On Monday, 3 January 2021, US jury found Theranos founder and CEO Elizabeth Holmes guilty of criminal fraud and she faces a possible 80-year jail term.
Holmes faced 11 counts of fraud and conspiracy but the jury could only convict her of three. While there is a likelihood of her appealing the conviction, her attorneys have not said anything officially. Reuters claimed that although she is likely to get a lower sentence, there is a possibility of her going to jail for 80 years. Here are few details you should know about Theranos:
Her company, Theranos, promised that its ‘Edison test’ could detect conditions such as cancer and diabetes quickly without the hassle of needles. This ‘innovation’ caught the interest of everyone, including Bigwigs like Henry Kissinger and Rupert Murdoch, who invested heavily.
Everything seemed to be going well for Holmes until she was exposed as a fraud nearly a year later. It turned out that the technology she touted didn’t work at all, and by 2018 the company she founded had collapsed. At her peak, in 2015, she was estimated to be worth over $4 billion.
Who is Elizabeth Holmes?
Elizabeth was born on 3 February 1984 in Washington, DC, to Christian Rasmus Holmes IV and Noel Anne. Her father was the vice president at Enron – an energy company that later went bankrupt after facing an accounting fraud scandal. He later held executive positions in some government agencies such as USAID, the EPA, and USTDA. In contrast, her mother worked as a Congressional committee staffer.
Elizabeth Holmes attended St. John’s School in Houston, and while in high school, she discovered she had an interest in computer programming. She claims to have started her first business selling C++ compilers to Chinese universities before she began homeschooling, partway through high school.
In 2002, Holmes attended Stanford, studying chemical engineering, and worked as a student researcher and laboratory assistant.
Theranos: Rise and fall
Elizabeth Holmes founded Theranos, a consumer healthcare technology company, in March 2004 after she dropped out of Stanford’s School of Engineering and then she used her tuition money to fund it.
Her motivation for starting the company was her fear of needles, which many people could relate with. Her concept was to get vast amounts of data from a few droplets of blood from the tip of a finger.
However, medical professionals didn’t seem to agree with the idea from its inception. Her medicine professor, Phyllis Gardner at Stanford, told her that he didn’t think the idea would work when she explained it to him.
These early oppositions didn’t deter Elizbeth Holmes, as she kept striving to prove that her idea was possible. And by December 2004, she had succeeded in raising $6 million to fund the firm. By the end of 2010, she had raised more than $92 million in venture capital for Theranos.
In 2015 persons started to raise concerns about Theranos’s flagship testing device – the Edison. The Wall Street Journal wrote a series of damning articles claiming that the results were unreliable and that the firm had been using commercially available machines made by other manufacturers for most of its testing.
The criticisms raised eyebrows at first before lawsuits started piling up, and partners began cutting ties. Emerging details also revealed that investors didn’t test the authenticity of the testing device; they all just liked the idea.
In 2016, US regulators banned Ms Holmes from operating a blood-testing service for two years, and in 2018 Theranos was dissolved. In March, she settled civil charges from financial regulators that she fraudulently raised $700m from investors. However, she got arrested three months later, along with Mr Balwani, her boyfriend, on criminal charges of wire fraud and conspiracy to commit wire fraud.
In 2019 Elizabeth Holmes was released on bail, and she got married to William “Billy” Evans, 27, an heir to the Evans Hotel Group chain of hotels. They had a son in July 2021.
Her trial – Elizabeth Holmes guilty
Holmes managed to avoid conviction of defrauding patients because her lawyers argued that she had not known that the results she was getting were inaccurate. However, she could not sidestep the law when it came to investors because she had allegedly made many false claims to get them to part with their money. One such claim included telling them that the US military already used Theranos machines in the field.
As of when this article was published, the court had not set a sentencing day. You may also like to read our latest article, Who is Ghislaine Maxwell? – 5 facts you should know about her.