We wonder: Will Tim Draper still defend her now?
Three months after the Securities and Exchange Commission filed civil charges against former Theranos CEO Elizabeth Holmes and former COO/boyfriend Ramesh "Sunny" Balwani, federal prosecutors from the US Attorney's office in San Francisco filed criminal charges against both former executives following a two-and-a-half-year investigation that was sparked by articles published in the Wall Street Journal.
According to the Washington Post, the two were indicted on nine counts of wire fraud and two counts of conspiracy to commit wire fraud, the Department of Justice announced Friday. The indictment alleges that the two used marketing, press interviews and financial statements to defraud investors, as well as patients and doctors.
Shortly before the charges were filed, Theranos announced that Holmes would officially step down as CEO (shocking everybody who naturally had assumed she'd left the company before now) and be replaced by the firm's general counsel, who is no doubt only there to oversee the final wind-down of the company, which only has a handful of employees left.
Just days ago, we reported that Holmes was traipsing around Silicon Valley looking for investors despite having very publicly been accused of fraud by the Securities and Exchange Commission, and with most observers expecting federal prosecutors to secure an indictment in the near future. Now that day has finally arrived - a day that Holmes has, we imagine, been dreading since the day WSJ published its first in a series of stories that blew the lid off her multi-million dollar fraud.
Holmes famously dropped out of Stanford to start the company at the age of 19. She developed an irresistible pitch that centered around her fear of needles, and the possibility of more frequent early detection using a machine that could test for more than 200 illnesses with just a fingerprick. The company earned a flood of investment capital after it inked a deal to roll out its finger-stick tests at Walgreens stores in California and Arizona. The company eventually shot to a valuation of $9 billion, making Holmes a billionaire and a media celebrity. She made sure to look the part, wearing a uniform of black turtle neck with a black vest that earned her comparisons to Steve Jobs.
But in reality, Holmes's finger-stick device was unreliable and only used for a small fraction of the more than 240 tests the company offered consumers. Behind the scenes, Theranos performed most of its tests with commercial analyzers purchased from the rivals it sought to unseat.
What's worse, Theranos modified some of those analyzers in ways that their manufacturer - nor the FDA - had authorized. These modifications are believed to have led to inaccurate test results, and Theranos was eventually forced to void and refund some 76,000 Arizonans who used their service. The company's investors have included the heirs to Walmart, media mogul Rupert Murdoch, Atlanta's Cox family and the family of Betsy DeVos, the Secretary of Education. Each of them lost at least $100 million. Murdoch lost his money while allowing John Carryrou, a WSJ reporter, to continue with his investigation.
Now we wait and see if Holmes and Balwani face jail time for their actions, or merely get off with a slap on the wrist? We suspect, given the money involved and the elite-ness of the board who now look like bumbling old idiots...
That she will get more than a 'Shkreli'.
Orange is the new black turtleneck pic.twitter.com/57HVb5XXan— zerohedge (@zerohedge) June 15, 2018
Here we see Elizabeth Holmes looking at what's left of her credibility.
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Finally, here is a "brief" recap of all the fawning coverage the objective media had given to Theranos and Holmes in the years ahead of her spectacular collapse:
August 30, 2013
"Theranos: The Biggest Biotech You've Never Heard of."
San Francisco Business Times. By Ron Leuty. Here.
September 8, 2013
"Elizabeth Holmes: The Breakthrough of Instant Diagnosis."
October 9, 2013
"Just a Drop Will Do."
Pediatric News. By William Wilkoff. Here.
November 13, 2013.
"One Small Ow-eee."
PediaBlog. By Ned Ketyer MD. Here.
November 18, 2013
"Creative disruption? She's 29 and Set to Reboot Lab Medicine."
US Patent: "Systems and Methods of Sample Processing and Fluid Control in a Fluidic System."
PDF, Patent 8,742,230 B2, 80 pp.. Here.
"This invention is in the field of medical devices...portable medical devices that allow real-tie detection of analytes from a biological fluid...for providing point-of-care testing for a variety of medical applications."
"Theranos: Small Sample, Big Opportunity."
Decibio [Consultancy blog]. By Eric Lakin. Here.
"Meet Elizabeth Holmes, Silicon Valley's Latest Phenomenon"
San Jose Mercury News, by Michelle Quinn. Here.
"Theranos bringing 500 new jobs to Scottsdale's SkySong."
Phoenix Business Journal. By Angela Gonzales. Here. [SkySong is an ASU-affiliated tech park].
"Meet Elizabeth Holmes, the Youngest Female Self-made Billionaire Changing the World with Medical Technology."
Women's ILAB, by Katherine Melescuic. Here.
"This Woman's Revolutionary Idea Made Her A Billionaire — And Could Change Medicine."
Business Insider. By Kevin Loria. Here. See also June 4, 2015.
"Health Plans Deploy New Systems to Control Use of Lab Tests."
Managed Care. By Joseph Burns. Here.
Does not directly cite Theranos. Cites contrasting viewpoints on the value of direct easy inexpensive test access:
October 1, 2014
October 16, 2014
"She's America's Youngest Female Billionaire - And a Dropout."
by Rachel Crane. CNN/Money. Here. [Text & Video.]
October 27, 2014
"Theranos Due Diligence: Company Profile, SWOT Analysis, Market Opportunity."
Decibio. Consulting group profile of Theranos and its valuation and market position (73 pages; $850). Here. Table of Contents, here. Additional description here.
Here.,For further details, see here.
November 7, 2014
"Major Upside for Walgreens Stock"
InvestorPlace. By John Divine. Here.
"The single biggest catalyst for WAG stock in the future may be the company’s decision to partner with the privately held health-tech firm Theranos."
December 8, 2014
"Here's How the World's Youngest Self-Made Female Billionaire Shows People She's In Charge."
Business Insider. By Richard Feloni. Here.
December 8, 2014
"The New Yorker on the Promise, the Secrecy, and the Challenges of Super-Startup Theranos."
MedCityNews. by Meghana Keshavan. Here.
December 14, 2014
"Blood Test Innovation: Less Cost, No Big Needle"
Information Week/Healthcare. By Larry Stofko. Here.
"Can Theranos Disrupt the Clinical Lab Testing Market? An Objective Look at Advantages, Liabilities, and Challenges That Must Be Addressed."
[Pathology] Executive War College. By Dr. Robert Boorstein. [Deck] Here.