Theranos CEO Holmes indicted, resigns

Federal prosecutors have indicted Elizabeth Holmes on criminal fraud charges for allegedly defrauding investors, doctors and the public as the head of the once-heralded blood-testing startup Theranos. Federal prosecutors also brought charges against the company’s former second-in-command.

Holmes, who was once considered a wunderkind of Silicon Valley, and her former Chief Operating Officer Ramesh Balwani, are charged with two counts conspiracy to commit wire fraud and nine counts of wire fraud, the US Attorney’s Office for the Northern District of California said late Friday. If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and face total fines of $2.75 million each.

Prosecutors allege that Holmes and Balwani deliberately misled in- vestors, policymakers and the public about the accuracy of Theranos’ blood tests.

As the charges were announced Friday, Theranos said Holmes would step down as chief executive and its general counsel, David Taylor, would become the company’s next CEO. Theranos laid off most of its staff earlier this year and is widely expected to file for bankruptcy. Holmes remains the company’s chairman.

The company did not immediately respond to a message seeking comment on Friday’s indictments.

Holmes, 34, founded Theranos in 2003, pitching its technology as a cheaper way to run blood tests.

But an investigation by The Wall Street Journal two years ago found that Theranos’ technology was a fraud, and that the company was using routine blood-testing equipment for the vast majority of its tests.