Who is Elizabeth Holmes? How did she commit fraud with Theranos?
The trial of Elizabeth Holmes has at least proven one truth: on some occasions, you really shouldn’t just “fake it ‘til you make it”. The fallen Silicon Valley CEO has been found guilty of conspiracy to commit fraud against investors and three charges of wire fraud.
Who is Elizabeth Holmes and how exactly did she find herself in the center of one of the most controversial white-collar crime cases in recent years?
From a celebrated self-made billionaire to a disgraced CEO facing decades of jail time, here’s the story of how Elizabeth Holmes gained millions from investors for a planned product she failed to make a reality.
Holmes made waves with Theranos
Elizabeth Holmes, who founded Theranos when she was only nineteen, had quickly risen in the biotech world in Silicon Valley. Theranos had swiftly accumulated various investors with a supposed plan to create a machine called the Edison that could test for diseases such as cancer with only a few drops of blood.
Sounds too good to be true? Well, that’s because it is. No matter how hard Holmes and her employees tried to create this miraculous machine, it never truly came to be. Problem is, Holmes had already accepted $945 million from investors.
Some of these hopeful investors include media mogul Rupert Murdoch, Oracle founder Larry Ellison, Walmart’s Walton family, and the billionaire family of former Secretary of Education Betsy DeVos.
Theranos failed to produce any real progress
After becoming an applauded billionaire and being featured in countless publications such as Forbes & Times, Holmes soon found that Theranos would fall apart. In 2015, the Wall Street Journal exposed the company for only performing less than dozen of tests on the Edison, when it in fact was said to be able to perform hundreds of varying tests.
Not only that, but these tests were revealing disappointing results with doubtful accuracy. To keep antsy investors at bay, Holmes had decided to utilize third-party manufactured devices from traditional blood testing companies.
In 2016, it was revealed that Theranos had completely wiped out two years of blood test results. Two years later, Elizabeth Holmes settled “massive fraud” charges with the Securities and Exchange Commission. However, she never admitted or denied any of the discussed allegations as part of the settlement deal. Theranos soon shut its doors not long after.
Elizabeth Holmes finds herself in court
Holmes, who was pregnant at the time, was first brought to court in 2018. However, due to her pregnancy and the pandemic, the case has been delayed up until recently. Prosecutors insisted that Holmes deliberately lied about technology she said could detect illnesses with a few drops of blood.
After four months at trial facing two starkly different accounts of the former CEO, the jury deliberated for seven days before the judge approved a partial verdict as the jurors were unable to reach an agreement.
While the prosecution was portraying Holmes as a negligent CEO only searching for investments, the defense painted a picture of a young and determined entrepreneur who truly believed she could create technology to better the world. Not only that, but Holmes’s defense also blamed her former Theranos partner and boyfriend, Ramesh “Sunny” Balwani for emotional and sexual abuse that caused the faults in Theranos.
Holmes faced eleven charges in total and was found not guilty of four charges relating to defrauding the public. However, she has been found guilty of conspiracy to commit fraud against investors and three charges of wire fraud. Although she has denied the charges, each one carries a maximum prison term of twenty years each.
What do you think about the verdicts? Was Elizabeth Holmes intentionally stealing from investors, or was she just a determined businesswoman who refused to accept her failure? Let us know your thoughts in the comments below.