Following one of the strangest stories from Silicon Valley in recent decades, on the seventh day of deliberation, a California jury has found Elizabeth Holmes, founder and CEO of medical tech company Theranos, guilty on three charges of fraud and one charge of conspiracy. They determined she was not guilty of a further charge of conspiracy and a further three fraud charges. The courtroom saw statements from ex-employees of Theranos, retail executives, and even a former US Defense Secretary- all witnesses to the strange tale of Theranos.
Theranos was a company that made incredible, almost unbelievable claims. Its possible ‘revolutionary’ implications on the world of healthcare made its CEO Holmes an overnight household name in the field of medicine and technology. And she played the media and investors like a fiddle. With powerful personalities like Former United States Secretary of State Henry Kissinger and Former United States Secretary of Education Betsy DeVos standing behind Holmes and her claims, Theranos soon saw a $9 billion valuation. This lead to Forbes naming Holmes the youngest and wealthiest self-made female billionaire in America. One year later, Forbes would revise Holmes’ worth to $0.
Theranos’ claims were based around the medical applications of Holmes’ ‘Edison’ machine. A blood work technology capable of performing blood tests on tiny amounts of blood, all in a machine the size of a microwave. If Holmes’ claims about the machine were true, the machine’s applications could change the medical industry forever. Experts said it all sounded impossible, because it absolutely was.
Faith in Theranos began to waver after Stanford professor John Ioannidis wrote in the Journal of the American Medical Association that none of the fantastical claims of Theranos’ medical capabilities had ever been proved or even submitted for peer review. Desperate to save face, Holmes had then US Vice President Joe Biden tour a Theranos facility in 2015. It would later be revealed the entire lab was fake, and built specifically for the purpose of a tour.
In a snowball effect of criticism and concern from professionals questioning the validity of Theranos’ claims, companies like Walgreens pulled their upcoming planned support for Theranos machines, and the Wall Street Journal reported that Theranos was using standard blood machines instead of any new technology. With mounting evidence of fraud and falsehoods at every level, Theranos was shut down and declared financially worthless by the WSJ in 2018.
While first indicted over three years ago, Holmes trial was put on hold by the pandemic and the birth of her child. Now, in the wake of her guilty verdict, Holmes faces up to 20 years in prison, as well as a $250,000 fine plus restitution for each count of wire fraud and conspiracy. Holmes continues to claim that she never misled investors.
A book about the strange story of Holmes and her company, “Bad Blood: Secrets and Lies in a Silicon Valley Startup” by journalist John Carreyrou, exposed the fascinating events leading up to the company’s closure and Holmes downfall. The book was adapted into the HBO film “The Inventor: Out for Blood in Silicon Valley.”
Holmes is expected to be sentenced soon.
