Why wasn't Elizabeth Holmes prosecuted?

Elizabeth Holmes - Elizabeth Holmes

Former CEO of Theranos Corporation
Holmes backstage at TechCrunch Disrupt San Francisco in 2014
(1984-02-03) February 3, 1984 (age 37)
nationality American
education Stanford University (canceled)
occupation Founder of the health technology start-up
active years 2003–2018
title Founder and former CEO, Theranos
(m. 2019)
partner Ramesh Balwani (2003-2016)

Elizabeth Anne Holmes (Born February 3, 1984 in London) is a former American businesswoman who was the founder and CEO of Theranos, a now-defunct health technology company. Theranos soared in ratings after the company claimed it revolutionized blood testing by developing testing methods that could use surprisingly small amounts of blood, such as a fingerprint. Until 2015 Forbes Holmes named youngest and richest self-made billionaire in America based on a $ 9 billion valuation of her company. Had in the next year Forbes revised its published estimate of Holmes 'net worth to zero and following revelations of possible fraud related to Theranos' claims Fortune had named her one of the "most disappointing leaders in the world".

Theranos' demise began in 2015 when a series of journalistic and regulatory investigations uncovered doubts about the company's technological claims and whether Holmes had misled investors and the government. In 2018, the US Securities and Exchange Commission accused Theranos and Holmes of misleading investors through "massive fraud" by making false or exaggerated claims about the accuracy of the company's blood testing technology. Holmes paid the charges by paying a $ 500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control over Theranos, and banned from serving as an officer or director of a public company for ten years.

In June 2018, a federal grand jury sued Holmes and former Theranos Chief Operating Officer (COO) Ramesh Balwani on nine wire fraud cases and two conspiracies to commit wire fraud for distributing blood tests with falsified results to consumers . A trial is set to begin on August 31, 2021 after being postponed four times due to the COVID-19 pandemic and her pregnancy in July.

Theranos 'credibility has been in part attributed to Holmes' personal relationships and his ability to recruit the support of influential people, including Henry Kissinger, George Shultz, James Mattis, and Betsy DeVos. Holmes had a secret romantic relationship with her COO Ramesh Balwani. After the collapse of Theranos, she married the hotel heir Billy Evans.

Holmes' career, the rise and closure of her company, and the aftermath that followed are the subject of a book Bad Blood: Secrets and Lies in a Silicon Valley Startup , of Wall street journal Reporter John Carreyrou and an HBO documentary. The inventor: In search of blood in Silicon Valley .

Early life

Elizabeth Holmes was born on February 3, 1984 in Washington, DC. Her father, Christian Rasmus Holmes IV, was vice president of Enron, an energy company that later went bankrupt following an accounting fraud scandal. He later held senior positions in government agencies such as USAID, EPA and USTDA. Her mother, Noel Anne (Daoust), served on the Congress Committee.

Holmes attended St. John's School in Houston. While in high school, she became interested in computer programming and claimed that she started her first business selling C ++ compilers to Chinese universities. Her parents had arranged tutoring in Mandarin Chinese, and while in high school, Holmes began attending Stanford University's summer Mandarin program. In 2002, Holmes visited Stanford where she studied chemical engineering and worked as a student researcher and laboratory assistant at the School of Engineering.

After finishing her freshman year of college, Holmes worked in a laboratory at the Genome Institute of Singapore testing for Severe Acute Respiratory Syndrome (SARS-CoV-1) coronavirus by taking blood samples with syringes. In 2003, she filed her first patent application for a wearable drug delivery patch. In March 2004, she graduated from the Stanford School of Engineering and used her tuition funds as seed money for a consumer health technology company.



Holmes founded Real-Time Cures in Palo Alto, California to "democratize health care". Describing her fear of needles as a motivation, Holmes tried to do blood tests on only small amounts of blood. When Holmes first proposed the idea of ​​"harvesting huge amounts of data from a few drops of blood from the fingertip" to her medical professor Phyllis Gardner at Stanford, Gardner replied, "I don't think your idea will work" and stated that it was impossible to do what Holmes claimed. Several other medical professors told Holmes the same thing. However, Holmes did not give in, and she managed to get her advisor and dean at the School of Engineering, Channing Robertson, to endorse her idea.

In 2003, Holmes renamed the company Theranos (a portmanteau for "therapy" and "diagnosis"). Robertson became the company's first board member introducing Holmes to venture capitalists.

An admirer of Apple founder Steve Jobs, Holmes purposely copied his style, often putting on a black turtleneck like Jobs. Holmes claims her mother dressed her in black turtlenecks when she was young, but a staff member said she suggested copying Jobs' famous turtleneck look from Issey Miyake in 2007.

She spoke in a deep baritone voice during most of her public appearances, though a former Theranos colleague later claimed he heard her use the voice of a typical woman in her twenties to welcome him when he was new. However, her family has claimed that her baritone voice is authentic.

Financing and Expansion

By December 2004, Holmes had raised $ 6 million to fund the company. By the end of 2010, Theranos had more than $ 92 million in venture capital. In July 2011, Holmes was introduced to former Secretary of State George Shultz. After a two-hour meeting, he joined the Theranos Board of Directors. Holmes was recognized for forming "the most famous executive in US corporate history" over the next three years.

Holmes operated Theranos in "stealth mode" with no press releases or company website until the company announced a partnership with Walgreens in September 2013 to set up blood collection centers in the store. She was interviewed for Medscape by her editor-in-chief, Eric Topol, who praised her for "this phenomenal restart in laboratory medicine". Media attention increased in 2014 when Holmes hit the Front pages of Fortune , Forbes , T: The New York Times Style Magazine and Inc. appeared. Forbes recognized Holmes as the world's youngest self-made billionaire and ranked 110th on the Forbes 400 Theranos was valued at $ 9 billion and raised more than $ 400 million in venture capital. By the end of 2014, her name had appeared on 18 US patents and 66 foreign patents. In 2015, Holmes signed agreements with the Cleveland Clinic, Capital BlueCross and AmeriHealth Caritas for the use of Theranos technology.


John Carreyrou dated Wall Street Journal launched a secret, month-long investigation of Theranos after receiving a tip from a medical expert who believed the Edison blood testing device was suspicious. Carreyrou spoke to former whistleblowers and received corporate documents. When Holmes found out about the investigation, she launched a campaign through her lawyer, David Boies, to prevent Carreyrou from disclosing the legal and financial threats to both the journal as well as for the whistleblower.

In October 2015, despite the legal threats and Boies tactics, Carreyrou released a "bombshell article" detailing how the Edison device produced inaccurate results and that the company had used off-the-shelf machines from other manufacturers for most of the tests. Carreyrou continued to feature Holmes in a series of articles and in 2018 published a book entitled " Bad Blood: Secrets and Lies in a Silicon Valley Startup " in which he detailed his investigation of Theranos.

Holmes denied all allegations, calling that journal a "tabloid" promising the company would publish data on the accuracy of its tests. She appeared on CNBC's Mad Money the same evening the article was published. Cramer said, "The article was pretty brutal," to which Holmes replied, "This is what happens when you're working to change things. First they think you're crazy, then they fight you, and then suddenly you change that." World."

In January 2016, the Centers for Medicare and Medicaid Services (CMS) sent Theranos a warning letter after an inspection of the laboratory in Newark, California revealed anomalies in staff knowledge, procedures and equipment. CMS regulators proposed a two-year ban on Holmes from owning or operating a certified clinical laboratory after the company failed to fix issues in its California laboratory in March 2016. In the Today Show said Holmes that she was "devastated, we have not caught and fixed." these problems faster "and said the laboratory would be rebuilt with the help of a new scientific and medical advisory board.

In July 2016, CMS Holmes officially banned owning, operating or directing a blood test service for a period of two years. Theranos appealed this decision to a Board of Appeal of the US Department of Health. Shortly thereafter, Walgreens ended his relationship with Theranos and closed its in-store blood collection centers. The FDA also ordered the company to cease using its capillary tube nanotainer device, one of its core inventions.

In 2017, the state of Arizona filed a lawsuit against Theranos for selling 1.5 million blood tests to Arizonans and hiding or misrepresenting key facts about those tests. In April 2017, the company closed the lawsuit by agreeing to reimburse consumers for the cost of the tests and pay $ 225,000 in fines and attorney's fees for a total of $ 4.65 million. Other reported ongoing actions include an unspecified FBI investigation and two class fraud lawsuits. Holmes denied any wrongdoing.

On May 16, 2017, around 99 percent of Theranos shareholders agreed with the company to reject all current and potential legal disputes in exchange for preferred shares. Holmes has released a portion of its equity to offset any dilution in stock value to non-participating shareholders.

In March 2018, the US Securities and Exchange Commission (SEC) accused Holmes and Theranos' former President Ramesh Balwani of fraud by stealing more than $ 700 million from investors and promoting a fake product. On March 14, 2018, Holmes closed an SEC lawsuit. Fraud allegations included the company's false claims that its technology was used by the US Department of Defense in combat situations. The company also lied when it claimed sales of $ 100 million in 2014. That year the company made just $ 100,000. The terms of Holmes' settlement included handing over voting control over Theranos, a 10 year ban on senior management positions in a public company, and a $ 500,000 fine.

At its peak in 2015, Theranos had more than 800 employees. 340 employees were laid off in October 2016 and a further 155 employees in January 2017. In April 2018, Theranos filed a WARN Act notice with the State of California, announcing plans to lay off 105 permanent employees and employ fewer than two dozen employees. Most of the remaining employees were laid off in August 2018. On September 5, 2018, the company announced that it had begun formal winding up and that the remaining cash and assets would be distributed to its creditors.

Criminal charges

On June 15, 2018, a federal grand jury sued Holmes and former Chief Operating Officer and President of Theranos, Ramesh "Sunny" Balwani, after more than two years of investigations by the US Attorney's Office for the Northern District of California in San Francisco in nine Wire fraud cases and two cases of conspiracy to commit wire fraud. Both pleaded not guilty. Prosecutors allege Holmes and Balwani had two criminal schemes, one to defraud investors and the other to defraud doctors and patients. After the indictment was passed, Holmes resigned as CEO of Theranos but remained chairman of the board of directors.

The case is US versus Holmes , 18-cr-00258, United States District Court for the Northern District of California. It is currently scheduled to begin on August 31, 2021 after being pushed back due to the COVID-19 pandemic and her pregnancy. If convicted, Holmes faces a maximum sentence of twenty years in prison and a fine of $ 250,000 plus reimbursement for any number of wire fraud cases and for any number of conspiracies.

In June 2019, Bloomberg News reported, Holmes and Balwani investigated a possible defense strategy to blame the media for the overthrow of Theranos and whether journalist John Carreyrou's coverage had unduly swayed state regulators to make a sensational story for wall street to write magazine .

Reported in October 2019 the Mercury News that Cooley LLP, Holmes 'legal team on a class action civil suit, ordered the court to cease representing her, stating that she had not paid her for services in a year and that "Given Ms. Holmes' current financial situation Cooley has no expectation that Ms. Holmes will ever pay her for her services as her attorney. "November 2019 reported The recorder That Senior District Judge H. Russel Holland, who oversaw the civil case, said he would allow Cooley to withdraw.

In February 2020, Holmes' defense asked a federal court to drop all charges against her and her co-defendant Balwani. A federal judge looked into the charges and ruled that some charges should be dropped: Since the Theranos blood tests were paid for by health insurers, no money or property was withheld from patients. The prosecutors are therefore not allowed to claim that doctors and patients are victims of fraud. However, the judge retained the 11 wire fraud charges.

In August 2020, prosecutors filed a third substitute charge, adding a twelfth fraud charge related to a patient's blood test. Holmes and her legal team responded by claiming that the new indictment violated their rights because the grand jury that handled them during the pandemic was not randomly selected from a fair cross section of the community and had access to the jury's selection papers requested. Prosecutors then asked the court to deny Holmes' motion, saying it was asking too much by suggesting "unsubstantially" that the jury had not been properly selected.

In late August 2020, the Holmes legal team filed new motions to dismiss seven of the twelve fraud charges, alleging Judge Edward Davila made a mistake regarding their obligations to Theranos investors.

In September 2020, Bloomberg News reported that Holmes was investigating a defense against "mental illness" for their criminal trial when the judge overseeing the case ruled that prosecutors could investigate Holmes.

In February 2021, federal prosecutors accused Holmes and other executives of destroying evidence in the final days of Theranos' business. Holmes' attorney argued that it was the government's fault for failing to retain critical evidence. The specific evidence in question concerned the history of the company's internal testing, including the accuracy and failure rates of Theranos' blood testing systems.


Holmes teamed up with Carlos Slim Helú in June 2015 to improve blood testing in Mexico. In October 2015, she announced #IronSisters to help women in science, technology, engineering, and math. In 2015, she helped draft and pass a law in Arizona that would allow people to get and pay for laboratory tests without the need for insurance or health care provider approval, while misrepresenting the accuracy and effectiveness of the Theranos device represents.


Theranos's board of directors and investors included many influential figures. Holmes 'first major investor was Tim Draper - a Silicon Valley venture capitalist and father of Holmes' childhood friend, Jesse Draper - who wrote Holmes a check for $ 1 million when he heard about their first pitch for the company that will be Theranos should. Theranos' pool of major investors has expanded to include Rupert Murdoch, the Walton family, the DeVos family including Betsy DeVos, the Cox family of Cox Enterprises and Carlos Slim Helú. Each of these investors lost tens to hundreds of millions of dollars when Theranos failed.

One of the earliest board members at Holmes was George Shultz. With Shultz's early involvement in helping Holmes' recruitment efforts, the Theranos board of 12 eventually included: Henry Kissinger, a former foreign secretary; William Perry, a former Secretary of Defense; James Mattis, a future Secretary of Defense; Gary Roughead, a retired US Navy admiral; Bill Frist, a former US Senator (R-TN); Sam Nunn, a former US Senator (D-GA); and former CEOs Dick Kovacevich of Wells Fargo and Riley Bechtel of Bechtel.


Before the collapse of Theranos, Holmes received widespread recognition. In 2015 she was named a member of the Fellows Board of Harvard Medical School and one of the most influential people in the world at TIME Magazine appointed. Holmes received the Under 30 Doers Award from Forbes and was placed on the list of the most powerful women in 2015. She was also from Glamor was named Woman of the Year and received an honorary degree in Humane Letters from Pepperdine University. Holmes received the Horatio Alger Award 2015, making it the youngest recipient in its history. She had previously been mentioned capital 's Economist of the Year and listed at his 40 Under 40.

After multiple journalistic, criminal and civil investigations into Theranos' business practices, she was charged with "massive fraud" by the Securities and Exchange Commission. Appointed in 2016 Fortune Holmes became one of the world's most disappointing leaders.

Personal life

Elizabeth Holmes at Stanford University, April 17, 2013

Holmes was romantically linked to tech entrepreneur Ramesh "Sunny" Balwani, a Pakistani-born Hindu who immigrated to India and then the United States. She met him in 2002 at the age of 18 when she was still in school. He was 19 years older than Holmes and was married to another woman at the time.

Balwani divorced his wife in 2002 and became romantically engaged to Holmes in 2003, around the same time Holmes dropped out of college. The couple moved into an apartment around 2005. Although Balwani didn't officially join the company as Chief Operating Officer until 2009, he previously advised Holmes behind the scenes. Holmes and Balwani ran the company together in a corporate culture of "secrecy and fear". Their romantic relationship was hidden for much of the time they ran the company together. He left Theranos in 2016 after an investigation. The circumstances of his departure are unclear; Holmes has stated that she fired him, but Balwani claims he left on his own.

Prior to the agreement in March 2018, Holmes had a 50% stake in Theranos. Forbes listed her as one of America's richest self-made women in 2015 with a net worth of $ 4.5 billion. Published in June 2016 Forbes an updated valuation of $ 800 million for Theranos, rendering Holmes' stake essentially worthless as other investors owned preferred stock and would have been paid before Holmes owned only common stock. Holmes reportedly owed Theranos $ 25 million in debt related to the exercise of options. She did not receive any company money from the agreement, nor did she sell any of her shares, including those related to the debt.

In early 2019, Holmes got engaged to William "Billy" Evans, a 27-year-old heir to the Evans Hotel Group. In mid-2019, Holmes and Evans married in a private ceremony. The couple live in San Francisco. Holmes is pregnant and the child is expected to be born in July 2021.

In the media and in popular culture

Holmes has been featured in a number of media works.

  • Author John Carreyrou published his book in May 2018 Bad Blood: Secrets and Lies in a Silicon Valley Startup .
  • As of June 2016, the film rights to John Carreyrou's book were granted Bad blood Bought from Legendary before the book was published. The film, if ever produced, would allegedly star Jennifer Lawrence, written by Vanessa Taylor and directed by Adam McKay.
  • Published in January 2019 ABC News , Nightline and Rebecca Jarvis called a podcast and documentary about the Holmes story The dropout . It contains interviews and tipping tapes from key characters, including Elizabeth Holmes; Sunny Balwani; Christian Holmes (Elizabeth's brother); Tyler Shultz (Theranos whistleblower and grandson of board member George Shultz); Theranos board members Bill Frist, Gary Roughead, Robert Kovacevich; and other. There's also an interview with Jeff Coopersmith, the attorney who represents Balwani.
  • On March 18, 2019, HBO had the documentary The Inventor: Out for Blood premiered in Silicon Valley , a two-hour documentary that premiered at Sundance Film Festival on January 24, 2019. It shows Holmes' claims and promises in The Last Years of Theranos and how the company was ultimately overthrown by the weight of many untruths. The documentary ends in 2018 when Holmes and Balwani are charged with multiple crimes.
  • Reported on April 10, 2019 Deadline that Hulu has a TV series based on the podcast The Dropout, too Called The Dropout, started. Amanda Seyfried was cast as the leading actress in March 2021.


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