Theranos CEO Elizabeth Holmes charged with criminal fraud

Theranos CEO Elizabeth Holmes charged with criminal fraud

Theranos CEO Elizabeth Holmes charged with criminal fraud

Holmes, 34 years old, and Balwani, 53, were each charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud in an indictment handed up Thursday and unsealed Friday. If convicted, Holmes and Balwani face a maximum prison sentence of 20 years, a $250,000 fine and restitution for each count of wire fraud.

Federal prosecutors indicted Elizabeth Holmes on criminal fraud charges for allegedly defrauding investors, doctors and the public as the head of the once-heralded blood-testing startup Theranos.

"Sunny Balwani accurately represented Theranos to investors to the best of his ability", Coopersmith said in a statement. They also told investors the company's partnership with Walgreen's for blood-testing "Wellness Centers" was expanding, when in reality it was stalled because executives at the pharmacy giant "had concerns with Theranos's performance", the indictment says.

The tests performed on Theranos technology, in addition, were likely to contain inaccurate and unreliable results.

"This indictment alleges a corporate conspiracy to defraud financial investors", said John F. Bennett, special agent in charge of the Federal Bureau of Investigation in San Francisco.

The defendants claimed the analyzer was able to perform a full range of clinical tests using small blood samples drawn from a finger stick. When the company's proprietary devices were used for testing, the results were found to be less reliable and accurate than those produced by traditional machines.

The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false. At one time, Theranos was worth more than $10 billion and Holmes the youngest self-made female billionaire. On Wednesday, March 14, 2018, the Securities and Exchange Commission filed charges against Holmes and her company for defrauding investors. Holmes settled with the SEC, agreeing to pay $500,000 in fines and penalties.

Holmes and Theranos reached a settlement with the SEC, while the SEC said it would take its case against Balwani to court.

The Board of Directors of Theranos announced Friday that Elizabeth Holmes has stepped down as Chief Executive Officer.

The company has laid off most of its workforce and is on the brink of bankruptcy. That claim won backing of some of the country's largest tech companies and biggest political names, and turned Ms. Holmes into a cult hero in the tech world, particularly as a woman at the head of a Silicon Valley company.

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