Elizabeth Holmes And Theranos: The Founder's Fall to Imprisonment
In March 2018, Elizabeth Holmes, the founder of Theranos, was charged with wire fraud. The company she founded developed a technology that could test blood using a small sample size, but it was never proven to work. In 2015, reports surfaced that the company's technology was not only unproven, but also that the company was using other methods to test blood. This led to an investigation by the Securities and Exchange Commission and the Department of Justice. Holmes was charged with wire fraud in March 2018. She has pleaded not guilty.
1. Theranos CEO Elizabeth Holmes, the founder and face of the blood-testing startup, Theranos, is due to begin two consecutive federal prison terms on Tuesday. Holmes is facing two counts of conspiracy to commit wire and mail fraud. A Friday sentencing hearing has been delayed until February 5th when a sentencing memo is due. The delay in sentencing appears to be due to the allegedly problematic conduct of prosecutors.
Elizabeth Holmes is only 30 and started working as a biological-engineering freshman at Stanford University.
After coming out of school, she started working at Theranos as its founder and CEO. By 2007, Theranos was among the five biggest-funded startups in the company. Today, the company has raised just over seven billion in funding and counting with a value around $9 billion.
In short, Theranos does not have one product in the market -- although they have a number of other test kits that claim the ability to perform healthcare-related tests.
After the SEC began investigation into the company in 2015, Theranos' CEO Elizabeth Holmes and President Sunny Balwani were forced to step down from their executive positions.
For two years, Holmes was indicted by the office of the United States Attorney for the Southern District of California, which is run by Vivek Oberoi, another Palo Alto native.
Her lawyer has said Holmes wasn't guilty of the charges, calling the allegations puzzling and saying there were problems with logic in the case.
2. Rules For Mass-Casualty Attorneys: When In Doubt, Manage The Danger
The U.S. Army is adamant that mass casualty drills are all or nothing. Most legal jargon is written when attorneys are defending and prosecuting against a defendant.
The legal world is different. You need to define your limits when it is safe to maneuver and when it is a risk.
The risk you are creating is not helplessness. They are helpless against revolting masses trying to destroy their system of government.
You would never put a barrier across a hallway. You are never sure who might be in the way, even when you look.
When the American Army provides all the individual annealing systems that I have, I would make them come out to DOD to try them out.
They will then be better instructors for the world.
Because it will be used day-to-day.
They won't know what specific model I am buying or getting a smash.
In mass casualty events, traditional threats are still good. Your response must work for the common problem.
3. Elizabeth Holmes's Day in Federal Court
Holmes could face up to a decade behind bars. And the trial is expected to end at some point in May of 2020.
In court, she'll have to explain to a jury why Theranos ran tests to determine whether patients needed bloodwork and how she concealed the company's technology, which according to The Wall Street Journal:
"... was mainly adapted from a student project by Dr. Sunny Balwani, director of the UC San Diego Health Systems."
"Uses a proprietary treatment plan based on machine learning and visual analysis algorithms, known as SMART,"
Holmes and Brantly Geller, Theranos’ former general counsel who now works for Roche, are charged with wire fraud and other charges.
"Holmes first rose to prominence as an author of fascinating and fact-filled science-y articles," Emily Steel wrote.
"But in 2015 she faced scrutiny after a former analyst and chief scientist at her company reported she hadn't had ethics training because she 'wonted poison use to make money'."
She plea recommended Holmes get 90 years in prison, good jail time, restitution and be forced to leave the company, but will likely be sentence around 30 years in prison.
4. Founders of Theranos Forced To Admit ‘Breach of Trust’
CEO Elizabeth Holmes told The Verge that the problem was low supply of blood locally and that they did their experiments on locals instead of the test on humans, but lawyers and regulatory officials claim that unnamed Theranos employees hid the results because the technology didn’t work and the company used test results by charging fees for the services. These individuals also helped to hide Theranos’s improper manufacturing and control processes, and supplemented their financials, regulatory filings, and marketing materials to give the false portrayal that Theranos’s inventions work.
As a side note, Theranos was also sued because it advertised an easy way for home users to analyze blood work but didn't work with clinics with home users, which is something that it advertised on social media.
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