Theranos Founder, Ex-President Charged in Criminal Scheme

theranos founder ex president charged in criminal scheme
Theranos Founder, Ex-President Charged in Criminal Scheme

Theranos Inc. founder Elizabeth Holmes, who reigned briefly as the world’s youngest female self-made billionaire over her promise to revolutionize blood testing, was criminally charged with defrauding investors along with the company’s former president.

The indictment announced Friday by the U.S. Attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and the company’s ex-president, Ramesh “Sunny” Balwani, lied about their technology while raising more than $700 million to build the medical-testing startup.

The charges are the most serious blow to the company since scrutiny by the media and regulators escalated in 2015.

After its valuation peaked at $9 billion in 2013 and 2014, Holmes and Balwani have spent millions of dollars defending against shareholder and consumer lawsuits and settling claims, including a suit by would-be partner Walgreens Boots Alliance Inc.

The startup was on the verge of bankruptcy by the end of 2017 when it got a loan that it said would keep the business afloat for another year, according to the SEC.

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