Elizabeth Holmes, the founder of fallen medical tech startup Theranos, is facing criminal charges on two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to a new court filing submitted to a San Jose-based federal court on Thursday and unsealed a day later, the 34-year-old and former Theranos President Ramesh Balwani are accused of defrauding clients, patients, and investors while advertising the company's supposedly revolutionary blood drawing and testing technique, having allegedly severely misrepresented their technological capabilities as part of a conspiracy to attract over $100 million in funding.
Shortly before dropping out of Stanford's School of Engineering in 2004, Ms. Holmes founded Theranos, a Palo Alto, California-based company that claimed it could deliver highly accurate blood testing results from just a few drops of blood taken from a finger prick. To date, the startup raised over $750 million in funding, with its peak valuation reaching $9 billion in late 2013. Its fortunes started turning in October of 2015 when The Wall Street Journal began publishing a series of investigative pieces casting doubts on its proprietary technology, with the development resulting in federal investigations, lawsuits, regulatory penalties, and countless blood testing samples and treatments based on the thereof being invalidated.
The United States Securities and Exchange Commision initiated civil litigation against Ms. Holmes and Ms. Balwani, as well as Theranos itself in March. The charges were settled several weeks back with a $500,000 fine and other concessions, allowing the now-disgraced entrepreneur to avoid admitting any wrongdoing. Theranos was likely aware of the possibility of criminal charges being brought forward, having announced Ms. Holmes will be stepping down from her CEO role immediately before she was accused of eleven counts of successful and attempted wire fraud. The startup is now said to be all but doomed, having recently gone through several rounds of extremely aggressive layoffs that left it with only a couple dozen employees. The company is expected to file for bankruptcy in the coming months, years after attracting high-profile investors such as Rupert Murdoch, Raymond Bingham, B.J. Cassin, and ATA Ventures, according to Crunchbase.