Billy Evans ( m. 2019)Partner(s)(2003–2016)Elizabeth Anne Holmes (born February 3, 1984) is an American businesswoman who founded and was the CEO of, a now-defunct company. The company soared in valuation after she and others claimed the company had revolutionized by developing testing methods that could use surprisingly small volumes of blood, such as from a, and also claimed these tests could be performed very rapidly using small automated devices the company had developed. By 2015, had named Holmes the youngest and wealthiest self-made female billionaire in America, on the basis of a $9 billion valuation of her company.
Elizabeth Holmes is accused of running a massive fraud on the rubes of Silicon Valley. REUTERS The blond schemer behind bogus blood-testing firm Theranos reportedly married a hotel heir in a Hail.
In the following year, following revelations of potential fraud about its claims, Forbes had revised its published estimate of her net worth to zero, and had named Holmes one of the 'World's Most Disappointing Leaders'.The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company's technology claims and whether Holmes had misled investors and the government. In 2018, the charged Theranos and Holmes with deceiving investors by 'massive fraud' through false or exaggerated claims about the accuracy of the company's blood-testing technology; Holmes settled the charges by paying a $500,000 fine, returning shares to the company, relinquishing her voting control of Theranos, and being barred from serving as an officer or director of a public company for ten years. In June 2018, a indicted Holmes and former Theranos chief operating officer on nine counts of and two counts of conspiracy to commit wire fraud for distributing blood tests with falsified results to consumers. A trial is set to begin in August 2020.The credibility of Theranos was in part interpreted as an effect of Holmes's personal connections and ability to recruit the support of influential people including,.
Holmes was in a relationship with her chief operating officer, Ramesh Balwani, and after the demise of Theranos, she married hotel heir Billy Evans.Holmes's career, the rise and dissolution of her company, and the subsequent fallout are the subject of a book, by the reporter, and an documentary feature film,. Contents.Early lifeHolmes was born in Her father, Christian Rasmus Holmes IV, was a vice president at, after which he held executive positions in government agencies such as, the,. Her mother, Noel Anne (Daoust), worked as a Congressional committee staffer.Holmes attended in Houston. During high school, she was interested in computer programming and claims she started her first business selling to Chinese universities. Her parents had arranged home tutoring, and partway through high school, Holmes began attending 's summer Mandarin program. In 2002, Holmes attended Stanford, where she studied and worked as a student researcher and laboratory assistant in the.After the end of her freshman year, Holmes worked in a laboratory at the and tested for through the collection of blood samples with syringes.
She filed her first patent application on a wearable drug-delivery patch in 2003. In March 2004, she dropped out of Stanford's School of Engineering and used her tuition money as seed funding for a consumer healthcare technology company. Theranos FoundingHolmes founded the company Real-Time Cures in Palo Alto, California, to 'democratize healthcare'. Holmes described her as a motivation and sought to perform blood tests using only small amounts of blood. When Holmes initially pitched the idea to reap 'vast amounts of data from a few droplets of blood derived from the tip of a finger' to her medicine professor at Stanford, Gardner responded, 'I don't think your idea is going to work', explaining it was impossible to do what Holmes was claiming could be done. Several other expert medical professors told Holmes the same thing.
However, Holmes did not relent, and she succeeded in getting her advisor and dean at the School of Engineering, to back her idea.In 2003, Holmes named the company (a of 'therapy' and 'diagnosis'). Robertson became the company's first board member and introduced Holmes to venture capitalists.Holmes was an admirer of founder, and deliberately copied his style, frequently dressing in a black turtleneck sweater, as Jobs did.
During most of her public appearances, she spoke in a deep baritone voice, although a former Theranos colleague later claimed that her natural voice was a few octaves higher. In a 2005 interview with, Holmes spoke in a much higher voice than she had in later appearances. Her family, meanwhile, has maintained that her baritone voice is authentic. Funding and expansionBy December 2004, Holmes had raised $6 million to fund the firm.
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.
After a two-hour meeting, he joined the Theranos board of directors. Holmes was recognized for forming 'the most illustrious board in U.S. Corporate history' over the next three years.Holmes operated Theranos in ' without press releases or a company website until September 2013, when the company announced a partnership with to launch in-store blood sample collection centers. Media attention increased in 2014, when Holmes appeared on the covers of, and Forbes recognized Holmes as the world's youngest self-made female billionaire and ranked her #110 on the in 2014. Theranos was valued at $9 billion and had raised more than $400 million in venture capital.
By the end of 2014, her name appeared on 18 U.S. Patents and 66 foreign patents. During 2015, Holmes established agreements with, Capital BlueCross, and AmeriHealth Caritas to use Theranos technology. Downfallof initiated a secret, months-long investigation of Theranos after he received a tip from a medical expert who thought the blood testing device seemed suspicious. Carreyrou spoke to ex-employee and obtained company documents. When Holmes learned of the investigation, she initiated a campaign through her lawyer to stop Carreyrou from publishing. She also made legal and financial threats against the Journal and the whistleblowers.In October 2015, despite Boies' legal threats and strong-arm tactics, Carreyrou published a 'bombshell article.'
The article detailed how the Edison blood testing device by Theranos gave inaccurate results, and revealed that the company had been using commercially available machines made by other manufacturers for most of its testing. Carreyrou continued to expose Holmes in a series of articles and in 2018, published a book titled, detailing his investigation of Theranos.Holmes denied all the claims, calling the newspaper a 'tabloid' and promising the company would publish data on the accuracy of its tests.
She appeared on 's the same evening the article was published. Cramer said, 'The article was pretty brutal', to which Holmes responded, 'This is what happens when you work to change things, first they think you're crazy, then they fight you, and then all of a sudden you change the world.'
In January 2016, the (CMS) sent a warning letter to Theranos after an inspection of its Newark, California laboratory uncovered irregularities with staff proficiency, procedures, and equipment. CMS regulators proposed a two-year ban on Holmes from owning or operating a lab after the company had not fixed problems in its California lab in March 2016. On, Holmes said she was 'devastated we did not catch and fix these issues faster' and said the lab would be rebuilt with help from a new scientific and medical advisory board.In July 2016, CMS officially banned Holmes from owning, operating, or directing a blood-testing service for a period of two years. Theranos appealed that decision to a appeals board.
Shortly thereafter, Walgreens ended its relationship with Theranos and closed its in-store blood collection centers. The FDA also ordered the company to cease use of its Capillary Tube Nanotainer device, one of its core inventions.In 2017, the State of Arizona filed suit against Theranos, alleging that the company had sold 1.5 million blood tests to Arizonans, while concealing or misrepresenting important facts about those tests. In April 2017, the company settled the lawsuit by agreeing to refund the cost of the tests to consumers, and to pay $225,000 in civil fines and attorney fees, for a total of $4.65 million. Other reported ongoing actions include civil and criminal investigations by the and the, an unspecified FBI investigation, and two class action fraud lawsuits. Holmes denied any wrongdoing.On May 16, 2017, approximately 99 percent of Theranos shareholders reached an agreement with the company to dismiss all current and potential litigation in exchange for shares of. Holmes released a portion of her to offset any dilution of stock value to non-participating shareholders.On March 14, 2018, Holmes settled an lawsuit. The charges of fraud included the company's false claim that its technology was being used by the U.S.
Department of Defense in combat situations. The company also lied when it claimed to have a $100 million revenue stream in 2014. That year, the company only made $100,000. The terms of Holmes' settlement included surrendering voting control of Theranos, a ban on holding an officer position in a public company for 10 years, and a $500,000 fine.At its height in 2015, Theranos had more than 800 employees. It fired 340 staff members in October 2016 and an additional 155 employees in January 2017. In April 2018, Theranos filed a notice with the State of California, announcing its plans to permanently lay off 105 employees, leaving it with 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 the process of formally dissolving, with its remaining cash and assets to be distributed to its creditors. Criminal chargesOn June 15, 2018, following an investigation by the U.S.
Attorney's Office in San Francisco that lasted more than two years, a indicted Holmes and former Theranos Chief Operating Officer and President, on nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Both pleaded not guilty. Prosecutors allege that Holmes and Balwani engaged in two criminal schemes, one to defraud investors, the other to defraud doctors and patients. After the indictment was issued, Holmes stepped down as CEO of Theranos but remained chair of the board.The case is U.S. Holmes, 18-cr-00258, and it is set to begin on July 28, 2020. They could face up to 20 years in prison if convicted.In June 2019, reported Holmes and Balwani are looking into a possible defense strategy of blaming the media for the downfall of Theranos.
The lawyers are looking into whether journalist John Carreyrou's reporting caused undue influence upon government regulatory agencies in order to write a sensational story for The Wall Street Journal.In October 2019, reported that Cooley LLP, Holmes' legal team in a class-action civil case, requested that the court allow them to stop representing her, stating that she had not paid them in a year for services, and that 'given Ms. Holmes's current financial situation, Cooley has no expectation that Ms.
Holmes will ever pay it for its services as her counsel.' In November 2019, The Recorder reported that Senior District Judge H. Russel Holland, who was overseeing the civil case, indicated that he would allow Cooley to withdraw.In February 2020, Holmes defense requested a federal court to drop all charges against her and her co-defendant Balwani. A Federal judge examined the charges and ruled that some charges should be dropped: since the Theranos blood tests were paid for by medical insurance companies, the patients were not deprived of any money or property. Prosecutors would hence not be allowed to argue that doctors and patients were fraud victims. However, the judge kept the 11 charges of wire fraud.
Promotional activitiesHolmes partnered with in June 2015 to improve blood testing in Mexico. In October 2015, she announced #IronSisters to help women in careers. In 2015, she helped to draft and pass a law in Arizona to let people obtain and pay for lab tests without requiring insurance or healthcare provider approval, while misrepresenting the accuracy and effectiveness of the Theranos device. ConnectionsTheranos's board and investors included many influential figures.
Holmes's first major investor was – Silicon Valley and father of Holmes's childhood friend – who 'cut Holmes a check' for $1 million upon hearing her initial pitch for the firm that would become Theranos. Theranos's pool of major investors expanded to include:; the; the DeVos family including; the Cox family of;. All of these investors lost tens to hundreds of millions of dollars each when Theranos folded.One of Holmes's first board members was George Shultz. With Shultz's early involvement aiding Holmes's recruitment efforts, the 12-member Theranos board eventually included:, a former;, a former;, a future secretary of defense;, a retired U.S. Navy admiral;, a former U.S. Starwhal online.
Senator (R-TN);, a former U.S. Senator (D-GA); and former CEOs of and of.RecognitionBefore the collapse of Theranos, Holmes received widespread acclaim.
In 2015, she was appointed a member of the Board of Fellows and was named one of TIME magazine's Most Influential People in the World. Holmes received the Under 30 Doers Award from Forbes and ranked on its 2015 list of the Most Powerful Women. She was also named Woman of the Year by and received an Honorary Doctor of Humane Letters degree from. Holmes was awarded the 2015, making her the youngest recipient in its history. She previously had been named Fortune 's Businessperson of the Year and listed on its 40 Under 40.Following several journalistic and criminal investigations and civil suits, regarding Theranos' business practices, she was charged with 'massive fraud' by the Securities and Exchange Commission. In 2016, Fortune named Holmes one of the World's Most Disappointing Leaders.
Personal life. Elizabeth Holmes at Stanford University, April 17, 2013Before the March 2018 settlement, Holmes held a 50% stock ownership in Theranos. Forbes listed her as one of America's Richest Self-Made Women in 2015 with a net worth of $4.5 billion.
In June 2016, Forbes released an updated valuation of $800 million for Theranos, which made Holmes's stake essentially worthless, because other investors owned preferred shares and would have been paid before Holmes, who owned only common stock. Holmes reportedly owed a $25 million debt to Theranos in connection with exercising options. She did not receive any company cash from the arrangement, nor did she sell any of her shares, including those associated with the debt.Holmes was romantically involved with technology entrepreneur Ramesh 'Sunny' Balwani, a Pakistani-born Hindu who immigrated to India and then the US. She met him in 2002 at age 18, while still in school; he was 19 years older than her and married to another woman at the time. Balwani divorced his wife in 2002 and became romantically involved with Holmes in 2003, about the same time Holmes dropped out of college, and the couple moved into an apartment around 2005. Although Balwani did not officially join the company until 2009, as chief operating officer, he was advising Holmes behind the scenes before then. Holmes and Balwani ran the company jointly in a corporate culture of 'secrecy and fear'.
He left Theranos in 2016 in the wake of investigations. The circumstances of his departure are unclear; Holmes states that she fired him, but Balwani states that he left of his own accord.In early 2019, Holmes became engaged to William 'Billy' Evans, a 27-year-old heir to the. In mid-2019, Holmes and Evans married in a private ceremony. The couple live in San Francisco. In mediaHolmes has been featured in a number of media works.In May 2018, author John Carreyrou released his book to considerable acclaim.
A movie based on the book is in development, with in the role of Holmes and serving as writer and director.In January 2019, and released a podcast and documentary about the Holmes story called The Dropout. It includes interviews and deposition tapes of key figures 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 others. There is also an interview with Jeff Coopersmith, the attorney representing Balwani.On March 18, 2019, HBO premiered the documentary, a two-hour documentary film first shown at the on January 24, 2019. It portrays the claims and promises made by Holmes in the last years of Theranos and how ultimately the company was brought down by the weight of many falsehoods. The documentary ends in 2018, with Holmes and Balwani indicted for multiple crimes. Business Insider. Retrieved September 6, 2018.
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Photographed by Jenny Hueston for The New Yorker. Photographed by Jenny Hueston.Elizabeth Holmes appeared to know exactly what she needed to do.
It was September 2017, and the situation was dire. Theranos, the blood-testing company that she had dreamed up more than a decade ago, during her freshman year at Stanford, was imploding before her very eyes. John Carreyrou, an investigative reporter at The Wall Street Journal, had spent nearly two years detailing the start-up’s various misdeeds—questioning the veracity of its lab results and the legitimacy of its core product, the Edison, a small, consumer blood-testing device that supposedly used a drop of blood to perform hundreds of medical tests. Carreyrou had even revealed that Theranos relied on third-party devices to administer its own tests. Theranos, which had raised nearly $1 billion in funding for a valuation estimated at around $9 billion, now appeared less a medical-sciences company than a house of cards.Owing largely to Carreyrou’s reporting, the fallout had been colossal, unprecedented.
Theranos was under investigation by the Securities and Exchange Commission, the Department of Justice, and the Federal Bureau of Investigation. Walgreens, its largest partner, terminated the relationship.
Forbes, which once estimated Holmes’s wealth at $4.5 billion,. The young founder, who was once compared to Steve Jobs, had recently been ” by the New York Post.
According to two former executives at the company, Theranos had as many as nine different law firms on retainer, including the formidable Boies Schiller Flexner, to handle the mess—what appeared to be the end of a long, labored, highly visible, and heinous corporate death march. But Holmes had other ideas.
Despite the chaos, she believed that Theranos could still be saved, and she had an unconventional plan for redemption. That September, according to the two former executives, Holmes asked her security detail and one of her drivers to escort her to the airport in her designated black Cadillac Escalade.
She flew first class across the country and was subsequently chauffeured to a dog breeder who supplied her with a 9-week-old Siberian husky. The puppy had long white paws, and a grey and black body.
Holmes had already picked out a name: Balto. For Holmes, the dog represented the journey that lay ahead for Theranos. As she explained to colleagues at the company’s headquarters, in Palo Alto, he was named after the world-famous sled dog who, in 1925, led a team of huskies on a dangerous, 600-mile trek from Nenana, Alaska, to remote Nome, Alaska, bearing an antitoxin that was used to fight a diphtheria outbreak. There is of Balto in New York’s Central Park, Holmes told one former employee. The metaphorical connection was obvious. In Holmes’s telling, Balto’s perseverance mirrored her own.
His voyage with the life-changing drug was not so different from her ambition. In Silicon Valley, founders and C.E.O.s often embrace a signature idiosyncrasy as a personal branding device. Steve Jobs wore the same black turtleneck every day and tended to only park in handicap spots. Mark Zuckerberg went through a phase during which he would only eat the meat of animals he had personally killed. Shigeru Miyamoto, the Nintendo video-game legend, is so obsessed with estimating the size of things that he carries around a tape measure.
It can get even weirder. Peter Thiel has expressed an interest in the restorative properties of blood transfusions from young people. Jack Dorsey drinks a strange lemon-water concoction every morning, and goes on 10-day silent retreats while wearing designer clothing and an Apple Watch. Holmes, too, had seemingly cherry-picked from her elders. She wore a black turtleneck, drank strange green juices, traveled with armed guards, and spoke in a near baritone.
In an industry full of oddballs, Holmes—a blonde WASP from the D.C. Area—seemed hell-bent on cultivating a reputation as an iconoclastic weirdo. Having Balto seemed to help fortify the image. Holmes and her attorney arrive at the San Jose federal court, January 14, 2019. By Justin Sullivan/Getty Images.Silicon Valley can often feel like a lawless place, and for good reason. Many of the people who run the largest technology companies on earth don’t often suffer the consequences of their actions.
Despite their unequivocal role in upending our democracy, Zuckerberg and Sheryl Sandberg still run Facebook. Dorsey is still the C.E.O. Of Twitter, even though he has not been forthright about the number of bots on the service, and has done almost nothing to stop the spread of hate speech on his platform. Of Tesla, Elon Musk, has been, and yet he’s still running the company.
(Musk with the S.E.C. That he would step down as chairman and pay a $20 million fine.)Holmes is that rare exception in which consequences occur.
And the public, perhaps fed up with the behavior of other tech giants (and Wall Street bankers before them), has been captivated by her downfall. Three years after Carreyrou began his investigation, Holmes has again become a figure of extraordinary pop-culture fascination—a distinct rarity for a businessperson. Her story is the subject of the HBO documentary, The Inventor, and ABC News’s podcast series, The Dropout. Bad Blood, Carreyrou’s book, has sold half a million copies and is being developed for Hollywood by Adam McKay. Jennifer Lawrence is set to Holmes.
(Disclosure: I was a consulting producer on the HBO project, which was partly based on an I wrote about Theranos nearly three years ago.)The fascination with Holmes often fixates on her extraordinary rise—her ability to convince Stanford scientists to believe her idea despite a lack of formal training; her aptitude for getting wisemen ( Henry Kissinger, James Mattis, George Schultz) to sit on her board; and her skill for obtaining early funding from eminences such as Rupert Murdoch, the Walton family, and others. But the final days of Theranos were equally chilling. After all, Holmes wasn’t just an inexperienced scientist; she was also a wild-spending fiduciary.Holmes had always enjoyed a certain lifestyle. From the early days of the company, she had insisted on flying in a private jet. As the company’s legal problems mounted, its costs skyrocketed, but Holmes had a hard time weaning herself off certain luxuries. She still had her own personal security detail, drivers, personal assistants, and a personal publicist who was on retainer for $25,000 a month, according to one of the former executives. Theranos had an indemnity agreement with Holmes and Sunny Balwani, the company’s C.O.O., with whom she had been romantically involved.
(They are no longer dating.) Theranos paid all their legal bills, which totaled millions of dollars a month, according to both executives. By late 2017, however, Holmes had begun to slightly rein in the spending. She agreed to give up her private-jet travel (not a good look) and instead downgraded to first class on commercial airlines. But given that she was flying all over the world trying to obtain more funding for Theranos, she was spending tens of thousands of dollars a month on travel. Theranos was also still paying for her mansion in Los Altos, and her team of personal assistants and drivers, who would become regular dog walkers for Balto.But there were few places she had wasted so much money as the design and monthly cost of the company’s main headquarters, which employees simply referred to as “1701,” for its street address along Page Mill Road in Palo Alto.
1701, according to two former executives, cost $1 million a month to rent. Holmes had also spent $100,000 on a single conference table.
Elsewhere in the building, Holmes had asked for another circular conference room that the former employees said “looked like the war room from Dr. Strangelove,” replete with curved glass windows, and screens that would come out of the ceiling so everyone in the room could see a presentation without having to turn their heads. But by the end of 2017, it became clear that it was financially untenable to stay in 1701, largely owing to Theranos’s legal expenditures.
The remaining employees were told they would be moving to the Theranos laboratory facility, across the bay in Newark, California. Employees who were still at Theranos at the time describe Newark as “crummy” and a “shithole.” The building was formerly home to a solar-panel maker, and it had a huge floor space. Employees were set up on the second floor, where people would sit four to a table in the open-floor plan. Holmes took the corner office with Balto.The move may have been a last-gasp attempt to save the company, but morale at Theranos was already at an all-time low. And other government agencies had started to subpoena current and former workers.
Remaining employees started to resign or were let go, almost on a daily basis, it seemed. As two former employees told me, you could go to Antonio’s Nut House, the famous Palo Alto bar, any night of the week and there would reliably be a goodbye gathering for at least one Theranos employee.Yet through all of this, former employees of the company have told me, Holmes had a bizarre way of acting like nothing was wrong. Even more peculiarly, she appeared happy. “The company is falling apart, there are countless indictments piling up, employees are leaving in droves, and Elizabeth is just weirdly chipper,” a former senior executive told me.
One former board member also noted that Holmes would come to board meetings “chirpy” and acting as if everything was “great.” She would walk up to people in the office who could have just testified in front of the S.E.C., or been questioned by lawyers at the F.D.A., and she would give them a hug and ask how they were doing. She was so confident that the company would be fine, executives who worked with her said, that she enrolled Balto in a search-and-rescue program. Holmes spent weekends training him to find people in an emergency. Unfortunately, huskies are not bred for rescue; they are long-distance runners, and Balto failed out.For years, Holmes had relished in the ritual of giving speeches to the employees. When Balwani worked at Theranos, the speeches ended with chants. Some were positive, and some were more famously negative, such as when employees in lab coats would chant “fuck you” to a competitor or journalist. But such rhetoric was usually followed by excited cheers and roars.
One day in late December 2017, Holmes showed up at the Newark building and held an all-hands meeting. She appeared excited beyond restraint. Brimming with enthusiasm, she told her employees that Fortress Investment Group, one of the world’s largest private investment companies, had agreed to offer a $100 million loan that would allow the company to survive.
But Holmes didn’t appear to receive the response that she craved from her colleagues. One executive who was there told me the room was silent. After an uncomfortable beat, Holmes said, “Does anyone have any questions?” Again, nothing. Just a bristling silence. By this point, “The morale had been completely drained out of the company,” the employee explained. Months later, Holmes was charged with 11 criminal felony counts, including wire fraud and conspiracy.
Theranos was essentially gutted by the spring of 2018. It shuttered in September 2018, one year after Holmes adopted Balto.
Fortress got ownership of all of Theranos’s patents. The $900 million she had raised was up in smoke. Holmes at the lab in Palo Alto, 2015. By Carlos Chavarr/The New York Times/Redux.Since Theranos’s collapse, observers have wondered how Holmes kept the company going for so long—how she was able to convince those scientists, investors, and colleagues that her quixotic idea for a portable, revolutionary blood-testing technology could somehow come to fruition.
Recently, I posed a similar question to a former Theranos board member: how did the board of directors, composed of such accomplished people, not stop her. This person admitted that board members asked tough questions but were fed contrived answers. (Notably, the board was stacked with dignitaries, not scientists.) After the Journal broke the news that the company was being investigated, the board suggested that Holmes take the Theranos blood test and compare it with results from two other competing labs and one university lab, this person said. If all the results were the same, Theranos could prove to regulators and the media, so went the logic, that their blood-testing products worked perfectly. If the tests showed that Theranos’s results were off, the board suggested that Holmes could direct the company’s considerable raised capital toward fixing the problem.Holmes agreed to the trial but then withheld the results, the former board member told me. When the board asked about the findings, Holmes seemed to offer a series of obfuscations. Sometimes she would say she was waiting on results; at other times, she said there had been problems with the tests.
Eventually, this got heated. At one meeting, according to the former board member, a Theranos employee presented financials that indicated that a Theranos lab in Arizona had not generated the revenues that Holmes had communicated to her directors. This was one of the few times where board members criticized their C.E.O., this person said.
One board member was visibly irate; it appeared that Holmes had been deceptive. Soon after, Holmes shook up the board.
Holmes will almost certainly face consequences, but it may take a while. Justice Department officials, according to a filing from January 2019, are combing through between 16 and 17 million pages of documents. And there could be more charges filed against Holmes and Balwani, and even other people close to them. Assistant U.S. Attorney John C.
Bostic said in court recently that the “story is bigger than what’s captured in the original indictment.” And that it “doesn’t capture all the criminal conduct” that the investigation has uncovered so far. Holmes and Balwani have stated that the charges are baseless. Theranos represented a business failure, according to one line of exculpatory logic, but it was not created to rip off investors or mislead consumers—it wasn’t actual fraud. Also, according to another argument, neither of them actually made any money from Theranos. But their lifestyles were partly funded by the company. Holmes’s travel, security details, and publicists were all paid for by Theranos. Meals, clothing, and other social activities were almost always expensed.
As one of the former employees said to me, “Someone had to be paying for all those Birkin bags.” This employee said that Holmes’s expenses were somewhat of a joke at the company. “The company paid for everything,” they said. “She would submit her miles if she drove the six miles to her house in Los Altos.” The employee said that the only time Holmes evidenced defeat during Theranos’s collapse was when the company cut her off financially, after the criminal charges were filed. “She lost her cool. She had a fit,” they said. “She had to give up the house in Los Altos.”When I asked the former executive close to Holmes if she has come to regret what happened, the response surprised me.
“Elizabeth sees herself as the victim,” this person said. “She blames John Carreyrou, she blames David Boies, and she blames Heather King.” Boies, the star lawyer, had sat on Theranos’s board, and represented the company during the Carreyrou crisis. King, Theranos’s general counsel for 15 months, overlapped with this period. (King now works at Boies’s firm.) Holmes, according to the former employees, blames the lawyers for giving her bad advice, and their inability to contain the bad press stemming from Carreyrou’s reporting. According to this person, Holmes thinks that she could have somehow convinced a Pulitzer Prize–winning reporter into believing that Theranos was going to change the world despite the fact that its core technology didn’t work.
“She often confuses the message for the messenger,” the former employee told me.When I asked Carreyrou what he thought about this theory, he told me: “I just reported the facts. If there had been nothing to my reporting, federal prosecutors wouldn’t have brought criminal fraud charges and those charges wouldn’t be supported by 17 million pages of evidence.” (Boies and King declined to comment, citing bar obligations. Neither Holmes nor her counsel responded to requests for comment.)In his book, Carreyrou muses about an oft-raised question regarding Holmes. Was she just a young person who got in over her head?
Or, more dramatically, is something more serious afoot. Is she a sociopath? “I’ll leave it to the psychologists to decide whether Holmes fits the clinical profile,” he writes, “but there’s no question that her moral compass was badly askew.” Former employees raise this question with frequency. One pointed to a formative experience: Holmes’s father, Christian, was an executive at Enron, and the family’s finances were affected by its collapse. Did Holmes, scarred by this experience, vow to revive the family’s fortunes at all cost?
Was she a hustler or a con artist, or merely a staggering Mr. “One of Elizabeth’s superpowers is she never looks back,” this person said.