The company's stated mission was to "revolutionize medical laboratory testing," according to the Department of Justice. << << /StructParents 4 /K 210 0 R << /Type /Pages /K 12 Subscribe to our channelhttp. << /Type /Page /P 279 0 R /K 14 /P 293 0 R << >> 54 0 obj endobj endobj /Parent 5 0 R Theranos, Inc. is a consumer health technology company founded in 2003 by Elizabeth Holmes. /Lang (EN-US) >> /P 8 0 R null null 197 0 R null null null 198 0 R null null null endobj /S /P endobj >> /Lang (EN-US) /Subscript /Span /CropBox [0 0 612 792] endobj The defendants are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. /Pg 235 0 R << endobj 354 0 obj /K 199 0 R 246 0 obj 109 0 obj endobj endobj endobj /Lang (EN-US) /Lang (EN-US) /P 303 0 R >> 252 0 obj Theranos Mission Statement. /P 8 0 R 171 0 R null null] /Lang (EN-US) But indictments said Holmes andher colleague and former romantic partner Ramesh Sunny Balwani, lied about the technology, the company's finances, and its partnerships with the Department of Defense and Walgreens. /P 298 0 R /P 50 0 R >> << >> /Pg 240 0 R /BBox [79.9440002441 274.9559936523 453.9599914551 398.8439941406] Recalls, Market Withdrawals and Safety Alerts, Inspections, Compliance, Enforcement, and Criminal Investigations, June 15, 2018: Theranos Founder and Former Chief Operating Officer Charged in Alleged Wire Fraud Schemes. endobj /P 265 0 R 221 0 obj Theranos CEO Elizabeth Holmes on her company and the landscape of U.S. diagnostic-lab industry. /Tabs /S Yam said that Theranos lost $16.2 million in 2010, $27.2 million in 2011, $57 million in 2012, and $92 million in 2013. endobj Washington, DC. In addition, the defendants represented to investors that Theranos would soon dramatically increase the number of Wellness Centers within Walgreens stores when, in truth, Holmes and Balwani knew by late 2014 that Theranoss retail Walgreens rollout had stalled because of several issues, including that Walgreenss executives had concerns with Theranoss performance. /Pg 243 0 R /P 50 0 R << << << << /Type /Catalog 373 0 obj 195 0 obj /Lang (EN-US) /K 221 0 R >> >> Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in New York, NY on Nov. 9, 2015. /P 340 0 R What we know for certain is that behind this particular corporate failure lies a cautionary tale of boundless visioning that all investors, entrepreneurs and organizations seeking breakthrough innovations should be interested in further understanding. /P 310 0 R 372 0 obj /Lang (EN-US) /Lang /P 48 0 R /K 150 0 R /Tabs /S 55 0 obj /K 191 0 R /P 8 0 R /Lang (EN-US) /S /LBody /Pg 247 0 R << This is how Theranos's huge valuation was birthed and where a critical legal problem lies. 116 0 obj Elizabeth Holmes speaks during a Bloomberg, Television interview at the Vanity Fair 2015 New Establishment Summit in San Francisco, on Oct. 6, 2015. /P 8 0 R 115 0 obj /Lang (EN-US) /S /P >> /P 48 0 R /P 308 0 R >> /Lang (EN-US) /Pg 246 0 R /S /LI >> /P 371 0 R /S /LI endobj It involves a dream, a mission, a plan, a vision and quite possibly monumental corruption. 55 0 R 56 0 R 57 0 R 58 0 R 59 0 R 60 0 R 61 0 R 62 0 R 63 0 R 64 0 R +1 (202) 442-3507. endobj At times during that period, Balwani worked in several capacities including as a member of the companys board of directors, as its president, and as its chief operating officer. 104 0 obj /K 6 /O /Layout /Type /Page /S /P endobj 236 0 obj /Pg 235 0 R /P 267 0 R /S /LI /P 272 0 R /S /LI /CreationDate (D:20180314084127-07'00') null null null 231 0 R null null null 232 0 R null null 2. /S /LI endobj >> /S /LBody 361 0 obj 245 0 obj /S /LI 48 0 obj Creating something new is about breaking the status quo. /P 51 0 R Employees in the top 10 percent can make over $68,000 per year, while employees at the bottom 10 percent earn less than $28,000 per year. /K 11 >> endobj 92 0 obj >> /Type /MCR >> In 2013, things had "started to get a bit tight," Yam said. << /S /LBody /Author () /K 160 0 R 369 0 obj 374 0 obj /StructParents 22 endobj >> /K [368 0 R 369 0 R 370 0 R 371 0 R 372 0 R 373 0 R] /Pg 257 0 R /P 51 0 R /Parent 12 0 R endobj /Annots [] /CropBox [0 0 612 792] /Pg 235 0 R /Lang (EN-US) /K 30 /CropBox [0 0 612 792] /Lang (EN-US) >> /Pg 235 0 R 32 0 obj /P 51 0 R >> >> /P 8 0 R In a reply, Holmes said she was projecting $100 million for 2015, nearly ten times less than what she told investors at one point. /Pg 255 0 R /Lang (EN-US) << /K 155 0 R /Annots [] << /K 141 0 R /S /P These detailed accounts show a pattern of behaviors consistent with a distorted motivational and cognitive state. << >> Connor Radnovich/The Chronicle. /K 14 /Lang (EN-US) 147 0 obj >> /Pg 247 0 R << endobj >> >> << /S /P /K 14 endobj 234 0 obj /P 8 0 R /S /P 211 0 obj endobj /Pg 256 0 R For example, with respect to investors, defendants performed technology demonstrations during which defendants intended to cause potential investors to believe blood tests were being conducted on Theranoss proprietary analyzer when, in fact, the analyzer really was running a null protocol and was not testing the potential investors blood. << << >> With /Lang (EN-US) /Lang (EN-US) /K 41 /P 264 0 R endobj 379 0 obj /S /LI Your California Privacy Rights | Do Not Sell My Personal Information endobj /P 320 0 R << While some are vague affirmations, others can sharpen employees' minds and give them a sense of identity and belonging. endobj /CropBox [0 0 612 792] >> Theranos founder Elizabeth Holmes, now a mother of two, is asking to delay her 11-year sentence for felony fraud so she can be at home with her two young children while she appeals the conviction. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. endobj /P 8 0 R 304 0 obj /CropBox [0 0 612 792] /S /P /MediaBox [0 0 612 792] /P 367 0 R /Pg 236 0 R null null 121 0 R null null null 122 0 R null null null /Annots [] /S /LBody endobj Holmes, who founded Theranos in 2003 at age 19 with the lofty mission of revolutionizing blood testing, has pleaded not guilty. << 291 0 obj ] << 351 0 obj 156 0 obj /K 0 /Lang (EN-US) /S /P /K 49 /Pg 254 0 R 85 0 R 86 0 R 87 0 R 88 0 R 89 0 R 90 0 R 91 0 R 92 0 R 93 0 R] << /S /LI Theranosonce valued at approximately $10 billionis no more. 70 0 obj endobj /K 4 /S /LI Entrepreneurship lives in the realm of threading between the present and the future. /K 209 0 R 190 0 obj endobj 52 0 obj >> Ms. Holmes's lawyers have said the entrepreneur dedicated 15 years to Theranos's mission and her only crime was having a startup that failed, as so many do In November 2022, Holmes was sentenced to 135 months in prison for defrauding investors in the failed Silicon Valley startup that sought to revolutionize blood testing. /Pg 258 0 R 172 0 obj /Pg 258 0 R << /K 6 /S /LBody /K 151 0 R The indictment charges each defendant with two counts of conspiracy to commit wire fraud, in violation of 18 U.S.C. /Contents [497 0 R 498 0 R 499 0 R] /Pg 237 0 R >> >> 19 0 obj 280 0 obj << /S /LBody << /Lang (EN-US) endobj endobj << >> 84 0 obj << >> << /S /LBody >> << The defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests, including the tests for calcium, chloride, potassium, bicarbonate, HIV, Hba1C, hCG, and sodium. /P 327 0 R Those emails eventually made their way to Holmes, who asked, How fast can we resolve this issue? Another employee replied that, after omitting some data, the problem appeared solved. /S /LBody /K [26 395 0 R] 384 0 obj >> endobj endobj >> /Pg 235 0 R >> /P 8 0 R endobj endobj And although entrepreneurship is very much about turning an imagined future state into reality, the vast and unchecked gap between Theranos vision and the technological incompetence of its operations was breathtaking. Theranos founder Elizabeth Holmes "lied and cheated" for money and fame, prosecutors alleged on the first day of the former Silicon Valley star's trial. /S /L Bundled together, these biases not only warped Holmes sense of truth, but they likely slanted the perspective of key stakeholders who were attracted to the many promises made by Theranos. 258 0 obj /K 22 endobj /K 22 The mission statement conveys no values such as honesty, transparency, or integrity. /Lang (EN-US) << 214 0 obj /S /LBody : Sign up for our trending newsletter to get the latest news, This article originally appeared on USA TODAY: Ex-Theranos CEO Elizabeth Holmes has second child, seeks prison delay, American businessperson; a subject of an SEC investigation, the failed Silicon Valley startup that sought to revolutionize blood testing, Student accused of attacking teacher's aide over Nintendo Switch, Optimism of US consumers declined in February, reflecting fears of a recession, her conviction onfour counts of fraud and conspiracy, Sign up for our trending newsletter to get the latest news, Ex-Theranos CEO Elizabeth Holmes has second child, seeks prison delay, Kellyanne Conway, George Conway To Divorce After Decadeslong Marriage: Report, Reports: 3 children dead, 2 wounded in attack at Texas home, 'Extremely dangerous': Spike in illegal crossings at Canada-Vermont border has feds sounding alarm, School punished teen girl for working out in sports bra in 100-degree Texas heat, ACLU says, Republicans Use Arcane Political Tactic to Thwart Democrats, I Wore Katie Holmes Go-To Bag Trend for a Week, and I Finally Get the Appeal, Alex Murdaugh sentenced to life in prison for murders of wife and son, NBA Player Richaun Holmes Sues Sacramento Bee Parent for Defamation, Murdaugh defense vows appeal, even to Supreme Court, Alex Murdaugh sentenced to life in prison. /S /LBody /K 201 0 R /S /LI /Contents [453 0 R 454 0 R 455 0 R] uuid:08e7f9c5-06b3-4447-b9e6-d8f448ec8b85 /S /P << 346 0 obj /Lang (EN-US) /P 325 0 R /Lang (EN-US) /StructParents 21 /S /LI The data on this page is also based on data sources collected from public and open data sources on the Internet and other locations, as well as proprietary data we licensed from other companies. endobj >> /S /P /Resources 460 0 R 306 0 obj /S /P The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false. endobj /Pg 256 0 R "I was taken with the idea . /P 8 0 R However, any sentence following conviction would be imposed by the court after consideration of the U.S. /K 12 /K [354 0 R 355 0 R 356 0 R 357 0 R 358 0 R 359 0 R 360 0 R 361 0 R 362 0 R 363 0 R /P 34 0 R << The Securities and Exchange Commission also brought civil fraud charges against Holmes and Balwani. Its unclear whether Theranos rise and fall will turn out to be a dazzling mirage of would-be business greatness, one of the most infamous stories of corporate fraud in the 21st century, or, an ironic reminder of the inescapable weakness of biased decision-making. << endobj endobj /P 289 0 R /S /LI /P 51 0 R /S /LI /K 153 0 R The company grew to become a business worth billions. /P 48 0 R /K 10 2018-03-14T09:02:10-07:00 /Pg 237 0 R /S /LI << uuid:f59fd1a5-0a21-408a-99c1-079770aebbbd /Lang (EN-US) >> /S /LI /Lang (EN-US) /Pg 248 0 R /P 328 0 R >> /Lang (EN-US) >> Further, the indictment alleges that based on the defendants misrepresentations and omissions, many hundreds of patients paid, or caused their medical insurance companies to pay, Theranos, or Walgreens acting on behalf of Theranos, for blood tests and test results, sometimes following referrals from their defrauded doctors. << /P 381 0 R /Lang (EN-US) /Pg 235 0 R /S /P /S /Span /Pg 256 0 R /Lang (EN-US) /Type /Page /P 8 0 R /K [28 391 0 R] << /Resources 468 0 R >> endstream /K 6 /K 10 << 298 0 obj Todays indictment alleges that through their company, Theranos, CEO Elizabeth Holmes and COO Sunny Balwani not only defrauded investors, but also consumers who trusted and relied upon their allegedly-revolutionary blood-testing technology., This indictment alleges a corporate conspiracy to defraud financial investors, said Special Agent in Charge Bennett. /Lang (EN-US) << 248 0 obj << /P 8 0 R << >> The Indictment Alleges That Investors Were Defrauded. Holmes dropped out of Stanford University at 19 to found Theranos in 2003. /P 260 0 R /Pg 256 0 R /Pg 237 0 R /Lang (EN-US) /Annots [] /P 55 0 R >> /Resources 480 0 R By Elizabeth Lopatto / @ mslopatto. >> /Pg 235 0 R /K [26 397 0 R] Jumping off the track ends not with a win for consumers, physicians, investors and the company but with charges from the DOJ and the SEC. 211 0 R null null null 212 0 R null null null 213 0 R null /Pg 235 0 R /Pg 256 0 R /P 50 0 R << A young (age-defying), pure-looking (evil-defying), masculine-sounding (stereotype-defying) female CEO speaking about Theranos unfulfilled feats in the present or past present tense, Holmes proposition was so enticing that she was able to assemble one of the most impressive boards in corporate America. /K 4 /P 171 0 R >> /Lang (EN-US) null 24 0 R 25 0 R 26 0 R 27 0 R 28 0 R 29 0 R 30 0 R 31 0 R 32 0 R /Lang (EN-US) >> 250 0 obj /Tabs /S /StructParents 18 endobj 3 0 obj 341 0 obj /Pg 235 0 R /Lang (EN-US) /Lang (EN-US) << << >> /Lang (EN-US) << 267 0 obj << /Contents [473 0 R 474 0 R 475 0 R] << endobj /S /LBody >> 191 0 obj 201 0 obj >> << /K [273 0 R 274 0 R] /P 40 0 R endobj /Pg 235 0 R >> endobj /Lang (EN-US) /S /P It's unclear . >> 325 0 obj The company claimed to be able to provide over 240 finger-prick blood tests, including ones that could reportedly detect cancer, according to The Wall Street Journal. 72 0 obj << /Pg 244 0 R /P 380 0 R /ParentTreeNextKey 24 Here are three culture takeaways from the Theranos scandal that are relevant to all leaders and employees. << /Annots [] /P 366 0 R /S /LBody 9 0 obj 288 0 obj /P 50 0 R endobj 89 0 obj /CropBox [0 0 612 792] << /Contents [429 0 R 430 0 R 431 0 R] << Theranos stood as the next big breakthrough innovator in the healthcare industry offering an affirming achievement of the value of human ingenuity. endobj << /Pg 249 0 R 4 [null null 131 0 R null null null 132 0 R null null null /K 32 /S /P endobj . 302 0 obj null null 162 0 R null null null 163 0 R null null] endobj /Pg 250 0 R 119 0 obj /Type /MCR /Contents [433 0 R 434 0 R 435 0 R] << /K 6 /K 11 >> >> << In court documents, federal prosecutors have said Holmes is a flight risk. /Annots [] null null 183 0 R null null null 184 0 R null null null 328 0 obj 341 0 R 342 0 R 343 0 R 344 0 R 345 0 R 346 0 R 347 0 R 348 0 R] /K 121 0 R >> /K 172 0 R << Further, defendants allegedly represented to investors that Theranos had a profitable and revenue-generating business relationship with the United States Department of Defense and that Theranoss technology had deployed to the battlefield when, in truth, Theranos had limited revenue from military contracts and its technology was not deployed in the battlefield. /K 51 /S /LBody 103 0 obj << /K 230 0 R /Pg 253 0 R << >> /S /P endobj /Lang (EN-US) >> /P 343 0 R 27 0 obj /Diagram /Figure Ms Holmes faces 12 fraud charges over her . 376 0 obj /S /LBody Holmes unflappability may have made it difficult for Theranos board members and prospective clients to raise or press on with the right questions at the right time. Moreover, Theranos and Holmes made "false and misleading statements" in press accounts to bolster the startup's profile. >> /K 7 284 0 obj /Lang (EN-US) /S /LBody 321 0 obj /P 333 0 R 101 0 obj >> 194 0 R null null null 195 0 R null null null 196 0 R null 35 0 obj But constantly focusing on a desired future state may have the effect of giving extra highlight to the positives of a distant vision at the expense of the operational challenges that are taking place in the here and now. /Lang (EN-US) After asking questions about Theranos continued losses and lack of revenue, prosecutors showed Yam a document they said was shared with investors; it projected $140 million in revenue in 2014 and $990 million in 2015. /Lang (EN-US) We just didn't know what new form it would take. /Filter /FlateDecode /P 273 0 R 313 0 obj /P 63 0 R /S /L 62 0 obj /MediaBox [0 0 612 792] /S /P /S /LI /Annots [] endobj /Pg 258 0 R That innovation combined with the use of technology to build a somewhat bulkier though still miniature and portable yet more reliable version of the micro-Lab would have provided plenty of opportunity to make strides towards the dream of empowering people with reliable, timely and inexpensive blood testing. /P 287 0 R /Type /Pages /K [380 0 R 381 0 R] /K 198 0 R Palantir has . /StructParents 7 289 0 obj /P 33 0 R /K 133 0 R /Type /Pages /K 2 /Lang (EN-US) /CropBox [0 0 612 792] 380 0 obj << /P 380 0 R The defendants also represented to investors that Theranos would generate over $100 million in revenues and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenues in 2015 when, in truth, the defendants knew Theranos would generate only negligible or modest revenues in 2014 and 2015. >> >> /P 48 0 R 95 0 R 96 0 R 97 0 R 98 0 R 99 0 R 100 0 R 101 0 R 102 0 R 103 0 R 104 0 R /Resources 488 0 R /Rotate 0 >> /P 380 0 R /Length 10 0 R << /Parent 12 0 R application/pdf endobj << /Pg 235 0 R /K 7 /P 379 0 R /P 8 0 R << >> << endobj /P 8 0 R /CropBox [0 0 612 792] /Pg 254 0 R /Pg 258 0 R Claim This Company. >> /Pg 235 0 R 15 0 obj Theranos gambit may have extended over time precisely because all four biases played a role in the making of a dream that was never fully tested against the constraints of reality. /K 8 /P 8 0 R /S /LI /Annots [] << endobj /P 8 0 R According to the indictment, Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranoss blood testing laboratory services, even though the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests. 168 0 obj 387 0 obj endobj endobj /P 8 0 R >> /S /LI /Lang (EN-US) Answer 1. /P 3 0 R Follow Mike Snider on Twitter:@mikesnider. /S /LI When he sentenced Holmes, U.S. District Judge Edward Davila pushed to April 27 her report date to a prison in Byron, Texas, so she could give birth to her second child before being incarcerated. 117 0 R null null null 118 0 R null null] 296 0 obj /Count 5 /Lang (EN-US) /Count 24 282 0 obj 14 [null null 186 0 R null null null 187 0 R null null null >> endobj /P 8 0 R /S /LI 121 0 obj /Lang (EN-US) endobj /K 38 << 61 0 obj Theranos is a now-defunct healthcare technologystartup founded by disgraced Stanford drop-out Elizabeth Holmes. << 23 [83 0 R 84 0 R 85 0 R 86 0 R 87 0 R 88 0 R 89 0 R 90 0 R 91 0 R 92 0 R 64 0 obj endobj /P 48 0 R /Pg 235 0 R /SourceModified (D:20180314151216) 275 0 obj endobj Using a "nanotainer" (a small device designed to draw, retain, and analyze a . 12 [null null null 172 0 R null null null null 173 0 R null 150 0 obj endobj Brian Grossman had 20 years of experience in the healthcare space but his firm, PFM Health Sciences, invested $96 . /S /LI /Rotate 0 The data presented on this page does not represent the view of Theranos and its employees or that of Zippia. endobj /K 12 >> Easy acce View the full answer endobj 326 0 obj endobj << >> The Theranos founder intentionally deceived investors, a US . endobj /Lang (EN-US) /MediaBox [0 0 612 792] endobj endobj /P 339 0 R /Pg 241 0 R /K 170 0 R 256 0 obj /P 55 0 R /S /LI endobj /S /P /K 134 0 R >> Instead, Theranos continued to produce mounting losses. >> 24 0 obj The national average salary for a Theranos employee in the United States is $44,094 per year. >> 307 0 obj The defendants also represented that the analyzer could produce results that were more accurate and reliable than those yielded by conventional methodsall at a faster speed than previously possible.
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