San Francisco Chronicle - (Sunday)
Leader of defunct Theranos to face trial next summer
SAN JOSE — Elizabeth Holmes will go on trial next summer for allegedly defrauding investors, doctors and the public as the head of the once-heralded bloodtesting startup Theranos.
U.S. District Court Judge Edward Davila ruled Friday ruled that the trial against Holmes and former Theranos Chief Operating Officer Ramesh Balwani will start July 28, 2020.
Prosecutors allege that Holmes and Balwani deliberately misled investors, policymakers and the public about the accuracy of Theranos’ bloodtesting technologies.
The two pleaded not guilty to wire fraud and conspiracy to commit wire fraud. If convicted, they could each face maximum penalties of 20 years in prison and a $2.75 million fine, plus possible restitution, the Department of Justice said.
Holmes dropped out of Stanford University at 19 to found Theranos in 2003, pitching its technology as a cheaper way to run dozens of blood tests with just a prick of a finger and a few droplets of blood.
A notoriously secretive company, Theranos shared very little about its bloodtesting machine with the public or medical community. Holmes said she was inspired to start the company in response to her fear of needles.
She carefully crafted her image as well, wearing almost entirely black turtleneck sweaters that earned her the moniker “the next Steve Jobs” in Silicon Valley.
Financiers bought what Holmes was selling and invested hundreds of millions of dollars in the company. At one time, Theranos was worth more than $10 billion and Holmes was the nation’s youngest selfmade female billionaire.
But an investigation by the Wall Street Journal in 2015 found that Theranos’ technology was inaccurate at best, and that the company was using routine bloodtesting equipment for the vast majority of its tests. The story raised concerns about the accuracy of Theranos’ blood testing technology, which put patients at risk of having conditions either misdiagnosed or ignored.
The Journal’s investigation marked the beginning of the end of Theranos. The Department of Health and Human Services effectively banned Theranos in 2016 from doing any blood testing work at all.