Theranos founder Elizabeth Holmes, 36, loses bid to dismiss criminal charges

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A California judge on Tuesday refused to dismiss the criminal charges against Theranos founder Elizabeth Holmes and her former executive ex-boyfriend Ramesh Balwani.

Holmes, 36, and Balwani are accused of falsely claiming the company’s machines could perform breakthrough blood tests with a single drop of blood, duping investors out of millions and misleading doctors and patients. 

In July, the grand jury returned new indictments that clarified the alleged crimes committed by Holmes and Balwani. 

But lawyers for the pair had argued that prosecutors had taken too long to file the new indictments and some of the alleged misconduct was too old, according to the Wall Street Journal. The defense also said the indictments didn’t provide enough explanation of the charges.  

Prosecutors have said that the allegations were clear from the initial charges, which ‘described the type of misrepresentations, half-truths and omissions made to investors to perpetuate the fraud’. 

After listening to the arguments on Tuesday, US District Judge Edward J. Davila said the new indictments had clarified issues with the previous charges and denied the dismissal of charges. 

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A California judge on Tuesday refused to dismiss the criminal charges against Theranos founder Elizabeth Holmes (pictured arriving to court in January) and her former executive ex-boyfriend Ramesh Balwani

A California judge on Tuesday refused to dismiss the criminal charges against Theranos founder Elizabeth Holmes (pictured arriving to court in January) and her former executive ex-boyfriend Ramesh Balwani

Holmes launched her blood-testing company in 2003 after dropping out of Stanford University

Holmes launched her blood-testing company in 2003 after dropping out of Stanford University

Holmes ex boyfriend and ex Theranos president Ramesh 'Sunny' Balwani (pictured in July 2019)

Holmes ex boyfriend and ex Theranos president Ramesh 'Sunny' Balwani (pictured in July 2019)

Holmes and ex-Theranos president Balwani are accused of falsely claiming the company’s machines could perform breakthrough blood tests with a single drop of blood, duping investors out of millions and misleading doctors and patients

She is set to go to trial March 9 after it was pushed back due to the coronavirus pandemic. Balwani will face trial separately and at a later date. 

Holmes, a Stanford University drop out, launched her Palo Alto blood-testing start up in 2003 when she was 19 years old. 

A notoriously secretive company, Theranos shared very little about its blood-testing machine with the public or medical community. 

Holmes said she was inspired to start the company in response to her fear of needles.

Theranos became a big name in Silicon Valley led with Holmes, a Steve Jobs-obsessed leader who wore black turtlenecks everyday like her Apple idol.

She attracted investors and venture capital firms and the company was valued at $9billion before crashing to the ground in 2015. 

But an investigation by The Wall Street Journal in 2015 found that Theranos’ technology was inaccurate at best, and that the company was using routine blood-testing equipment for the vast majority of its tests.

The story raised concerns about the accuracy of Theranos’ blood testing technology, which put patients at risk of having conditions either misdiagnosed or ignored. 

Holmes (pictured), a Stanford University drop out, launched her Palo Alto blood-testing start up in 2003. She and Balwani are accused of scamming investors out of more than $700million

Holmes (pictured), a Stanford University drop out, launched her Palo Alto blood-testing start up in 2003. She and Balwani are accused of scamming investors out of more than $700million

Holmes (pictured), a Stanford University drop out, launched her Palo Alto blood-testing start up in 2003. She and Balwani are accused of scamming investors out of more than $700million 

Theranos' ground-breaking invention, a machine Holmes claimed could perform hundreds of tests on a drop of blood taken from a pin-pricked finger, was exposed as a humiliating sham

Theranos' ground-breaking invention, a machine Holmes claimed could perform hundreds of tests on a drop of blood taken from a pin-pricked finger, was exposed as a humiliating sham

Theranos’ ground-breaking invention, a machine Holmes claimed could perform hundreds of tests on a drop of blood taken from a pin-pricked finger, was exposed as a humiliating sham

The Journal’s investigation marked the beginning of the end of Theranos. Walgreens ended its blood-testing partnership with the company, and the Department of Health and Human Services effectively banned Theranos in 2016 from doing any blood testing work at all. 

She and Balwani were then accused of scamming investors out of more than $700million. 

They claimed their machines could conduct a full range of tests using a few drops of blood from a finger prick – but the technology was not able to, it was inaccurate and unreliable.

Both have denied the allegations and pleaded not guilty to wire fraud and conspiracy to commit wire fraud. 

If convicted, they could each face maximum penalties of 20 years in prison and a $2.75million fine, plus possible restitution, the Department of Justice said.

Lawyers for Holmes argued in December that the government’s case was ‘unconstitutionally vague’ and lacked specific claims of misrepresentation.

Prosecutors have identified 170 witnesses from more than a dozen states who plan to testify in the trial.

15 YEARS OF THERANOS

2003 – Holmes dropped out of Stanford University at 19 to found Theranos, pitching its technology as a cheaper way to run dozens of blood tests with just a prick of a finger and a few droplets of blood. Holmes said she was inspired to start the company in response to her fear of needles.

2004 – Theranos raises $6.9million and is valued at $30million. 

2007 – Theranos is valued at $200billion.

2010 – Investors bought what Holmes was selling and invested hundreds of millions of dollars in the company. She said in a July Securities and Exchange Commission (SEC) filing that it had raised $45million. It is valued at $1billion.

2013 – Theranos announces partnership with Walgreens.

2014 – Theranos was worth more than $9billion and Holmes the nation’s youngest self-made female billionaire, hailed by Fortune magazine.

Elizabeth Holmes, founder and chief executive officer of Theranos Inc., speaks during the 2015 Fortune Global Forum in San Francisco, California, on November 2, 2015

Elizabeth Holmes, founder and chief executive officer of Theranos Inc., speaks during the 2015 Fortune Global Forum in San Francisco, California, on November 2, 2015

Elizabeth Holmes, founder and chief executive officer of Theranos Inc., speaks during the 2015 Fortune Global Forum in San Francisco, California, on November 2, 2015

February 2015 – In The Journal of the American Medical Association, a Stanford School of Medicine professor criticizes failure to publish anything in peer-reviewed biomedical journals. A notoriously secretive company, Theranos shared very little about its blood-testing machine with the public or medical community.

October 2015 – An investigation by The Wall Street Journal found that Theranos’ technology was inaccurate at best, and that the company was using routine blood-testing equipment for the vast majority of its tests. The story raised concerns about the accuracy of Theranos’ blood testing technology, which put patients at risk of having conditions either misdiagnosed or ignored, and Theranos temporarily halts finger prick tests.

June 2016 – Walgreens ended its blood-testing partnership with the company.

July 2016 – Department of Health and Human Services effectively banned Theranos in 2016 from doing any blood testing work at all.

2018 – Holmes forfeits control of Theranos and agrees to pay a $500,000 fine to settle charges by the SEC that she had committed a ‘massive fraud’ that saw investors pour $700million into the firm.



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