Elizabeth Holmes, the previous CEO of Theranos who had once been dubbed the "next Steve Jobs," has been charged in a federal court for fraud. Not long before the charges had been announced, Holmes stepped down as CEO.
Prosecutors alleged that Theranos, a health startup company, is a "multi-million dollar scheme to defraud investors," reports The Hill. The former president and chief operating officer of Theranos, Holmes and Ramesh "Sunny" Balwani perspectively, where charged with nine counts of wire fraud plus two counts of conspiracy to commit wire fraud.
A 15-page court filing states that Balwani and Holmes lied about the partnership of Theranos with the Pentagon and Walgreens, its products' capabilities, and the company's financial health. They are both facing a $250,000 fine for each charge plus up to 20 years in prison.
The Justice Department claimed that the duo knew their startup was not capable of delivering the promises that were made to doctors, the media, and investors. The indictment alleged that the company provided doctors with "materially false and misleading information concerning the accuracy and reliability of Theranos’s blood testing services," which doctors had passed on to their patients. Theranos promised that they would be able to detect a variety of diseases with their technology through blood tests. The two founders would allegedly transmit the tests despite knowing that they were not reliable.
Back in March, Holmes and Balwani were slammed with "massive fraud" charges by the Securities and Exchange Commission.