Remember the story of Theranos and Elizabeth Holmes

Elizabeth Holmes was sentenced to 11 years in prison for defrauding investors in a blood testing scheme. Her sentence will begin to be served on May 27, remember the case.

Holmes’ journey began in 2003, when she, aged 19, dropped out of her chemistry course at Stanford University and started her company Theranos. Theranos’ main selling point was a supposedly quick and accurate blood test done with a small amount of blood taken from the fingertip.

With an abundance of investors betting on Theranos, the company was soon worth millions. In 2009, Theranos announces another major turning point in their journey, the addition of Ramesh “Sunny” Balwani as Chief Operating Officer and President of the company, it was later discovered that Sunny and Holmes were also romantically involved.

Theranos begins to gain visibility in the media in 2013, when a major partnership between the company and the pharmaceutical chain is announced. walgreens, with its first wellness center in the unit of walgreens in Palo Alto, California.

Holmes also began to gain media attention, she began to appear in magazines, interviews and social networks, often with her hair tied up and wearing a long-sleeved shirt with a high collar, something similar to what Steve Jobs wore, which even more enshrined as “the new Steve Jobs” and “the revelation of Silicon Valley” – considered a hub of the technology industry. In 2014, she made the cover of Forbes magazine, named as one of the richest women in America, with a fortune valued at US$4.5 billion (about R$22.4 billion), and 50% of Theranos shares.

2015 was the year that marked the beginning of the end for Theranos. The year started great for the company, the FDA (the government agency that controls food, supplements, medicines, cosmetics, medical equipment, biological materials and products related to human blood) allowed Theranos to be tested for the Herpes simplex virus 1. However, the journalist John Carreyrou, from the American newspaper Wall Streetbegan publishing a series of articles investigating the company.

The first was one claiming that only 240 of the tests were done by Theranos machines, the other tests were done by common commercial machines. Another claim was that the tests used blood drawn from the arm in the traditional way, not the few drops that Theranos claimed to need. The company denied the allegations of Wall Streetclaiming that they used the traditional way of drawing blood due to pressure from the FDA.

Holmes increased his series of interviews to clear Theranos’ name, but in the same year: the FDA published two reports that highlighted different concerns regarding the company, among them the bottle that was placed as an “unclarified medical device”; Henry Kissinger and George Shultz are transferred from the board and relocated to a new area of ​​directors, while a separate medical board is also created; the company Safeway interrupts the US$350 million (about 1.7 billion) partnership.

In January 2016, the feds began their move, sending a letter warning that the California lab had not met expected standards, thereby putting its patients in “immediate danger; Theranos would have 10 days to respond to the letter – concerns were not addressed, subsequently the feds threatened to close the company’s labs. This was enough to make the walgreens end the partnership between them.

In May 2016, Sunny from the company. He was replaced by Fabrizio Bonanni, William Foege and Richard Kovacevich.

In June 2016, Forbes goes back, and publishes an article saying that Holmes has no fortune, and that Theranos is really worth around US$800 million (around R$3.9 million). In one part of the article, Forbes published:

“(…) Today, FORBES is lowering our estimate of her (Elizabeth Holmes) wealth to nothing. Theranos has no comments. Our estimate for Holmes’ wealth is based entirely on her 50% stake in Theranos.”

In July 2016, the feds took away the license to operate the California laboratory and Holmes was banned for two years from running laboratories for blood tests. This didn’t stop Holmes from trying to circumvent the decision by trying to invest in research and test development with the miniLab, a mini test lab.

In October 2016, the series of lawsuits begins, both by investors and by the Walgreens. And with that, the dismissal of the company’s employees; in January 2017, 50% of employees had already been laid off. Employees started giving interviews about their work situations.

In 2017, Theranos begins settling lawsuits, as well as agreeing to pay damages to the feds and the state of Arizona – for misleadingly marketing the blood test to consumers in the state.

In March 2018, Holmes and Sunny are formally charged with fraud, and the series of trials begins.

Theranos still tried to continue running, with Holmes stepping down as CEO to David Taylor to take over, but it was soon dissolved.

In 2020, documents indicated that Holmes’ defense could use “mental illness” or “an abusive relationship with Sunny” as a defense. Holmes’ trial is delayed several times, either because of the Covid-19 pandemic, or because of Holmes’ pregnancies – with Billy Evans, heir to a hotel chain in California.

In January 2022, Holmes is convicted of 11 counts. Months later, Sunny is also convicted.

Holmes sometimes tries to have another trial, on the grounds that one of the witnesses wanted to change his testimony. In February 2023, she tried to stay away from prison, claiming that she is not a risk, as she is also a mother of two young children.

Sunny was sentenced to 13 years, and has been in prison since December 2022; Holmes has until May 27 to begin his sentence. The two were also sentenced to pay US$ 452 million (about R$ 2.2 billion) to the victims of the fraud.

Featured photo: Convicted of fraud, Elizabeth Holmes. Ethan Pines/FORBES