. They said we do precision sequencing and our test is so much better than that of competitors because we do precision sequencing. I was like the scientist and like, "Can you explain to me what precision sequencing exactly is?" And I got a very vague answer. I'm like, "Well, that's not very scientific," and they asked me to write a blog post about precision sequencing and I didn't even know what it was, but I just started laughing whenever I heard that term. Internally, we're all like, "What is precision sequencing? We don't even know it and we work in a lab, we're the scientists," and it was sort of an inside joke that even we didn't know what it was. Only Jessica and Zach knew what it was.

Amy Dockser Marcus: Elizabeth wasn't the only employee who felt that things didn't quite add up at uBiome. Another was Richard Sprague. Richard is an engineer by training, and he's big in the quantified self community, people who like to excessively track their health data. Over time, he took more than 600 uBiome tests. Richard had been writing blog posts about his self-experiments, like the time he did a gut cleanse and tracked changes in his microbiome. The company took notice and created a new position for him, citizen scientist in residence. He thought that meant he could have access to uBiome's huge database and do some more studies, but there was a problem.

Richard Sprague: One of the very first things I wanted to do of course was to have access to that database, and so of course I was saying now that I'm an employee, can you please let me have access to this database? But Zach was very reluctant to let me have any access. So despite the fact that I was hired and I was inside the company there, my job title was citizen scientist in residence. I was supposed to be there to get access to all this cool data and maybe come up with interesting reports and find interesting discoveries and involve their customers in this whole process. But unfortunately I didn't really get to do that.

Amy Dockser Marcus: Well, what was the culture then?

Richard Sprague: Well, the culture was very secretive, and it was kind of disappointing to me. Because I had thought that a place like this would ... Especially since they talked the talk about citizen science and Jessica was regular giving presentations and speeches about the wonderful, amazing things that happen when you involve normal people in research, and yet asking for information about what kind of new products are we thinking about building or who are some of our bigger potential customers or what kind of questions are we getting from customers. Nobody wanted to tell me, and I discovered that was a general trend within the company, that there was a lot of this ... You felt like you weren't really allowed to ask questions.

Amy Dockser Marcus: Richard also couldn't figure out how the company was making money. He noticed that patients weren't being asked to pay for SmartGut, as long as they provided their insurance information.

Richard Sprague: They weren't "paying for it." Somebody was paying for it. So in order to be able to get a "free SmartGut," you had to give them your insurance information. Now most of us don't think twice about giving out your insurance information because it seems like anything that's paid for by insurance seems like it's free, and the uBiome documentation wasn't clear, but the one thing that was very clear, at least at the beginning, was that this won't cost you a thing.

Amy Dockser Marcus: And did any of this raise any red flags for you at the time?

Richard Sprague: Well it raised a lot of flags for me, just because I had been with the company long enough that I could see that we didn't have the infrastructure to be able to handle this sort of thing, and so my first thought on all these things is how are we going to be able to ensure that these people who are giving their insurance information, it's accurate, it's going to be something that will be reimbursable by the insurance company, et cetera, and again, now it comes down to this secrecy thing. I would ask people who might know and I wouldn't get satisfying answers and I would be told that that's not your problem, shut up, go worry about your own stuff. Don't ask us these questions.

Amy Dockser Marcus: So Richard continued doing his own work at uBiome, writing blog posts, talking to customers, but outside his own domain, he couldn't really tell what was going on at the company.

Richard Sprague: It's always tough to tell the difference between incompetence and deception, and especially at a startup, and especially at a fast-growing startup, it's really hard to tell the difference. I mean frankly an awful lot of companies are walking that fine line between very healthy optimism about what's going on and how likely it is to get things done and maybe some deception to try to convince investors and customers that things are going better than they are. uBiome really walked that line and for a lot of us, it was just hard to tell whether we had crossed that line or not.

Amy Dockser Marcus: Coming up, one of uBiome's customers makes his own discovery. In 2017, uBiome was a company to watch. It had launched two new products, SmartGut and SmartJane, and it was getting great publicity. Jessica Richman, uBiome's CEO, was a keynote speaker at a Harvard Medical School conference.

Speaker 14: I'm really, really grateful for Jessica for having come here. She ...

Amy Dockser Marcus: And Jessica was being interviewed on big conference stages by Silicon Valley investors.

Speaker 15: I'm so excited to be sitting here with Jessica, who is one of our top female founders in the (inaudible) portfolio. It's so fun as a female investor to be sitting here with a woman who is solving such a big problem and so I thought we'd kick off ...

Amy Dockser Marcus: By 2018, uBiome was raising its third round of venture capital funding, its Series C. That round would eventually amount to $59 million, and from the beginning, uBiome's clinical test, SmartGut, had some enthusiastic customers.

Damian Moskowitz: My name is (Damian Moskowitz).

Amy Dockser Marcus: Damian is a former psychotherapist, and he struggled for years with irritable bowel syndrome.

Damian Moskowitz: When you hear the phrase irritable bowel syndrome, if you don't suffer from it personally, you may think, "What's the big deal? A little bit of irritability, a little bit of indigestion?" But the reality is in its severe form, it can be extremely debilitating. It affects your energy, it affects your ability to concentrate, to function. So I was very desperate for help.

Amy Dockser Marcus: The way Damian got help was unconventional. He decided to get an experimental treatment where bacteria from a healthy person's stool is transferred into the gut of a sick person. It's sometimes called a poop transplant, although that's an oversimplification. Damian wanted to know whether this treatment was working, and he thought the uBiome test could show him.

Damian Moskowitz: The entire point of the fecal microbiota transplant is to change the composition of bacteria in one's gut and I don't necessarily trust my own subjective impressions about whether that treatment is effective, there's placebo effect and that's why I wanted to document my progress objectively and here uBiome came along, offering a way to do that.

Amy Dockser Marcus: For Damian, SmartGut gave him answers about the way his gut microbiome was changing over time, and the test was also easy to get.

Damian Moskowitz: I didn't have to go see a doctor. I didn't have to deal with my insurance company. Just click a couple buttons on the internet and voila, I receive this little box in the mail and just mail it back.

Amy Dockser Marcus: As Damian ordered more SmartGut tests and tracked his results, he started to feel less enthusiastic.

Damian Moskowitz: Personally I didn't find them useful at all. There were just a bunch of graphs and charts showing you're high on this, you're low on that, and it didn't offer me a clear sense of what the cause was of my problems nor what the appropriate treatment was.

Amy Dockser Marcus: Did you take your results to a doctor and asked the doctor to interpret them for you?

Damian Moskowitz: I did show the results to a couple of doctors and neither of them had anything to say about it. They didn't find it useful, they didn't use it to inform their treatment.

Amy Dockser Marcus: As we said in Episode One, we reached out to Jessica and Zach multiple times through their lawyers for interviews and for comment, but we never heard back. But beyond the utility of the tests, Damian became suspicious of uBiome's business practices too.

Damian Moskowitz: There were just many, many little red flags. The first is how I came to get approved for the test in the first place. I log onto their website, and they offered me a nine-item checklist, abdominal tenderness, constipation, diarrhea, irritable bowel syndrome, bloating, Crohn's disease, flatulence, ulcerative colitis, and other. At some point they added nausea and a couple other things to the list, and that was it. Then they said they would connect the patient with their network of independent healthcare professionals, and that independent healthcare professional would decide whether the patient qualifies for the test. So I completed the checklist and based solely on that checklist, a doctor approved the test for me, and the company billed my insurance company and I thought to myself, "How can this doctor know whether I truly meet criteria for medical necessity without knowing any context? Without having spoken to me, without examining me physically?"

Amy Dockser Marcus: It turns out this frictionless ordering process was by design. According to former employees we spoke to, uBiome was trying to make it easy to order its clinical tests, because insurance reimbursements were how the company was aiming to make more money.

Hilary McConaughey: I started as a clinical partnership specialist, and I was tasked with really cultivating relationships and educating healthcare providers about SmartGut.

Amy Dockser Marcus: That's Hilary McConnaughey. Hilary's job was similar to that of a salesperson. She was trying to educate doctors about the microbiome and then get doctors to order SmartGut for their patients. The company's goal was to sell as many clinical tests as possible. Hilary says she would hear Jessica and Zach talk about that a lot.

Hilary McConaughey: So we would have company-wide meetings every week and we often heard debriefings after the board meetings with investors and others, and the importance of the billable samples metric that they were asking about in those board meetings often became the basically one and only key performance indicator for our work and for the growth of SmartGut and really wanting to make sure that number was growing month over month. It felt like the directive or at least the push for that month over month growth of monthly billable samples was priority at the expense of everything else.

Amy Dockser Marcus: Hilary says that uBiome was making progress on selling the SmartGut test. They were contacting doctors over the phone, reaching them at medical conferences, but she says those tactics weren't ramping up sales fast enough.

Hilary McConaughey: That wasn't providing enough of an uptick in orders from those physicians and that was actually a huge reason why the clinical outreach transitioned from individual outreach via phone calls and conferences and just trying to connect with individual healthcare providers across the country and so uBiome wanted to take some of that ordering in-house.

Amy Dockser Marcus: The company set up what they called an external clinical care network. In other words, a group of healthcare providers, including doctors and nurse practitioners, under contract to do telemedicine for uBiome. For example, a patient could order a SmartGut test directly from uBiome's website, and behind the scenes, uBiome would connect that order with a doctor from its network. With a doctor's approval, it became easier for uBiome to bill the test to insurance. Hilary helped get that new network of healthcare providers up and running.

Hilary McConaughey: If they were interested in becoming involved, we would pay them by the hour to review tests and approve orders which would then be sent directly to uBiome's backend systems.

Amy Dockser Marcus: With this new network, the ordering process became quicker than ever.

Hilary McConaughey: And so uBiome, they were able to then create essentially this telemedicine platform, which actually required no direct contact or interaction between the patient and the telemedicine provider, and then they would approve or deny the test based on essentially the survey or form results that they read. So there was oftentimes no verbal or videoconferencing taking place prior to the ordering from the physicians.

Amy Dockser Marcus: So this was much more like a factory rather than having a personal relationship with a patient and a doctor?

Hilary McConaughey: Exactly. There was often no personal relationship whatsoever and oftentimes the patient forms that were maybe first denied by a healthcare provider were then just rerouted to another provider within uBiome's clinical care network that would approve the test.

Amy Dockser Marcus: So did you have an inkling that some of these practices might be questionable?

Hilary McConaughey: Yes. Across the team, across uBiome middle management, this felt very uncomfortable across the board. We all felt like things were getting out of hand and really spiraling in terms of the corner cutting, in terms of the finding of loopholes to really make it all work at all costs.

Amy Dockser Marcus: Hilary didn't like what uBiome was doing with billing, but she didn't think her pushback would make a difference. She ended up taking a different role at the company.

Hilary McConaughey: Really at times it was really scary, how we were either sort of misleading patients directly or misleading the providers to again get to that monthly billable sample rate that was just growing month over month. Unfortunately whenever that was raised to senior management or specifically to Zach and Jessica, it was always ignored or pushed aside and so without their explicit approval, we were sort of stuck. There was essentially no power beyond Zach and Jessica.

Amy Dockser Marcus: Damian, on the outside, was also noticing uBiome's push to get patients to order more tests.

Damian Moskowitz: They were very aggressive with their marketing. Click here and we'll resequence your test, click here and we'll upgrade it, click here and we'll give you a $20.00 Amazon gift card if you request it or submit it quickly enough. They would allow me to request repeated tests without any clinical justification, without any explanation for why I wanted six kits instead of one. Without any explanation for why I wanted the kits resequenced or reprocessed. These were literally just a click of a button without any explanation to get tons and tons of extra kits or extra analyses for which they would bill the insurance company $3,000.00 every single time.

Amy Dockser Marcus: uBiome was also sending emails about what it called upgrades, which meant an updated version of their test. You'd get new results, but without sending another sample.

Damian Moskowitz: 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." Then you click the button, they bill the insurance again for another $3,000.00. The more time I spent with uBiome, the less I trusted what they were doing, both on a scientific and an ethical level.

Amy Dockser Marcus: Damian decided to take a closer look at some insurance records. He initially had trouble accessing his own, so he started off by reviewing a friend's. Specifically, he was interested in something called CPT codes, which stands for current procedural terminology codes. Now this is a bit wonky, but stick with us. CPT codes are essential in the U.S. insurance system. They are five digit numbers that are assigned to healthcare services. Insurance companies use them to help figure out what a lab or doctor did for a patient, and whether to pay for it. Most healthcare procedures and lab tests have one CPT code, or possibly a set of codes, that should be consistent across all documentation. But that's not what Damian found when he looked at the insurance records for uBiome's SmartGut tests.

Damian Moskowitz: I went through CPT codes to see how they were billing the insurance companies. I realized they were using different CPT codes with each of their successive tests, so for example they would take a sample on one date, they would ask the patient if the patient would want to have it resequenced or reanalyzed and the patient, if they would click yes, they would then use different billing codes to bill the insurance company than the first time, so the insurance company wouldn't realize that they're using the same sample to do the same tests.

Amy Dockser Marcus: Damian also included other materials in his research.

Damian Moskowitz: I spent literally scores if not hundreds of hours going through reams of paperwork, insurance documents, everything I could find on uBiome's website, related scientific information, making spreadsheets.

Amy Dockser Marcus: What made you so curious? It's like a lot of labor that you put into this.

Damian Moskowitz: So in short, I have a strong sense of justice and I dislike waste and I dislike high health insurance costs, and I was angry when I started to realize that this house was made of cards. They're offering a test that they argue is medically sound and therefore reimbursable by insurance companies and gives people like myself hope of successful treatment for a debilitating condition. To find out that none of that is true is very upsetting to me. It gave me a lot of false hope and it was a big waste of my time.

Amy Dockser Marcus: While Damian was researching uBiome, he decided to reach out to journalists, including me.

Damian Moskowitz: So in May of 2018, I heard an interview of your colleague John Carreyrou, am I pronouncing that right? And he was discussing his expose on Theranos and I just started noticing parallels and I thought he might be interested in the story so I did a bit of googling and I discovered that you had written an article. So at that point in May of 2018, I sent an email to you and John simultaneously articulating my concerns.

Amy Dockser Marcus: By the way, that's the tip I mentioned in Episode One. This is when my reporting partner, Anna Wilde Matthews and I, started looking more closely at the company. Damian also took his complaints about uBiome to California state agencies.

Damian Moskowitz: Let me read the last paragraph of my ... I wrote an eight-page single-spaced complaint to the California Medical Board.

Amy Dockser Marcus: Damian started off by saying he wasn't seeking anything in return. He continued:

Damian Moskowitz: However, it seems to me that uBiome and those doctors are committing a massive fraud that is costing insurance companies many thousands or possibly millions of dollars. Those fraudulent charges are presumably being passed along to consumers and taxpayers in the form of increased premiums and taxes. Therefore I hope that those responsible for this fraud will be criminally prosecuted, that the complicit doctors will be disciplined, and that every penny uBiome fraudulently received from the insurance companies will be refunded.

Amy Dockser Marcus: When you reached out, did someone respond to you and call you?

Damian Moskowitz: I spoke to a detective ... Excuse me, I don't know if they're formal detectives. They're definitely investigators from the California Department of Insurance as well as the California Medical Board, and we had quite a bit of correspondence, both over the phone and over email, and the investigator from the California Department of Insurance said that he was working with other federal agencies.

Amy Dockser Marcus: The California Medical Board declined to comment, and a spokesman for the California Department of Insurance says it takes complaints from the public seriously. This year, Damian sought whistleblower status from the Securities and Exchange Commission, and if funds are recovered and other conditions are met, he could qualify for an award. But because Damian filed late, lawyers I spoke with said he likely wouldn't receive a payout. Damian wasn't the only one raising flags about uBiome's billing practices. Insurance companies were also asking questions, and then, in April of 2019.

Speaker 4: San Francisco Bay's health startup got raided by the feds today. The FBI agents showed up at uBiome. They broke down the front door and asked employees to hand over their computers. The FBI is investigating how it bills health insurers for its special gut health tests.

Amy Dockser Marcus: That's coming up after the break.

Alex Smith: You never want to be at a company that gets raided by the FBI. But when you do, you're like, "This is fascinating."

Amy Dockser Marcus: That's Alex Smith. She worked as an automation engineer at uBiome at the time of the raid. For her, that Friday morning in April started off like any other.

Alex Smith: So I'm standing in my apartment, like about to close my laptop and get into work, and my colleague calls me and literally whispering over the phone, "Don't come in." I'm like, "What do you mean, don't come in?" She's like, "The FBI is here." I'm like, "Are you serious? The FBI is at our ... What are they doing?" She's like, "I don't know. They just barged in and they're taking things and they're talking to people and just don't come in." I'm like, "Okay." So I had my now husband, then boyfriend go and go to the office and see what was up and there was a guy guarding the door and it was just like ... Oh my god, it's actually the FBI.

Amy Dockser Marcus: The FBI barged into the office in the early morning. They filled boxes with material and loaded them into a van outside the building. The agency declined to comment for this story.

Alex Smith: In a morbid way, I was fascinated and very excited. I was like, "Oh my god, the FBI came to the office." And it's just an amusing story to relay. I think I told my mom, I think I told anybody that I talked to that day. I'm like, "My company got raided by the FBI." And they're like, "What are you going to do?" I'm like, "I don't know. I'm going to keep working until I find another job," basically. I mean what else is there to do?

Amy Dockser Marcus: The raid led to big changes at uBiome. uBiome's board put Jessica and Zach on leave and the general counsel became the company's interim CEO. Soon after the raid, he convened an all-staff meeting to talk about the status of the company. A spokeswoman for the former general counsel's current employer said he was not available to respond.

Alex Smith: The general things were like Zach and Jessica have been suspended, the board has put him, the general counsel, in charge of things. We are still operating. For the time being, things were being audited. We will resume lab operations which we did. The science is solid, they're not after us about the science. There's something going on with the billing. And he was like, "I want to reiterate, it's not the science, it's the billing." And there's a twinkle in your brain, you're like, "Maybe. Maybe things will be fine."

Amy Dockser Marcus: But for Alex and a lot of other employees, things weren't fine. The company did continue to operate, but leadership changed again. A few months after the general counsel took over as interim CEO, he left the company, and some consultants took over. They also declined to comment for this story. Around that time, Alex and her colleagues got a strange email. It was a receipt of payment, but it came earlier than it should have and had less than two weeks' worth of pay.

Alex Smith: People were like, "What is this? Why have I gotten this? It's off pay schedule." Essentially people started figuring out, "Oh. If you got this email, you're probably going to get fired."

Amy Dockser Marcus: The same people who got that email also got invited to an early meeting at the office.

Alex Smith: Everybody knew it was happening. We called it a firing party, because essentially one girl, she was playing the (singing) and basically after we all got fired, we're like, "Let's go get drinks. I realize it's 10:00 in the morning, but still, we all just got fired."

Amy Dockser Marcus: Alex landed on her feet. A few months later, she got a new job at another microbiome startup.

Alex Smith: Basically for me, all of the things that I learned from my previous experience with uBiome I basically took to see what type of leadership is there, what are you looking for, what are your expectations out of a company? Like basically looking to suss out whoever is running this company, are they the same as Zach and Jessica? And if I see that again, I don't want to be any part of it. I learned how to see those type of people and avoid them as much as possible and I think for me that was super useful. Because then I don't have to deal with that.

Amy Dockser Marcus: For a while after the layoffs, uBiome continued to operate, but at a smaller scale. Shortly after the raid, the company stopped processing the clinical tests, and it pivoted back to the original product, Explorer, the test that never gave clinical takeaways in the first place. Finally in September 2019, uBiome filed for bankruptcy. The next month, it shut down its operations. But that didn't stop the criminal investigation. In March of 2021, the San Francisco U.S. Attorney's Office released a 33 page indictment, United States of America v. Zachary Apte and Jessica Richman. A federal grand jury charged Jessica and Zach with multiple crimes, including healthcare fraud and securities fraud. Overall, prosecutors alleged that from 2015 to 2019, uBiome billed insurers approximately $300 million, and insurers paid uBiome over $35 million for those claims. The same month, the U.S. Securities and Exchange Commission also filed a complaint against Jessica and Zach. The SEC alleged that they "painted a false picture of uBiome as a rapidly growing company," and that uBiome's revenue growth was "a sham." To discuss the government's charges, I wanted to bring on my reporting partner on this story, Anna Wilde Matthews. You've only heard my voice up until this point. But Anna and I worked on this podcast together. First, I asked Anna to break down what we know from the indictment.

Anna Wilde Matthews: The government is alleging a lot of stuff about uBiome. But a couple of the central things are one, that there was an upgrade scheme where uBiome was retesting the same samples, sort of soliciting patients to get upgrade tests, essentially retesting samples they had already sent rather than new samples and not really telling insurers about that, and I should say that's an allegation, and that's a problem for insurers if they were doing it because insurers want lab tests that tell you something about your health. That's the point of the lab test, to say this person has this condition and needs this treatment right now. So retesting a sample that you gave six months ago or a year ago isn't really that useful clinically and probably from an insurer's perspective, because it's like, "Well okay, we can tell what was going on with you a year ago or six months ago, but that's not really something that would motivate a doctor to do something right now, such as give you a treatment. It's just not that relevant clinically."

Amy Dockser Marcus: This alleged upgrade scheme was more or less what we heard earlier from Damian. But Anna said the indictment went further. uBiome was also allegedly misleading the doctors who were approving the patient orders of the tests.

Anna Wilde Matthews: So the indictment claims that doctors did not always understand or were not always fully informed that they were ordering a test based on a sample that might have been taken a while ago. So that's those upgrades that we mentioned earlier.

Amy Dockser Marcus: The indictment also went deeper into Jessica and Zach's alleged deception of insurance companies.

Anna Wilde Matthews: They were allegedly not telling the insurers that these upgrades were just retests of of the same old samples, and then they were also allegedly just falsifying doctor notes. So when insurers pay for a test, they want to know that it was in fact ordered by a doctor based on some sense or some reason that the patient needed the test. But if they couldn't provide that, uBiome was allegedly in some cases writing doctor notes that falsified an encounter between a patient and a doctor, a communication between a patient and a doctor that would have justified a test but in fact again allegedly didn't even happen.

Amy Dockser Marcus: So some of those doctor notes were allegedly just fake.

Anna Wilde Matthews: That's what the indictment charges, that they were essentially making up doctor notes that doctors had not signed off on using the names of the actual doctors.

Amy Dockser Marcus: What does the government say about Jessica and Zach's motives to allegedly mislead doctors and insurers?

Anna Wilde Matthews: Well in the indictment, the federal prosecutors and then also in a parallel case that's been filed by the SEC against Zach and Jessica, they allege that a central motivation for them was that they were trying to paint a good picture for investors. So they were fundraising for uBiome, trying to get millions of dollars out of venture capital firms, and to do that, they needed to be able to show that they had a growing, viable business, and the business that they were trying to show was one that would have lab tests paid for by insurers. So they wanted to show that that was happening and that it was growing, so that they had a growing number of billable samples. Again this is also alleged by the government's cases.

Amy Dockser Marcus: Do you think this story is an example of a mismatch between biotech innovation and the insurance industry?

Anna Wilde Matthews: I think that in the case of what uBiome was doing, we've talked to a number of scientists who have kind of agreed with the insurers that this really isn't of proven clinical value. So there doesn't seem to be a huge disagreement between the actual experts in the field who do not work for insurance companies and insurance companies over whether this was a clinically important treatment that needed to be paid for. I cover health insurance, which is a pretty traditional sector and is pretty highly regulated and pretty strict and pretty routinized for lack of a better term. So they have ways they do this, and you kind of have to check the boxes to get paid. And I think that it is challenging, so when you are a startup company run by people who have not dealt with the healthcare system before, just even being new can be a challenge because there are just so many rules you have to follow and so many standards you have to meet and in this case, allegedly, the company wasn't really checking those boxes or meeting those standards and to make it look like they were, they did things that again allegedly sort of crossed the line.

Amy Dockser Marcus: Throughout the reporting of the story, we have wanted to hear from Jessica and Zach themselves. We reached out to their lawyers multiple times, but didn't receive a response. We do know that in August of this year, their lawyers asked a judge to dismiss the SEC complaint against them, saying the complaint didn't contain enough detail or specifics to show that they had broken the law. Earlier this month, a judge denied that request. But there's still a lot we don't know about Jessica and Zach's perspectives on the case. That's because according to the indictment, they're fugitives, and government lawyers have said there are warrants out for their arrest. The FBI declined to comment on the case, but we do have some ideas about where Jessica and Zach may be, specifically from a court document filed last month. Lawyers for the government wrote that Jessica and Zach married in 2019. They got the marriage certified in late June 2020, and a few days later, left for Germany, where Zach is also a citizen, according to the document. In April of this year, the document says federal prosecutors received a letter from Jessica's lawyer. The lawyer said that Jessica suffered from a medical condition, which meant she couldn't travel, and that Zach was Jessica's caretaker, which meant he couldn't travel either. According to a court filing from earlier this month, Jessica and Zach's lawyers say that the couple are not fugitives and that they aren't living in Germany to avoid prosecution as the government claims. The lawyers say that after Jessica arrived in Europe, her medical condition deteriorated, and she can't travel. The lawyers say a timeline for her return to the United States depends on her recovery. Zach's German citizenship makes it unlikely he could be extradited. According to legal experts, Germany generally doesn't extradite its citizens to the U.S. Another lead was from a website called North Data, which is a search engine for European companies. Jessica and Zach's names appear on the website, associated with an address in Central Berlin. So I asked my colleague Ian Lovett, who is living in Berlin, to go by the building and see if he could find them. He said yes, and hopped on the subway. Ian brought along some pictures of Jessica and Zach.

Ian Lovett: So the building where we think Zach and Jessica may live is right at the Oranienburg Tour subway stop which is a stop in a very busy part of Central Berlin. I'm here on a very busy intersection. Not exactly an out of the way, hard to find if that's what anybody was looking for, and I'm walking up to the address now and going to look at the list of names to see if anybody with their name is listed on here. Not looking like it from a quick glance.

Amy Dockser Marcus: Ian didn't see their names on any mailboxes, and he asked a few neighbors if they recognized Jessica and Zach from their photos.

Ian Lovett: I'm looking for someone who we think might be living here and I'm wondering if ... It would have only been in the last few months, so if you have -

Speaker 22: Are you looking for a place to live?

Ian Lovett: No, I'm looking for a person. I'm trying to find a person, yeah, someone who we think might be living here. The people we are looking for are Zach Apte and Jessica Richman. You don't recognize either of them?

Speaker 23: I don't know.

Ian Lovett: Okay. Do you recognize? Do you recognize either of them?

Amy Dockser Marcus: Ian couldn't find any evidence of Jessica and Zach at that address. We also found another address in Berlin associated with Jessica and Zach's names from that same website, North Data. A man in that building said that his company acts as a postal address for various buildings. He confirmed Zach Apte was a client, but said Zach doesn't live there, and that's kind of where our story ends. As far as we know, Jessica and Zach are still not in the U.S., and there are warrants out for their arrest. But many of the former employees we talked to are still grappling with the experience they had at uBiome, like Richard Sprague. He was the guy who had taken more than 600 uBiome tests. He read the indictment, and isn't sure what to believe.

Richard Sprague: I don't think anybody, even at the very end, really believed there was fraud going on. I think that mostly, it was just disorganized. I think it's just one of those things where the company is moving quickly, a lot of things are happening at once, there was a lot of pressure to deliver, and if you don't have the processes in place to make sure that everything is handled legally and properly, a lot of things can slip through a lot of cracks.

Amy Dockser Marcus: Hilary McConnaughey, the woman who worked on getting doctors to order SmartGut tests, also read the government's case against Jessica and Zach.

Hilary McConaughey: I mean all of it was right on the nose. Everything about the billing, all of that rings true, is exactly right with sort of what I experienced either directly or indirectly during my time at uBiome.

Amy Dockser Marcus: And what do you think about the indictment calling them fugitives?

Hilary McConaughey: It's again, not surprising. It's a story that almost seems too unbelievable to be true, but here we are and if I didn't live it, I think I would be more skeptical but it certainly has been a wild ride.

Amy Dockser Marcus: And remember Gabe Foster, one of the early employees? He was fired before uBiome started selling its clinical test and dealing with insurance. After he left the company, he ended up going for a PhD, but he continued to keep an eye on his former employers.

Gabe Foster: When I was long into my graduate program, reading about all the things that happened, I was not surprised. None of it seemed out of character.

Amy Dockser Marcus: That's very interesting, I mean I guess maybe you can give us some final thoughts on just how it started and how it ended.

Gabe Foster: That's a good question. I still believe that the company as founded was a fine idea. I do. I think it was the right product at the right time. I think it could have been a really excellent little thing. I think if they had stuck with what they were doing and done it ethically, or at the very least failed gracefully in a way that everyone came out of it looking really good. I think that was all totally possible. I think that in their efforts to build a giant successful company and cash out that they pivoted to something that was clinically not realistic and not worth anything and assuming they committed the fraud they did I would say that they probably did it in an effort to keep getting big and just try to ride it out and they got stuck. It's just really disappointing because the core product, the 23andMe of poop that never was, it wasn't going to shake the foundations of science but it was a good idea and it deserved better.

Amy Dockser Marcus: uBiome's story is more than just allegations of fraud about one company. It also highlights broader questions. How can investors and consumers evaluate claims that arise from cutting edge science? Especially when researchers don't agree among themselves. Given the rapid pace of innovation, who gets to draw the line between what's achievable now and what's still an aspiration? The direction of business and biotechnology in the years ahead will depend on the answers. I'm Amy Dockser Marcus, thanks for listening.

Kate Linebaugh: That's all for today, Wednesday, November 24. The Journal is a co-production of Gimlet and The Wall Street Journal. Your hosts are Ryan Knutson and me, Kate Linebaugh. Special thinks to Amy Dockser Marcus for hosting today's episode and to Anna Wilde Matthews, Ian Lovett, and Georgi Kantchev for their reporting. This episode was produced by Rikki Novetsky with help from Willa Rubin and Kayla Stokes. It was edited by Catherine Brewer, Blythe Terrell, and Annie-Rose Strasser, with help from Stephanie Ilgenfritz, David Freeman, and Rob Rossi. The show is produced by Annie Baxter, Pia Gadkari, Rachel Humphries, Annie Minoff, Laura Morris, Afeef Nessouli, Enrique Perez de la Rosa and Sarah Platt. Our engineers are Griffin Tanner and Nathan Singhapok. Our theme music is by So Wiley. Today's version was remixed by Nathan Singhapok. Additional music this week from Catherine Anderson, Bobby Lord, and Blue Dot Sessions. Fact checking by Nicole Pezulka. We're off for the rest of the week for Thanksgiving. Thanks for listening. See you Monday.

Kate Linebaugh is the co-host of The Journal. She has worked at The Wall Street Journal for 15 years, most recently as the deputy U.S. news coverage chief. Kate started at the Journal in Hong Kong, stopping in Detroit and coming to New York in 2011. As a reporter, she covered everything from post-9/11 Afghanistan to the 2004 Asian tsunami, from Toyota's sudden acceleration recall to General Electric. She holds a bachelor degree from the University of Michigan in Ann Arbor and went back to campus in 2007 for a Knight-Wallace fellowship.

Ryan Knutson is the co-host of The Journal. Previously, he spent more than four years in the newsroom covering the wireless industry, and was responsible for a string of scoops including Verizon's $130 billion buyout of Vodafone's stake in their joint venture, Sprint and T-Mobile's never ending courtship and a hack of the 911 emergency system that spread virally on Twitter. He was also a regular author of A-heds, including one about millennials discovering TV antennas. Previously, he reported for ProPublica, PBS Frontline and OPB, the NPR affiliate station in Portland, Ore. He grew up in Beaverton, Ore. and graduated from the University of Oregon.