The founder of Theranos, Elizabeth Holmes has entered a Texas prison to begin her sentence for a notorious hoax that involved dangerously overselling the capabilities of her company’s blood testing technology.
Theranos founder Elizabeth Holmes entered a Texas prison Tuesday where she could spend the next 11 years over a blood-testing hoax that became a parable about greed and hubris in Silicon Valley.
While she was building up Theranos, Holmes grew close to Ramesh “Sunny” Balwani, who would become her romantic partner as well as an investor and fellow executive in the Palo Alto company based in California.
Together, Holmes and Balwani promised Theranos would revolutionise health care with a technology that could quickly scan for diseases and other problems with a few drops of blood.
The hype surrounding the alleged breakthrough helped Theranos raise nearly $1 billion from enthusiastic investors, assemble an influential board of directors that included former presidential cabinet members George Shultz, Henry Kissinger and James Mattis and turned Holmes into a Silicon Valley sensation with a fortune valued at $4.5 billion [€4.2 billion] on paper in 2014.
But it all blew up after serious flaws in Theranos’ technology were exposed in a series of explosive articles in The Wall Street Journal. Holmes and Balwani broke up after the Journal’s revelations and the company collapsed.
In 2018, the US Justice Department charged both with a litany of white-collar crimes in a case aimed at putting a stop to the Silicon Valley practice of overselling the capabilities of a still-developing technology.
Holmes admitted making mistakes at Theranos but steadfastly denied committing crimes during seven often-fascinating days of testimony on the witness stand during her trial. At one point, she told the jury about being sexually and emotionally abused by Balwani while he controlled her in ways that she said clouded her thinking.
Balwani’s attorney steadfastly denied Holmes’ allegations, which was one of the key reasons they were tried separately.
Balwani was convicted on 12 felony counts of fraud and conspiracy in a trial that began two months after Holmes’ ended. He is currently serving a nearly 13-year sentence in a Southern California prison.