Elizabeth Holmes' conviction & the Theranos fraud, everything you need to know about this startup scam

Updated : Jan 04, 2022 08:58
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EJ Biz Desk

Former Theranos CEO Elizabeth Holmes was found guilty of criminal fraud and conspiracy ending a lengthy trial that has captivated Silicon Valley. Holmes could now face up to 20 years in prison for her role building the $9 billion blood-testing startup Theranos that collapsed in scandal.

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Theranos: The $9 billion startup

Holmes who raised $945 million from high-profile investors including Rupert Murdoch and the Walton Family (owners of Walmart) claimed to the disruptor in the $75 billion blood testing industry. Elizabeth Holmes, the 31-year-old founder of the company claimed the company could do effective blood tests that only a finger prick — and could deliver results of up to 30 tests in hours using its own lab testing instrument (called "Edison machines")

Startup to scandal

Then in October, the Wall Street Journal published an eye-catching investigation into Theranos, finding that the company's revolutionary claims were overblown. Theranos has allegedly been collecting blood samples the traditional way and then diluting them so they could be run on machines made by other companies. 

Holmes who was dubbed by Forbes as the youngest female self-made billionaire faced various lawsuits, including one Holmes settled with the Securities and Exchange Commission, and the Justice Department’s investigation and prosecution.

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A jury in San Jose, California, returned the verdict after hearing three months of testimony and unless the decision is overturned on appeal Holmes the as long as 20 years in prison, though she’s likely to be sentenced to far less than that.

Elizabeth HolmesTheranosstartupFraud

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