Bad Magic | The Lawsuit | S4-E6
Bad Magic | The Lawsuit | S4-E6Update: 2024-02-19
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Enochian reinvents itself amid the revelations about its disgraced founder. But Serhat’s family strikes back.
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00:00:00
Wendry Plus subscribers can binge all episodes of Dr.
00:00:04
Death, Bad Magic, Early and Add Free.
00:00:07
Join Wendry Plus in the Wendry app, or on Apple Podcasts.
00:00:12
Things were not going well for Sarah Hutton Ruktu in the summer of 2023.
00:00:24
The man who carried out the abduction and execution of Gregory Davis had pleaded guilty and a plot that law enforcement said Sarah Hut had masterminded.
00:00:33
And the biotech company Sarah Hutton helped found Inocune biosciences, the one that prosecutors claim was part of his motivation for the hit, was failing.
00:00:44
The company, once valued at over half a billion dollars, was hemorrhaging money.
00:00:49
They desperately needed to make a change.
00:00:52
That's when one of the co-founders of Inocune, Renee Sindlev, and the CEO, Mark Dible, began a series of conversations with a health startup that they believed could brighten their prospects.
00:01:04
The company was called Jetty Cube, and it was valued at over $200 million, despite the fact that it had generated no revenue.
00:01:13
The two companies began the process of merging.
00:01:16
And in August, Inocune changed its name to Renovaro biosciences.
00:01:22
The plans seemed to work.
00:01:27
Immediately, their stock went up.
00:01:27
There was just one problem.
00:01:29
Sarah Hut's husband, William Anderson Witticand, decided to throw a massive wrench into the gears.
00:01:36
In January, he filed a lawsuit filled with explosive allegations about how Inocune was operating behind the scenes.
00:01:45
If it succeeds, it could take down the board of directors, but it also seems to threaten the entire company.
00:01:53
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00:02:31
From Wendry, I'm Laura Beale, and this is a special episode of Dr.
00:02:39
Deaf, Bad Magic.
00:02:42
When Sarah Hut's husband filed his lawsuit, one of the people watching was Nate Anderson.
00:02:53
Nate and his team at Hindenburg Research are responsible for the financial fraud investigation that exposed Sarah Hut's true origins.
00:03:01
Today, he's going to talk us through the latest chapter in the Inocune story, an insider alleging insider trading, boardroom backstabbing, and major cover-ups.
00:03:11
Nate, first off, thanks for being here and talking with us about this suit.
00:03:15
Can you start off by just briefly describing it for me?
00:03:19
Yeah.
00:03:20
The lawsuit was filed by Sarah Hut's husband and an entity that he has a stake in that owns a lot of shares of what once was called a Nokia in bioscience.
00:03:32
It's a lawsuit where they are accusing the company of fraud, accusing the company of failing to disclose key information to investors, and demanding that Renée Sinlev,
00:03:44
the chairman, Mark Diable, the CEO, and other insiders give money back to the company that the lawsuit alleges was unjustly stolen essentially.
00:03:56
And this basically, to me, reads like a spite lawsuit.
00:04:01
In my view, it's 108 pages of Sarah Hut through his husband saying, "You sued me last year, calling me a brazen fraud.
00:04:10
Why don't you guys take a look at yourselves?"
00:04:13
It's just, I looked at it and there's just such irony.
00:04:18
I mean, he's accusing the other side of fraud.
00:04:25
When I first heard about this, I was like, "It's what?"
00:04:29
Yeah.
00:04:30
No.
00:04:31
I mean, what was your reaction?
00:04:33
What was your reaction?
00:04:33
I think Sarah Hut is sitting in prison waiting for his trial for wire fraud now and the murder conspiracy.
00:04:42
And I think he's probably pretty pissed that the company sued him and essentially tried to blame everything on him.
00:04:50
So I think he's just trying to say, "No, you guys are also scumbags, and a lot of this is your fault, and you were there, and you were involved, and here's a bunch of evidence showing how you guys were enriching yourselves at the expense of shareholders,
00:05:06
and sort of harnessing lies and his own claims to make money for themselves."
00:05:11
Do you think the company itself is endangered by the suit?
00:05:16
I think the company is endangered by the prospect that the major merger announcement is in all likelihood, completely worthless,
00:05:26
that they have virtually nothing left.
00:05:29
So I think the company is in danger.
00:05:31
The lawsuit, I think, helps bring that closer to fruition, but I think that's likely an inevitability at this point.
00:05:38
So if they still own a big share of the stock, why would they do something that would hurt the company?
00:05:48
Because if the stock goes up, then presumably they make money.
00:05:55
So I'm confused by this.
00:05:56
Can you explain it to me?
00:05:59
I think part of it is allegation that the insiders were buying shares at a massive discount ahead of major news that they knew was going to send the stock up.
00:06:13
There was one example where Renee Sinlov, the chairman of the company, bought stock just days before the company announced a major merger transaction with an AI company,
00:06:26
and that transaction announcement sent the stock up over 1,000% over the course of months from its low prices.
00:06:33
So with the chairman buying shares immediately prior to the transaction with clear knowledge that was going to be announced, the allegation is that he basically enriched himself at the company's expense using this material non public information that he had.
00:06:52
That's a pretty serious allegation.
00:06:54
I wouldn't serhot and his husband have also made money off the stock.
00:06:58
Like if the whole company implodes, then nobody wins, right?
00:07:02
That's right.
00:07:03
Yeah.
00:07:04
So I do think to an extent, this is probably cutting his nose off despite his face.
00:07:11
So you mentioned Mark Dival and his name comes up over and over again in the suit.
00:07:16
We covered this some in the podcast, but at first, at first he's a big defender of serhot, and then it ends up they're suing each other.
00:07:24
Can you kind of walk me through just briefly the arc of their relationship?
00:07:32
Yeah.
00:07:32
So at first, Mark Dival and the company for that matter had just lavish praise on serhot that he was going to revolutionize medicine that he was the Michelangelo of biotech and things of that sort.
00:07:45
So for years had just been lavishing this praise on him, but then when everything came crumbling down, I think they chose to try and pin the blame on serhot.
00:07:58
Serhot is in jail, and I think they the lawsuit that they filed this was in October 2022 seemed like an effort to alleged that serhot was the brazen fraud that he had faked all the data that he was responsible for all these terrible things that had happened.
00:08:17
It doesn't seem unreasonable knowing what we know now.
00:08:20
No, I think it's probably the case.
00:08:22
I think serhot is indeed a brazen fraud, but that doesn't mean Mark Dival and Renee Sinlov aren't in a lot of white collar cases,
00:08:33
the defense for everyone else who's not that kind of key individual is almost always the play dumb defense.
00:08:41
We didn't know the data was all fake.
00:08:43
We didn't know our key shareholder and co-founder was a psycho murder magician out there, casting spells or whatever and giving quack remedies to terminal cancer patients.
00:08:54
I genuinely don't know what the justification they landed on for all this was, but I think the game is they are pretending more or less to be stone cold morons about everything that just had no idea what was going on.
00:09:08
I think serhot recognized that through the lawsuit.
00:09:13
It's like, okay, these guys are trying to pin it all on me and it wasn't all on me either, either alleging that they knew or that they themselves were engaged in some sketchy practices that resulted in where the company is today.
00:09:29
So it centers around the acquisition of this company.
00:09:33
Can you just briefly walk me through how they acquired that company and what the loss who just saying about the problems in the acquisition of the company?
00:09:46
Oh my gosh, yeah, all right, let me give it a shot at least the so around mid 2023, a no key in biosciences was in pretty dire straits almost out of cash had a world of liabilities is really close to being just an insolvent shell with tons of legal liabilities through the revelations around serhot,
00:10:11
the faking of the scientific data.
00:10:13
And a lot of just miss statements and things along the way.
00:10:17
So company was in in pretty dark times and around middle of 2023 the chairman, Renee,
00:10:28
son love began talks to merge with a company called Jedi cube or get a cube or whatever, however it's for now.
00:10:37
And the company from what we can tell didn't actually exist until it was formed in June and all they had around that time was an agreement to merge or acquire with a tiny little startup that had what they claim to be some AI technology.
00:10:58
And from what we can tell that tiny little startup itself was almost insolvent so didn't seem like it was a match made in heaven, but this Jedi cube acquired this small startup.
00:11:11
And then the deal was for Jedi cube to merge with the no key and rebrand and renew itself as a totally new AI med tech like hot company.
00:11:25
And that is exactly what happened the stock went up changed its name to Renovaro biosciences bunch of people bought it anything that can hype up this like new pivot to AI and get investors excited.
00:11:39
I think is what they were gravitating to and I know you're not an attorney, but you spend a lot of time looking at dirt on companies.
00:11:49
I like your kind of general impression about whether this seems like a strong case or not as much as I feel weird agreeing with sir hot on something.
00:11:59
I think the evidence here seems quite strong and well documented.
00:12:03
I think there's quite a bit here.
00:12:05
So are you going to keep on I'm curious are you done are you going to keep on pop and popcorn and following this or are you just an observer now.
00:12:14
No, we're going to we're going to follow the story.
00:12:16
I want to see what happens with sir hot's trial.
00:12:19
He is a pretty talented magician illusionist like can he fool a jury.
00:12:25
I'm curious to see what happens with Mark Dible and Renee's in love like two individuals that despite everything have come out thus far relatively unscathed and have just slapped a new name on what they're doing and tried to do it all over again in in not much more convincing fashion than the last time they tried this.
00:12:47
I think that's a good place to end.
00:12:49
Thanks Nate.
00:12:49
It was it was nice to talk to you.
00:12:51
You too.
00:12:52
I appreciate it.
00:12:53
Thank you.
00:12:53
All right.
00:12:53
Thanks a lot.
00:12:55
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00:16:46
After Hindenburg research exposed that Inokian scientific founder had faked all of his credentials,
00:16:59
the companies stood by the science.
00:17:02
But in 2022, they dialed that back.
00:17:05
Five months after Serhat's arrest, they admitted that he had actually faked some of the scientific data in his papers.
00:17:12
Elizabeth Bick is a scientific fraud researcher.
00:17:16
And she was one of the earliest people to notice the inconsistencies in Serhat's research.
00:17:21
She's here to talk about how those papers got published in the first place and how scientific fraud can slip under the radar.
00:17:31
Thank you, Elizabeth, for talking with me.
00:17:34
I have to say I'm a fan.
00:17:35
I'm very familiar with the work that you do, so I'm really happy to talk to you.
00:17:40
When I first started out in science writing, I was a little more naive.
00:17:45
I had this view of the peer review system as being the failsafe against any of this happening.
00:17:53
That, of course, when scientific papers are read by other people in the field, their job is to make sure that the science is sound and keeps this kind of thing from happening.
00:18:08
What's the reality of that?
00:18:11
Oh, yeah.
00:18:12
It's a tough question to answer because some of the things I'm finding you wish that a peer reviewer would have seen that.
00:18:20
And because sometimes it's so obvious.
00:18:23
The photoshopping is so obvious that somebody should have caught that.
00:18:28
But the truth is that peer reviewers are, well, it's a volunteer job.
00:18:33
People peer reviewing typically will do this on a Friday evening.
00:18:39
And when the rest of the family is doing something fun, they're still peer reviewing.
00:18:44
And so scientists are doing this unpaid as a volunteer job, and they're not really educated on catching fraud.
00:18:52
That's not really the purpose of peer review.
00:18:55
It is, it's the science good.
00:18:57
And if you assume that data is real, if you just trust that blindly, then that is a very different way of looking at the data.
00:19:04
Then if you put a different hats on and think, could this be fraud?
00:19:09
And so that is how I approach some of the papers.
00:19:12
So similarly, I feel that the fraud detection, the looking for specific problems with papers should be done by paid persons who work at public.
00:19:21
Or journals.
00:19:23
Yeah.
00:19:23
And speaking about the larger scientific community, I don't want anyone hearing this to think that this is rampant.
00:19:32
That most of scientific research out there is fake or fraud.
00:19:37
So can you give me some context in terms of the percentage of papers that you review that actually do have problems?
00:19:45
So I did a scan of 20,000 papers and I found that around 2% of those papers had really big problems that were not the result of an honest error,
00:19:56
but were the result of an intention to mislead.
00:19:59
And so that's 2% and those were obvious problems by looking at the paper.
00:20:04
So the real percentage of fraud has to be a bit higher, but I would estimate it maybe in the 5% range.
00:20:10
So what's the answer then to keeping the fraudsters out of science?
00:20:18
Do we need more scientists turn detective like you or is there some better system?
00:20:27
I'm intrigued by your idea of having a whole fraud department at a journal, but again, I don't know if that's feasible, but if you had a magic wand, how would you fix this?
00:20:38
We would hope to have more consequences for people who are caught doing fraud, but the problem is now we also have these professional scammers,
00:20:49
which we call paper mills, which are networks of people making money selling completely fake papers to authors who need to publish a paper.
00:20:58
And you can find these advertisements very openly, for example, on Facebook groups and there's whole networks of people where they advertise, do you need an authorship on a paper and give us some money and give you a paper.
00:21:12
And there's hundreds and hundreds of advertisements, probably even thousands.
00:21:16
And how much does it cost?
00:21:17
If I'm desperate and I got to publish a paper, how much does it show out for a fake scientific paper?
00:21:24
Well, do you want to be a first author, second author, a third author because, you know, first authors are tears of tears.
00:21:30
They're tears.
00:21:31
They're tears.
00:21:32
Yes.
00:21:32
I depend, like I've seen $5,000.
00:21:35
I've also seen 500.
00:21:36
I guess it depends on the quality of the paper, but a couple of hundreds to a couple of thousand dollars.
00:21:42
Yes.
00:21:43
But even then, this paper has to get past peer review.
00:21:47
Yeah, but these paper mills seem to target specific journals.
00:21:53
And again, this is very similar to a credit card fraud, where they first try $1.
00:21:58
Oh, okay, that worked.
00:22:00
Okay, let's now do a bigger amount.
00:22:02
And so they try first one paper.
00:22:04
And if that gets accepted, then they will target that specific journal and send in more.
00:22:11
It seems that some journals are even in the loop and are willing to accept these papers.
00:22:16
So it's low quality journals that accept this in general.
00:22:20
And they will look the other way and maybe even get kickback from the paper mills where the editor might get some money if they accept the papers.
00:22:30
So I want to move to the particular situation that we talked about in this particular season of Dr.
00:22:39
Death.
00:22:41
I don't think Sarah had, like, went out and bought a paper.
00:22:43
But if you could, I would like to talk about the fraud and the retraction of papers in this particular instance.
00:22:50
This was not the first that you'd heard about in Nokia and Sarah, tell me how you first heard about this particular situation.
00:22:58
I think I was contacted by a journalist asking me if I heard the story about the founder and they asked me if I had heard about it and if I could look into their papers.
00:23:09
And so there's two posters by Inokian Biosciences.
00:23:13
Scientific posters presented at two different conferences.
00:23:16
And these posters are sort of like science posters at a high school science fair.
00:23:20
And there are about two different topics.
00:23:23
In one, they use their magic technique to cure mice of hepatitis B infection.
00:23:30
And in the second poster, they use their magic technique to cure mice of COVID-19 infection.
00:23:37
And so these are very different experiments.
00:23:39
And yet one of the mouse is exactly the same photo on both posters.
00:23:44
And so there's another problem in some of the papers that Sarah has published.
00:23:49
He doesn't disclose his conflict of interest.
00:23:52
So as a scientist, when you write a scientific paper and you're funded by a particular interest group or maybe you work for a company, there's a financial advantage that you might have of publishing.
00:24:06
He works and he has founded in Inokian Biosciences.
00:24:10
And there's another co-author who works at UCLA who also is listed.
00:24:16
And both of them have patents that are very relevant to the topic of these papers.
00:24:20
But they don't disclose them.
00:24:23
And so he either forgot to include that statement, which is very unlikely because the journal will ask you what is your conflict of statement.
00:24:30
And he actually said, no, there's no conflict of interest.
00:24:34
And that seemed to be not completely true.
00:24:37
Yeah, you'd think that would be something he wouldn't forget.
00:24:41
Do you have any thoughts about the actual cure strategies that he talks about?
00:24:46
And so there's another problem in some of the papers in which he describes this therapy to treat patients who have some viral infection with another virus.
00:24:57
And I think it's to distract the immune system.
00:24:59
So in this paper, they describe this technique and he described two different patients who were magically cured with this super infection strategy.
00:25:10
So what is a COVID-19 patient who was treated with this super infection six days after their COVID-19 patient symptoms started.
00:25:20
And then he got better.
00:25:22
But I don't know, I've had COVID twice actually.
00:25:25
And you know, most of the times you recover if you're generally healthy, you will recover within a week.
00:25:32
So he started on day six and he got better.
00:25:34
Well, you know, he could have used chocolate pudding and he would forgotten better.
00:25:39
Like that is that seems to be not a very convincing evidence that the strategy of the super infection works.
00:25:46
Yes.
00:25:47
Well, based on what you saw, do you think he just made some mistakes and the science is real?
00:25:54
Or do you think the whole thing is just made up?
00:25:59
I'm not sure if the signs of inocune biosciences is real or not based on what I see of lack of disclosure of conflict of interest, a reused image of a mouse,
00:26:10
some other posters that appear to have reused images that have passed on for different experiments.
00:26:17
I'm very skeptical.
00:26:18
But I think a lot of people want to believe in some magic cure for all kinds of diseases.
00:26:25
Why do you think that is?
00:26:29
If you have a patient who has some severe disease, maybe cancer or severe infection, they will try whatever is offered to them in the hopes it will cure them.
00:26:37
And we all would be if we were in that situation, you just grab any chance that people offer to you because as humans, we want to believe in these success stories.
00:26:46
And that is the reason why a lot of people are perhaps charming who have the rights attitude to convince other people they can pull that off.
00:26:56
Yeah, that's kind of a universal quality to the doctors that we've covered in this series and even other doctors I've written about who take advantage of people.
00:27:07
And they seem to have a lot of bedside manner and charm and sadly in so many cases the patients are facing death or serious health consequences.
00:27:17
And then these men step in with promises to save them.
00:27:21
And it's also such an easy choice in a way to do experiments on people who are going to die anyways because if the treatment didn't work then they're not going to complain,
00:27:31
right?
00:27:32
Well, I just want to thank you for the work that you do to try to hold to account people who take advantage of the system and I also want to thank you for spending time talking with us.
00:27:45
Yeah, you're very welcome.
00:27:46
It was my pleasure to be here and to be talking about this topic.
00:27:50
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00:27:53
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Like our recent episode titled White Dust.
00:28:41
After a middle-aged couple failed to answer their daughter's messages and calls, the daughter drives the few hours to her parents' house to check on them.
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But after arriving and seeing both her parents' cars in the driveway, the daughter gets an uneasy feeling and just can't stomach going inside.
00:28:57
To hear the rest of that story and hear hundreds more stories like it, follow Mr.
00:29:01
Ball and Podcast on Amazon Music or wherever you get your podcasts.
00:29:05
Prime members can listen early and add free on Amazon Music.
00:29:13
From Wendry, this is a special episode of Dr.
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Deaf, Bad Magic.
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I'm your host, Laura Beale.
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Producer is Nika Singh.
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Senior producer is Russell Finch.
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Senior editor is Rachel B.
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Doyle.
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Fact checking by Jacqueline Colletti.
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Sound design and mixing by J.
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Rothman.
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Senior managing producer is Latha Pandya.
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Coordinating producer is Heather Beloga.
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Produced by Storyforce.
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Executive producers are Blyh Pagan Faust and Corey Shepard Stern for Storyforce.
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Our Executive producers are George Lavender, Marshall Louis and Jen Sargent for Wendry.
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Music by J.
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Rothman.
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