She was hailed as the next Steve Jobs because of her cutting-edge ideas. Now she could spend up to 20 years in prison if found guilty.
Elizabeth Holmes has become a legend… but not in the way she’d imagined.
The businesswoman, who at just 19 years old began to revolutionize Silicon Valley with the promise of better preventive health through her venture Theranos, will face justice in the United States this month after defrauding hundreds of investors.
Holmes was hailed as the next Steve Jobs for her cutting-edge ideas, even imitating the Apple founder’s simple, monochromatic clothes. Now she could spend up to 20 years in prison if found guilty.
In 2013, Elizabeth Holmes captivated those around her and strangers with a technology that –in theory– she had developed, which promised to perform hundreds of clinical analyses from a single drop of blood.
With the device it would be easier, faster, and cheaper to diagnose cancer, hypertension, diabetes, or the human immunodeficiency virus (HIV). Supposedly, it would be able to perform up to 200 clinical examinations with that single sample.
Holmes was a chemistry student at Stanford University when she convinced entrepreneurs to invest in her company Theranos.
The venture reached a value of 9 billion dollars, and Forbes magazine ranked her as one of the richest women in the world.
Among the investors who contributed capital for the creation of the promising company were former President Bill Clinton and businessmen such as Robert Murdoch and Mexican Carlos Slim, in a collaboration established with the Carlos Slim Foundation.
Theranos’ promise was based on the Edison machine –named after the famous American inventor– a small device the size of a home printer 43 cm high by 33 cm wide.
Holmes claimed that the machine could be a “laboratory at home” and that it would soon be in every home performing frequent medical tests. But, unlike what Jobs accomplished with Apple, Edison never worked.
Theranos even struck a deal with the Walgreens pharmacy chain to perform blood tests. Not only were there complaints about conventional blood samples being taken, i.e. it didn’t just need one drop of blood as advertised, there were also misdiagnoses of cancer and HIV.
However, Holmes continued to lie to her investors, and although she claimed that the tests were carried out in that mini laboratory, they were actually done using conventional machines.
Holmes was charged in 2018 with fraud and conspiracy when the Theranos machine was revealed to be a false promise. The federal trial was to begin in San Jose, California, on July 28, 2020, but was postponed due to the pandemic and the former businesswoman’s pregnancy.
In addition to the investors who contributed funds, doctors and patients who were deceived and misdiagnosed have also accused Holmes, who could face prison if convicted.
Elizabeth Holmes’ trial began on August 31 with the questioning of 200 potential jurors, who are expected to be impartial in a case that has had extensive coverage in U.S. and global media.
The potential jurors completed questionnaires about their familiarity with Holmes, and an independent consultant will investigate them through various means, especially their social networks, to rule out possible opinions or biases about her guilt or innocence.
Meanwhile, Holmes’ lawyers have stated that she could choose to take the stand in her own defense, a decision that would be unusual given that it means defendants will likely be cross-examined by prosecutors.
On Friday, August 27, Holmes delivered documents in which 18 months ago she accused Ramesh “Sunny” Balwani, the former director of operations at Theranos and ex-partner and father of her son, of psychological and sexual abuse, for which he could be identified in the trial as co-conspirator in the fraud.
Defense attorneys said she believed “allegedly false statements about parts of Theranos that he controlled, including a claim about a partnership with the Walgreens pharmacy chain.”
Theranos trial: Who is Ramesh Balwani? https://t.co/EVJSGIkVSi
— Pramod Thomas (@pramodthomas84) August 31, 2021
Balwani is also expected to face fraud charges. As early as 2019, he denied allegations of abuse in a court filing.
Holmes was 18 when she met Balwani, who is 20 years her senior, and began living with him about three years later.
The Theranos case has attracted the attention of the press with extensive coverage and has inspired various written and film projects such as the book Bad Blood by Wall Street Journal reporter John Carreyrou and the documentary The Inventor: Out for Blood in Silicon Valley, directed by Alex Gibney, available on HBO.
Next year, the film Bad Blood, based on the book of the same name, will be released with actress Jennifer Lawrence starring as Elizabeth Holmes.
Female entrepreneurs now looking for funding to kick-start their projects are often compared to Elizabeth Holmes. Her legend could hinder the rise of women with innovative ideas in their attempts to advance their own fledgling businesses.
Alice Zhang, who is seeking funding for her artificial intelligence drug discovery company Verge Genomics, told The New York Times that she has been questioned and has received jokes and comparisons to the Holmes case although her area isn’t related to the technology promised by Theranos. And she isn’t the only one.
Young women in the biotechnology, health, and natural sciences sectors in the United States are now linked to the fraudulent company and to the image of a woman who abused the trust of many people.
In an environment in which the trustworthiness of women entrepreneurs is often questioned compared to that of men, the Holmes case is an obstacle in their way. (With information from Reuters)