Theranos founder Elizabeth Holmes found guilty


Tail Mackay

Through her eyes: Elizabeth Holmes poses for the camera confidently as the Theranos Chairman, CEO and Founder of the company.

On Jan third of this year, Theranos founder Elizabeth Holmes was officially found guilty of fraud. She was charged with 12 counts in total, and was found guilty of four.

Theranos was originally founded in 2003, with the promise of taking a tiny prick of blood, and using it for all medical diagnoses. Holmes herself had a fear of needles, and used that to boost her brand. 

The company’s tag line, “One tiny drop of blood changes everything,” was used to push their branding even further. 

Several businesses fell in love with the idea, quickly investing in the start-up. Walgreens was one of the first, solidifying their partnership with Theranos in 2013. 

“Walgreens had been a key partner for Theranos, which promised a device that could perform a wide range of blood tests, essentially replicating a full-scale lab,” Faiz Siddoqui in an article titled “Former Walgreens CFO testifies about pharmacy’s troubled partnership with blood-testing start-up, Theranos,” said. “The deal with Walgreens, regarded as Theranos’s most visible and potentially lucrative partner, involved in-store testing centers at 40 locations.”

However, it was 12 years later in 2015 when Washington Post’s, John Carreryou, wrote an expose titled “Hot Startup Theranos Has Struggled With Its Blood Test Technology.” In the article, Carreryou questioned the authenticity of their technology, called the Edison, citing how some key practices were not being followed by the company. 

“In a complaint to regulators, one Theranos employee accused the company of failing to report test results that raised questions about the precision of the Edison system,” Carreryou said.  

More red flags arose when information about Holmes’ education came to light. When the public was made aware of the fact that Holmes had no secondary education, instead being a Stanford dropout, concerns grew. 

“She was a young kid with only rudimentary engineering, training and no medical training,” said Dr. Gardner, in Carreyou’s article titled ‘A Prized Startup’s Struggles’  Their husband was a member of a Theranos advisory board and still owned shares in the company at the time of Carreyou’s publication.

As her fame grew, Holmes went on to travel to different parts of the world to showcase her device. When she went to Switzerland, in 2008 to meet with a drug company Theranos struggled to produce any results. 

“All three of her Theranos devices flickered with error messages,” Carreyou said in an article titled ‘Theranos’ Growing Pains.’ “Ms. Holmes was unfazed, blamed a minor technical glitch and continued to pitch the vast potential of her technology.”

Holmes’ perfect facade began to crack when former employees of Theranos began speaking out about their concerns with the company. These people are called whistleblowers, because they quite literally blew a whistle on the start-up. One such whistle blower was Tyler Shultz, grandson of senator, as well as key investor, Charles Shultz. 

“Using an alias Tyler Shultz contacted New York state’s public-health lab and alleged Theranos had manipulated a process known as proficiency testing, relied on by federal and state regulators to monitor the accuracy of lab tests,” Carreyou said in an article titled ‘Theranos Whistleblower Shook the Company – and His Family.’ “That was the first known regulatory complaint about Theranos’s lab practices. In early 2015, Mr. Shultz began speaking to a Journal reporter as a confidential source.”

As more former employees, like Erika Cheung, began to speak out against Holmes and Theranos, investors such as Walgreens, began to pull their money out of the project. This put more scrutiny on Holmes and her team, causing Carreyrou to publish his original article.

Soon after the publication of the article, the Food and Drug Administration visited Theranos’ operation site, and produced several inspection reports. 

Design validation did not ensure the device conforms to define user needs and intended uses,” part of the FDA’s documentation said. 

Eventually all of Theranos’ money ran out, and Holmes was charged on June 14, 2018 with two counts of conspiracy to commit wire fraud and 10 counts of wire fraud. Trading in celebrity status and stardom, Holmes now finds herself in prison for a very long time. 

Ms.Holmes, who was found guilty on three counts of wire fraud and one count of conspiracy to commit wire fraud, faces a maximum sentence of 20 years in prison for each count,” Erin Griffin in a New York Times Article titled ‘Elizabeth Holmes is set to be sentenced on Sept. 26 said.