On Friday, a federal judge disgraced the beginning of the fraud case against Theran's founder Elizabeth Holmes in July 2020. If convicted, she faces up to 20 years in prison and millions in fines.
Holmes has been indicted CBS San Francisco reports allegedly misleading investors, business partners, and patients with allegations of allegedly revolutionary blood testing equipment.
She and Sunny Balwani, her former boyfriend and Theranos president, were indicted by a large jury in eleven cases of wire fraud and conspiracy to commit wire fraud. The pair could also face fines of $ 2.75 million each.
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Holmes was considered a visionary in the sense of Steve Jobs and she mimicked his style and wore in public only a black turtleneck and black pants. She was the world's youngest self-made billionaire, according to "".
But it was all a scam. A former Theranos employee told Norah O'Donnell in "60 Minutes" that the "revolutionary technology" called Edison never really worked. Other former collaborators said that some blood samples produced conflicting and ambiguous results in a re-examination, and that Holmes lied to Walgreens when she told them that Edison was ready to treat patients, resulting in a partnership that planned to do so To house device in every shop.
Holmes and Balwani have both reached Safeway and Walgreens agreements to use Theranos test equipment in clinics in their stores.
Balwani, 53, from Atherton, was employed by Theranos from September 2009 to 2016. During this time, Balwani held various positions, including as a member of the Board of Directors of the Company, as President and as Chief Operating Officer.
According to the indictment, Holmes and Balwani used advertisements and requests to encourage and motivate doctors and doctors patients should use Theranos' blood testing laboratory, although the defendants allegedly knew that Theranos was unable to care for them To provide certain blood tests consistently accurate and reliable results.
The tests performed with the Theranos technology probably also contained inaccurate and unreliable results. The indictment alleges that the defendants used a combination of direct communication and marketing materials, statements to the media, financial reports, models and other information to cheat potential investors.
Specifically, the defendants alleged that Theranos had developed a revolutionary and proprietary analyzer known by various names, including TSPU, Edison, or Minilab
. The defendants alleged that the analyzer could be used with small blood samples taken from a wand , perform a whole series of clinical tests, and the analyzer can provide more accurate and reliable results than traditional methods, enabling faster speeds than previously possible.
The indictment further claims that Holmes and Balwani knew that many of their representations about the analyzer were wrong.
The defendants alleged to investors that Theranos had a profitable and profitable business relationship with the United States Department of Defense and that Theranos technology had entered into battle field – an allegation that was false.
"It fooled everyone, everyone," said Donnell, "60 minutes of overtime." "It had hundreds of employees from MIT, from Harvard, from Apple, and the smartest people in Silicon Valley went to work for them. They believed in her, it was not just the media, it was the people who gave her $ 900 million, I mean, there were many celebrity, very smart people who subscribed to the myth of Elizabeth Holmes. "
As O & # 39; Donnell reported on "60 Minutes," almost all media, including CBS News, bought a myth into Theranos.
The Securities and Exchange Commission filed charges of fraud against Holmes and Balwani. Holmes signed off with the SEC and agreed to pay fines and fines of $ 500,000. Balwani is fighting the prosecution.