In 2015, Forbes named Elizabeth Holmes the youngest and wealthiest self-made billionaire in America. The title was given based on the $9 billion valuation of Theranos — a now defunct company that has been exposed for its false claims to have devised revolutionary blood tests that used very small amounts of blood obtained by a finger prick. As founder and CEO, Holmes is the mastermind, or rather master con-artist, behind Theranos.
Holmes’ cover story in a 2014 edition of Fortune Magazine vaulted her to fame and gave her the exposure to get Theranos moving. This momentum was soon followed Forbes, TED talks, and celebrity features. Investors such as Henry Kissinger, Rupert Murdoch, and Betsy DeVos all contributed millions of dollars to Theranos.
Employees of Theranos expressed their concerns regarding the product’s basic functions, worried that these fundamental problems never found solutions. Meanwhile, Theranos was still serving paying customers. In at least one instance, a Theranos test administered at Walgreens was hundreds of points off, which misled the cancer survivor to believe that cancer had returned. No affected customers received any sort of apology for the misconstrued results. All the while, Elizabeth Holmes was fully aware that Theranos did not work. This is the quintessence of fraud.
“How is it that you can remember every word of Jane Austen but you say ‘I don’t remember’ 600 times during a deposition,” -former Theranos employee
Last year (2018) the SEC charged Holmes and Theranos with deceiving investors by massive accounts of fraud through false or exaggerated claims about the accuracy of her blood-testing technology. Holmes settled by paying a $500,000 fine, returning shares to the company, relinquishing her voting rights and control of Theranos, and is barred from serving as an officer or director of a public company for ten years.
A federal jury has indicted Holmes and former Theranos COO (and boyfriend) Ramesh Balwani on nine counts of wire fraud, and two counts of conspiracy to commit wire fraud for distributing blood tests with falsified results to consumers.
Holmes is now facing a possible 20-year prison sentence, and it’s possible she and Balwani could be hit with even more charges.
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