Elizabeth Holmes: How Theranos founder went from billionaire darling of Silicon Valley to the brink of prison
“Don’t worry about the future, we’re in good hands.”
So said former US president Bill Clinton in 2015, as he introduced Elizabeth Holmes to an adoring New York crowd.
It seemed an uncontroversial statement at the time, as he hailed the achievements of a woman who had become America’s youngest self-made female billionaire after taking Silicon Valley by storm.
A hub for the world’s biggest tech companies, the only thing more synonymous with this infamous stretch of northern California than scientific breakthroughs and innovative gadgets were the rich white men who were invariably behind them – turtleneck jumpers and smart trouser-sneaker combos in tow.
Bill Clinton and Elizabeth Holmes at the Clinton Global Initiative’s 2015 meeting in New York
Holmes – a high school computer whizz turned Harvard dropout – was a bona fide gatecrasher, her stunning rise to the cover of Forbes magazine powered by her founding health technology firm Theranos and its rapid ascent to a peak valuation of $9bn. Look back on what it was promising to deliver, and it’s easy to see why.
Revolutionary blood tests were at the heart of its pitch, ones which could be performed at phenomenal speed with merely a small drop required – and no needles.
Holmes’s catchphrase became “change the world”, such were her assertions that the equipment her company had developed could test for dozens of diseases in one fell swoop.
She insisted it would change healthcare in the US, not just by speeding up and streamlining trips to the doctor, but by eventually rendering such visits obsolete by selling the gizmos in stores.
It took more than a decade for such claims to be exposed as the stuff of science-fiction, but Holmes’s shameless willingness to talk the talk regardless helped her become one of the darlings of Silicon Valley, raising hundreds of millions from investors and venture capitalists.
As Theranos grew, her public image was crafted to perfection to make her the perfect face of one of America’s most exciting companies, famously adopting the aforementioned turtlenecks from her idol Steve Jobs, the late Apple founder, and speaking in a strikingly deep voice which added extra gravitas to her every word.
Fame isn’t for everyone, but for Holmes it seemed elementary.
Nothing, it seemed, could go wrong. Until it did. Big time.
Theranos reached a value of $9bn
How the lie was exposed
Holmes’s empire began to unravel upon the publication of a bombshell expose by The Wall Street Journal, which reported that Theranos’s technology was profoundly flawed.
The devices used to collect people’s blood, which the firm dubbed “nanotainers”, were said to be so far off the mark that Theranos had in fact been using other companies’ equipment to carry out blood tests in its laboratories.
The most distressing piece of the Journal’s report was that the company’s ex-chief scientist, Briton Ian Gibbons, had tried to take his own life after telling his wife the tech did not work. He died shortly after from liver failure.
The stories emerged just a month after Holmes had shared the stage with Bill Clinton.
Silicon Valley is home to some of the biggest names in tech
As described by Sky’s Ian King when Theranos went bust in 2018, three years after the Journal’s report, key to the company keeping the wool fixed firmly over the public’s eyes until then had been an almost cult-like culture among its executives and staff, and one of extreme secrecy.
Neither are unique to Silicon Valley – some of the big tech personalties who have emerged over the years remain an odd focus of worship in some corners of the internet – but rarely have they combined to such destructive effect.
The journalist who broke the story, John Carreyrou, has since written a book on the scandal called Bad Blood, which stands to be turned into a feature film. There’s perhaps a cruel irony that it’s being produced by Apple, the company whose late co-founder was a source of such inspiration for Holmes.
Her rise and fall also inspired a hit podcast series called The Dropout, and a subsequent Hulu series of the same name starring Amanda Seyfried.
The show presents Holmes as a brave, smart, single-minded young woman determined to succeed, and she is initially easy to root for. As Apple designer Ana Arriola tells Holmes in a scene when she attempts to recruit her following the launch of the first iPhone: “Honestly, it’s just really exciting to me that you’re a young female CEO, instead of a cocky little boy in a sweatshirt.”
But Holmes’s goal of becoming a wealthy star of the biotech scene quickly overcomes all other instincts – including a willingness to tell the truth.
It’s a trait that left some staff feeling deeply uneasy, not just Gibbons and Arriola, who describes her time at Theranos on her LinkedIn page as “altruism through corrupt unethical science-fiction”.
Amanda Seyfried as Holmes in The Dropout: Pic Disney+
How a life unravelled
Carreyrou’s revelations, which Holmes has admitted trying to silence, sparked investigations by medical and financial regulators in the US. In a development which would once have been unthinkable, the now 34-year-old was facing criminal charges in 2018.
She and the president of Theranos, ex-lover Romesh Balwani (who she has since accused of sexual assault), were accused of engaging “in a multi-million-dollar scheme to defraud investors, a separate scheme to defraud doctors and patients”, and each faced two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Former Theranos president Ramesh Balwani
Among those defrauded investors were the likes of Rupert Murdoch and the American pharmacy giant Walgreens, while similarly big names had been attracted to Theranos’s board of directors.
Among them were former secretaries of state Henry Kissinger and George Shultz, and an ex-director of the US Centers for Disease Control.
All of them had been hoodwinked by Holmes, who had founded Theranos aged just 18 and quickly learned how to tell her backers exactly what they wanted – and she needed them – to hear.
As Eric Jackson, a startup founder and author of The PayPal Wars, put it to Sky News: “There is almost endemic to the system a need to, I don’t want to say exaggerate, but to tell a narrative that’s compelling to investors. At a certain point hype does have to be in line with credibility, if not you’re in an instance of good old-fashioned fraud.”
Whether it was a matter of delusion, falling victim to the treacherous “fake it ’til you make it” culture that permeates American startups, or something more sinister, Holmes maintained during her trial that she initially believed her company’s purportedly revolutionary blood tests were real.
“I wanted to convey the impact the company could make for people and for health care,” she told the court of her meetings with investors.
To prosecutors, such assertions were the consequence of a woman who was “out of time and out of money”.
Having launched her company by repurposing family funds meant for her Harvard degree, taking it mainstream meant doing whatever it took to attract her big time investors and venture capitalists.
The once-enamoured former US secretary of defence Jim Mattis, who joined the company board, told the trial: “There just came a point when I didn’t know what to believe about Theranos any more.”
Holmes arrives for a hearing in San Jose in 2019
‘She chose lies when we needed truth’
Holmes’s sentencing on Friday comes after she was convicted of fraud earlier this year, her years-long scam having failed to move the jury as it had done her backers.
After a case which gripped the world, just as her rise to fame had done, US federal prosecutors want the judge to jail her for 15 years, a term considered appropriate for “one of the most substantial white collar offences Silicon Valley or any other district has seen”.
Balwani has been left waiting until next month for his sentencing, having also been convicted of multiple fraud counts during a separate trial.
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In a 46-page brief last week, assistant US attorney Robert S Leach wrote of Holmes: “She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors.
“Elizabeth Holmes’ crimes were not failing, they were lying – lying in the most serious context, where everyone needed her to tell the truth.”
A counter document from Holmes’s attorneys, totalling 82 pages, insisted her reputation had been permanently and unfairly destroyed, given it had turned her into a “caricature to be mocked and vilified”.
They are appealing for a sentence of no more than 18 months.
More than 130 friends, family, former investors and employees have also submitted letters to the judge, Edward Davila of San Jose, California, to appeal for leniency.
Senator Cory Booker used his to hail Holmes, still only 38, as someone who “can, despite mistakes, make the world a better place”.
Whether that’s true or not, she won’t be able to from behind bars.
US
Boy, 8, and girl, 10, killed in US Catholic school shooting named – as father brands attacker ‘a coward’
The families of two children killed in the US Catholic school shooting have said their “hearts are broken” and branded the attacker a “coward”.
Fletcher Merkel who was eight and 10-year-old Harper Moyski were killed during mass at Annunciation Catholic School in Minneapolis on Wednesday.
Eighteen other people were injured, including children aged between six and 15 and three adults in their 80s.
Police said Robin Westman, a male born as Robert Westman, opened fire with a rifle through the windows of the school’s church as children sat in pews.
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New details released of US school shooting
‘Our hearts are broken’
Harper’s parents, Michael Moyski and Jackie Flavin, remembered her as “a bright, joyful, and deeply loved 10-year-old whose laughter, kindness, and spirit touched everyone who knew her”.
“Our hearts are broken not only as parents, but also for Harper’s sister, who adored her big sister and is grieving an unimaginable loss. As a family, we are shattered, and words cannot capture the depth of our pain,” their statement said.
They urged leaders and communities to “take meaningful steps to address gun violence and the mental health crisis in this country.”
“Change is possible, and it is necessary – so that Harper’s story does not become yet another in a long line of tragedies,” the statement added.
The family of Fletcher Merkel said there was a ‘hole in our hearts’. Pic: Family handout/AP
‘Fletcher loved his family’
In a statement reported by Sky’s US partner network NBC News, Fletcher’s father Jesse Merkel blamed the “coward” killer for why the boy’s family can’t “hold him, talk to him, play with him, and watch him grow into the wonderful young man he was on the path to becoming”.
He said: “Fletcher loved his family, friends, fishing, cooking, and any sports that he was allowed to play.
“While the hole in our hearts and lives will never be filled, I hope that in time, our family can find healing.”
Mr Merkel also praised “the swift and heroic actions of children and adults alike from inside the church”.
“Without these people and their selfless actions, this could have been a tragedy of many magnitudes more. For these people, I am thankful,” he added.
Families and loved ones reunite at the scene after the shooting. Pic: Reuters
Mayor calls for assault weapon ban
It comes after Minneapolis mayor Jacob Frey called for a statewide and federal ban on assault weapons, a day after the deadly school shooting.
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Minneapolis mayor urges assault weapons ban
“Thoughts and prayers are not going to cut it. It’s on all of us to see this through,” the mayor said at a news conference. “We need a statewide and a federal ban on assault weapons.
“We need a statewide and a federal ban on high-capacity magazines. There is no reason that someone should be able to reel off 30 shots before they even have to reload.
“We’re not talking about your father’s hunting rifle gear. We’re talking about guns that are built to pierce armour and kill people.”
Meanwhile, Minneapolis police chief Brian O’Hara gave an update on the investigation, saying the suspect had fired 116 rifle rounds into the church.
“It is very clear that this shooter had the intention to terrorise those innocent children,” he added, before saying the killer “fantasised” about the plans of other mass shooting attackers and wanted to “obtain notoriety”.
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Thomas Klemond, interim CEO of Minneapolis’s main trauma hospital Hennepin Healthcare, said at an earlier news conference that the hospital was treating nine patients injured in the shooting.
One child at the hospital was in a critical condition, he added.
Children’s Minnesota Hospital also said that three children remain in its care as of Thursday morning.
Police have released new details about the killer in the US Catholic school shooting – including that they “idolised” mass murderers and they wanted to “watch children suffer”.
Two children, aged eight and 10, were killed during mass at Annunciation Catholic School in Minneapolis on Wednesday.
The victims have been named as Fletcher Merkel, 8, and Harper Moyski, 10, – click here to read more
Eighteen other people were injured, including children aged between six and 15 and three adults in their 80s.
Police said Robin Westman, a male born as Robert Westman, opened fire with a rifle through the windows of the school’s church as children sat in pews.
Robin Westman
Almost 120 rifle rounds fired, police chief says
In a news conference on Thursday, Minneapolis Police Chief Brian O’Hara said the attacker fired 116 rifle rounds into the church.
“It is very clear that this shooter had the intention to terrorise those innocent children,” he added.
The police chief said the killer “fantasised” about the plans of other mass shooting attackers and wanted to “obtain notoriety”.
When asked about the attacker obtaining the firearms used legally, Mr O’Hara said that they did not have a criminal history or any diagnosed mental health disorders.
While they had potentially concerning social media posts, the police chief added that there was no evidence to suggest that Westman was legally barred from purchasing a firearm.
People mourn outside the Annunciation Catholic School in Minneapolis. Pic: Reuters
Suspect ‘wanted to watch children suffer’
Joe Thompson, acting US attorney for Minnesota, also said evidence recovered of the killer’s plans showed “pure indiscriminate hate” and that they “idolised some of the most notorious school shooters and mass murderers in our country’s history”.
“I won’t dignify the shooter’s words by repeating them,” Mr Thompson added. “They are horrific and vile, but in short, the shooter wanted to watch children suffer.”
Earlier, the mayor of Minneapolis called for a statewide and federal ban on assault weapons after the deadly attack, saying “thoughts and prayers are not going to cut it”.
“There is no reason that someone should be able to reel off 30 shots before they even have to reload,” Jacob Frey said.
“We’re not talking about your father’s hunting rifle gear. We’re talking about guns that are built to pierce armour and kill people.”
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Minneapolis mayor urges assault weapons ban
Thomas Klemond, interim CEO of Minneapolis’s main trauma hospital Hennepin Healthcare, said at a news conference that the hospital was treating nine patients injured in the shooting.
One child at the hospital was in a critical condition, he added.
Children’s Minnesota Hospital also said that three children remain in its care as of Thursday morning.
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In a post on Facebook, the hospital said “there are no words to describe the overwhelming pain many are feeling”, adding: “We feel that pain with you.
“To the entire Annunciation community, you have our deepest condolences. During this time of unimaginable grief and loss, we want you to know that we at Children’s Minnesota are with you.
“We will always be here to care for you. And in this moment, we hurt alongside you.”
US
Boy, 8, killed in US Catholic school shooting named – as victim’s father brands attacker ‘a coward’
An eight-year-old boy killed in the US Catholic school shooting has been named – as his father branded the attacker a “coward”.
Fletcher Merkel was one of two children killed during mass at Annunciation Catholic School in Minneapolis on Wednesday.
Eighteen other people were injured, including children aged between six and 15 and three adults in their 80s.
Police said Robin Westman, a male born as Robert Westman, opened fire with a rifle through the windows of the school’s church as children sat in pews.
Please use Chrome browser for a more accessible video player
New details released of US school shooting
Dad says ‘Fletcher loved his family’
In a statement reported by Sky’s US partner network NBC News, Fletcher’s father Jesse Merkel blamed the “coward” killer for why the boy’s family can’t “hold him, talk to him, play with him, and watch him grow into the wonderful young man he was on the path to becoming”.
He added: “Fletcher loved his family, friends, fishing, cooking, and any sports that he was allowed to play.
“While the hole in our hearts and lives will never be filled, I hope that in time, our family can find healing.”
Mr Merkel said he prayed the family of the 10-year-old victim – who has not been identified – would also find peace.
“I’ve heard many stories accounting the swift and heroic actions of children and adults alike from inside the church,” he added.
“Without these people and their selfless actions, this could have been a tragedy of many magnitudes more. For these people, I am thankful.”
Families and loved ones reunite at the scene after the shooting. Pic: Reuters
Mayor calls for assault weapon ban
It comes after Minneapolis mayor Jacob Frey called for a statewide and federal ban on assault weapons, a day after the deadly school shooting.
Please use Chrome browser for a more accessible video player
Minneapolis mayor urges assault weapons ban
“Thoughts and prayers are not going to cut it. It’s on all of us to see this through,” the mayor said at a news conference. “We need a statewide and a federal ban on assault weapons.
“We need a statewide and a federal ban on high-capacity magazines. There is no reason that someone should be able to reel off 30 shots before they even have to reload.
“We’re not talking about your father’s hunting rifle gear. We’re talking about guns that are built to pierce armour and kill people.”
Meanwhile, Minneapolis police chief Brian O’Hara gave an update on the investigation, saying the suspect had fired 116 rifle rounds into the church.
“It is very clear that this shooter had the intention to terrorise those innocent children,” he added, before saying the killer “fantasised” about the plans of other mass shooting attackers and wanted to “obtain notoriety”.
Read more from Sky News:
Man ‘who impersonated Michael Jackson’ was ‘unfairly dismissed’
Concern as British couple detained in Iran ‘whisked’ to courtroom
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Thomas Klemond, interim CEO of Minneapolis’s main trauma hospital Hennepin Healthcare, said at an earlier news conference that the hospital was treating nine patients injured in the shooting.
One child at the hospital was in a critical condition, he added.
Children’s Minnesota Hospital also said that three children remain in its care as of Thursday morning.
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