It was not so long ago that we appreciated Elizabeth Holmes, now the infamous founder of the blood testing company Theranos. She was a self-made billionaire who, with a fortune of $ 4.5 billion, founded the company by her revolutionary idea to diagnose diseases in the blood. Instead of taking several vials, he thought that a simple drop of blood from one fingertip could diagnose thousands of malformations. She was fond of Silicon Valley with crème de la crème. She was on the magazine cover. He was often compared to Steve Jobs. It was then revealed that all of this was allegedly a hoax. The prick of a blood test doesn’t work, probably never worked, and he kept it a secret. Now, he has been accused of criminal fraud and prosecutors are trying to get to the root of his motivation to cheat investors, partners, customers and the public.
Federal prosecutors in California want to hear about all the money and worship Holmes had at the height of Theranos’ success. Prosecutors want to hear from patients in Theranos who got incorrect results from their tests. They also want to uncover internal Theranos emails that allegedly prove that the company was actively trying to evade laboratory inspectors. In June 2018, the Northern District of California’s US Attorney’s Office accused Holmes and the former president and COO of Theranos, Ramesh “Sunny” Balwani, of misleading investors and patients about the technology behind Theranos’ blood tests. The case has been delayed several times due to the coronavirus epidemic. Holmes and Balwani plead not guilty to the charges against them.
The “Wall Street Journal” broke the news about faulty blood tests that Theranos was returning in 2015. Three years after the scandal, Theranos closed after the scandal.
The prosecution alleges that the motivation behind Holmes’s crime was to maintain his fame and wealth. He had a six-figure salary, traveled on private jets, lived in luxury hotels. She lived in an expensive house and drove a luxury SUV. He had many personal assistants at his beck and call. Allegedly, the lawyers would also present the argument that all these things, this situation, were important to him and he monitored the daily news outlets to build and advance his image.
Holmes’s legal team mentioned to prosecutors that his salary was lower than some of Theranos’ other executives and was absolutely modest compared to the CEO’s salary at other multi-billion dollar companies.
Prosecutors have internal Theranos emails hoping to show a clear intent to defraud. In one, Holmes asks “If the path was cemented to walk in and down the auditors, we avoid areas that cannot be accessed.” Another email suggests that Theranos’ lab director wrote in November 2014: “I am feeling pressured for results that I cannot believe.” Balwani wrote an email to Holmes the next day stating that the lab director should be fired. He quit the job a month later. He was replaced by Balwani’s dermatologist, who stayed only for laboratory inspection as his main focus was his dermatology practice. Dermatologists were not board-certified nor did they have degrees in pathology or laboratory science. Holmes and his legal team are reportedly trying to keep a spreadsheet of text messages sent between him and Balwani outside the court.
Prosecutors have also allegedly been asked to allow the judge to present evidence of the real-life consequences of the alleged crimes of Holmes, Balwani and Theranos. In an email included in a court filing, a doctor allegedly told a sales executive of Theranos in August 2014 that the results of a Theranos blood test led him to believe that one of his patients was having an abortion. A competitive test and ultrasound revealed that she was six weeks pregnant. The doctor’s correspondence about the incident was sent to two colleagues of the sales executive to explain how bad it could be for Theranos, especially if the drug, which is dangerous for pregnant women, was prescribed. Court filings suggest that the message was sent to Holmes and Balwani. Holmes ‘attorneys say that no patient was physically harmed by the results of Theranos’ test. They also claim that the emotional impact on patients who have received inaccurate test results is not relevant in a court case about financial fraud.
Theranos extracted two-year trial results from its proprietary Edison machines in March 2016 in an effort to avoid restrictions from the Centers for Medicare & Medicaid Services. Prosecutors want to present zero test results to gamblers. Holmes’s legal team is arguing once again that they are not relevant in the case of financial fraud.