Morning Briefing
Summaries of health policy coverage from major news organizations
Criminal Charges Filed Against Theranos' Founder Elizabeth Holmes, Ex-President Ramesh Balwani
The New York Times: Theranos Founder Elizabeth Holmes Indicted On Fraud Charges
Elizabeth Holmes, the disgraced founder of Theranos, the lab testing company that promised to revolutionize health care, and its former president, Ramesh Balwani, were indicted on Friday on charges of defrauding investors out of hundreds of millions of dollars as well as deceiving hundreds of patients and doctors. The criminal charges were the culmination of a rarity in Silicon Valley — federal prosecution of a technology start-up. This one boasted a board stacked with prominent political figures and investors, and a startling valuation of $9 billion just a few years ago. (Abelson, 6/15)
The Associated Press: Theranos CEO Elizabeth Holmes Charged With Criminal Fraud
Holmes, who was once considered a wunderkind of Silicon Valley, and her former Chief Operating Officer Ramesh Balwani, are charged with two counts conspiracy to commit wire fraud and nine counts of wire fraud each, the U.S. Attorney's Office for the Northern District of California said late Friday. If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of $2.75 million each. Prosecutors allege that Holmes and Balwani deliberately misled investors, policymakers and the public about the accuracy of Theranos' blood-testing technologies going back to at least 2013. Holmes, 34, founded Theranos in Palo Alto, California, in 2003, pitching its technology as a cheaper way to run dozens of blood tests. (6/15)
The Wall Street Journal: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani
The indictments of Ms. Holmes and Ramesh “Sunny” Balwani, Theranos’s former president and chief operating officer who was also Ms. Holmes’s boyfriend, are the culmination of a 2½-year investigation by the U.S. attorney’s office in San Francisco, sparked by articles in The Wall Street Journal that raised questions about the company’s technology and practices. (Carreyrou, 6/15)
The Hill: Theranos Founder Elizabeth Holmes Charged With Fraud
The Justice Department alleges that the two founders knew that their technology could not deliver on the promises they had been making to the media, investors and doctors. According to the indictment, the company gave doctors — and through them, their patients — “materially false and misleading information concerning the accuracy and reliability of Theranos’s blood testing services.” After signing up patients for blood tests with the promise that the technology could detect a range of diseases, Holmes and Balwani would transmit them results despite knowing that the tests were unreliable. (Neidig, 6/15)
San Jose Mercury News: Theranos' Holmes Indicted By Feds Over Blood-Test 'Fraud'
The fall of Holmes represents a cautionary Silicon Valley tale, demonstrating how a charismatic tech industry leader making grandiose claims about a disruptive new product can attract massive investments while allegedly bamboozling investors, consumers and a high-profile corporate partner. Before Theranos’ claims unraveled — starting with a Wall Street Journal exposé — Holmes had been widely praised as a Silicon Valley wunderkind pushing forward technology’s cutting edge. (Baron, 6/15)
Stat: Theranos Founder Elizabeth Holmes Indicted For Alleged Fraud; Out As CEO
Meanwhile, Theranos may soon go out of business. The company has repeatedly laid off employees in an effort to cut costs and is staring down debts that could force it to liquidate as early as this summer, the Wall Street Journal has reported. Both Holmes and Balwani appeared in federal court in San Jose, Calif., on Friday, according to the indictment. Their case has been assigned to Judge Lucy Koh, who’s handled a number of high-profile cases involving Silicon Valley. (Robbins and Garde, 6/15)
