Elizabeth Holmes was a promising student who dropped out of Stanford at 19 to launch her tech start-up, Theranos. Theranos was promised to revolutionize blood testing. The company claimed that their technology could perform blood tests with smaller amounts of blood and perform tests at a faster rate. This was seen as a breakthrough in healthcare technology. In 2014, Holmes and her company were on top of the world. She was deemed the world’s youngest female self-made billionaire, and Theranos was valued at an estimated $9 billion. 

However, the moments of triumph for Holmes and Theranos were short-lived.

The entrepreneur, who secured hundreds of millions of dollars in investment for a medical device, never delivered on her promises. When Theranos’ technology fell short, Holmes covered it up and kept insisting that the machines would transform how diseases are diagnosed through blood tests. Despite her company’s hefty valuation, Holmes remained tight-lipped on how exactly Theranos’ technology worked. By 2015, the seams were coming apart and within a year, Theranos was exposed as a fake. Holmes, along with former Theranos president Ramesh Balwani, was ultimately charged by the SEC for massive fraud.

Holmes was charged with 11 counts of wire fraud and conspiracy to commit wire fraud. Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, even though, according to the government, Holmes and Balwani knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests.

In addition, Holmes and Balwani were being charged for defrauding doctors and patients by making false claims concerning Theranos’ ability to provide accurate, fast, reliable, and cheap blood tests and test results, and by omitting information concerning the limits of and problems with Theranos’ technologies. The defendants also allegedly made numerous misrepresentations to potential investors about Theranos’s financial condition and its prospects. The defendants also represented to investors that Theranos would generate over $100 million in revenue and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenue in 2015, when, in truth, the defendants knew Theranos would generate only negligible or modest revenue in 2014 and 2015. The indictment further alleged that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors. Despite the evidence of the crimes, Holmes clung to her original story and remained quiet as the Theranos scandal reached trial.

The jury convicted Holmes of 4 out of the 11 counts, the investor wire fraud conspiracy count and three substantive wire fraud counts relating to the scheme to defraud investors, including wire transfers totaling more than $140 million. Holmes faces up to 20 years in prison for each of four counts that led to a conviction in her federal fraud trial and a fine of $250,000 plus restitution.