Blood Testing Company Trial: The Deep Fall of Elizabeth Holmes

It’s the biggest scam in Silicon Valley. The founder of the blood testing company Theranos, Holmes, is accused of having deceived investors and patients. Your business model is based on a huge hoax.

Six years ago, Elizabeth Holmes, now 37, was considered the big star of Silicon Valley. She was hailed as the next Steve Jobs. She even imitated the late co-founder of Apple in terms of clothing: she mostly wore a black turtleneck. Six years ago she told a panel discussion in an artificial deep voice and chest tone of conviction: “First they think you are crazy and fight you, and then you change the world”.

Prominent investors, illustrious supervisory board

With her biotech company Theranos, founded in 2003, she wanted to revolutionize the world of blood analysis. Holmes was just 19 years old at the time and had dropped out of Stanford after only a year. She managed to get publisher Rupert Murdoch to invest $ 100 million in the startup alone; the former US Secretary of Education Betsy de Vos contributed just as much. There were dozen other major investors. Former US Secretary of State Henry Kissinger and George Shultz sat on the company’s board of directors.

Before the hoax was exposed in 2016, Theranos was considered a nine-fold “unicorn”: It was valued at nine billion dollars. “If this technology had actually worked, that would have been the end of the blood test as we know it today. You could have made a lot of money with it,” explains investigative reporter Michael Siconolfi of the Wall Street Journal, explaining the Theranos hype at the time.

In the end it is only enough for a herpes diagnosis

Edison was the name of the device developed by Theranos for analyzing blood. A black box, maybe the size of a desktop copier. With just a few drops of blood, the machine should be able to perform around 240 different tests. In the end, Edison could only accurately determine if someone had herpes.

A reporter for the “Wall Street Journal” revealed in 2015 that the company had secretly used Siemens analysis equipment in the background. All wrong, claimed Holmes at the time: “We have never used any other commercially available laboratory equipment. Every test ever performed has drawn on the technology we have developed.” Several of the more than 800 employees went public at the time because they no longer wanted to cover Holmes. Edison was already working in several pharmacies – and gave a number of incorrect results.

Holmes faces 120 years in prison

The process that begins today with the selection of the jury has one major problem: there is no hard evidence. Shortly before the start-up went bankrupt, employees destroyed a server on which millions of blood test results were stored. Sandra Randazzo, a reporter for the Wall Street Journal, explains what is now crucial in the Holmes trial: “It depends on whether she intentionally wanted to cheat. Your lawyers could argue that many start-ups are particularly rosy in Silicon Valley if they want to attract investors. Theranos could not have been an exception. ”

Another line of defense became known at the weekend: Holmes lawyers want to portray their then deputy at Theranos, Sunny Balwani, with whom she also had a relationship, as a mastermind. He is said to have abused her psychologically and sexually for years. Holmes faces up to 120 years in prison if convicted.