Elizabeth Holmes: How Theranos founder went from billionaire darling of Silicon Valley to behind bars
“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 Stanford 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 to more than 11 years in prison 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 had asked 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 appealed 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.
A state of emergency has been declared in South Carolina as wildfires caused by dry and gusty conditions have forced people to evacuate some areas.
More than 175 fires covered 6.6 square miles in the state on Sunday as the National Weather Service warned of an increased risk of blazes in the region.
The number of fires was down to 163 by early Monday, the state’s forestry commission said.
South Carolina governor Henry McMaster declared a state of emergency on Sunday to support the wildfire response effort and a state-wide burning ban is in effect.
People in eight neighbourhoods were forced to evacuate as several fires raged in the state’s Horry County, officials said.
Soldiers used two Blackhawk helicopters to drop water 600 gallons at a time on the blazes, the South Carolina National Guard said on Sunday.
Meanwhile, firefighters made progress containing a fire in Carolina Forest, where people had been ordered to evacuate several neighbourhoods, according to Horry County Fire Rescue.
Footage showed some people running down the street as smoke filled the sky.
However, Horry County Fire Rescue announced by late Sunday that Carolina Forest evacuees could return home.
The Red Cross of South Carolina said approximately 135 Carolina Forest residents had taken shelter in a county recreation centre.
Smoke is seen rising from fires in Horry County. Pic: AP/Horry County Fire Rescue
The fire in the area had burned 2.5 square miles as of Sunday evening, the South Carolina Forestry Commission estimated.
No structures had succumbed to the blaze and no injuries had been reported as of Sunday morning, officials said.
It came as fire crews were working to contain multiple wildfires burning in four forests across North Carolina.
The largest covered around 0.6 square miles and burned in Uwharrie National Forest – about 50 miles east of Charlotte.
The North Carolina Forest Service said on Sunday that it had been made progress on the fire, reaching about one-third containment.
People flee an area in Myrtle Beach. Pic: AP
The small southwestern town of Tryon in Polk County, North Carolina, had urged some residents to evacuate on Saturday as a fire spread rapidly there.
The evacuations remained in effect on Sunday.
A decision on whether to lift the evacuation orders was expected to be made on Monday after intentional burns are set to try to stop the fire from spreading.
That fire had burned about 0.8 square miles as of Sunday evening, with 0% containment, according to the Polk County Emergency Management and Fire Marshal’s office.
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A helicopter drops water to help contain a fire in the Carolina Forest area. Pic: AP
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The North Carolina Forest Service was conducting water drops and back-burning operations on the ground and residents should expect a lot of smoke during those operations, officials said.
It comes as at least six active fires were burning in Georgia on Sunday, with nearly 5.8 miles burned in a seven-day span that brought the region gusty winds and low humidity, according to a Georgia Forestry Commission fire summary.
Officials have not said what caused any of the fires.
The dry and gusty conditions fuelling the fires are expected to fade as a cold front pushes out the dry air mass over the southeast of the US and brings rain by Tuesday, the National Weather Service said.
The convergence of warmth, dry air and gusty winds is not inconsistent with the season’s La Niña weather phenomenon, which is associated with warmer, drier winters in the Carolinas, according to North Carolina State University.
The blazes come after two wildfires in Los Angeles killed 29 people and scorched thousands of acres across 24 days.
More than 18,000 structures were damaged or destroyed in the deadly Eaton and Palisades blazes, which swept across California in January.
Cryptocurrency prices have jumped after Donald Trump revealed he would like Bitcoin and other lesser-traded tokens to be in a new US strategic crypto reserve.
He said his January executive order on digital assets would create a stockpile of currencies including Bitcoin, Ethereum, XRP, Solana and Cardano (ADA).
The names had not previously been announced.
The American president said in a post on Truth Social: “A US Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA.”
“I will make sure the US is the Crypto Capital of the World.”
“And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve,” he said in a follow-up post. “I also love Bitcoin and Ethereum!”
Bitcoin, the world’s largest cryptocurrency by market value, rose over 11% to $94,164 after Sunday’s announcement.
Ethereum, the second-largest cryptocurrency, was up around 13% at $2,516.
XRP surged 33% while the token tied to Solana jumped 25%. Cardano’s coin soared more than 60%.
Bitcoin was trading up around 20% from last week’s lows.
US President Donald Trump signed an executive order on cryptocurrencies in January. Pic: Reuters
The total cryptocurrency market rose about 10%, or more than $300bn (£238bn), in the hours since the announcement, according to cryptocurrency data and analysis company CoinGecko.
This is the first time Mr Trump has specified his support for a crypto “reserve” rather than a “stockpile”. While the former assumes actively buying crypto in regular installments, a stockpile would not sell any of the crypto currently held by the US government.
Mr Trump is hosting the first White House Crypto Summit on Friday, and investors will be watching closely for more clues about the direction of the reserve plans.
His family have also launched their own coins, including his wife Melania.
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Mr Trump first introduced the idea of a Bitcoin stockpile, which would “keep 100% of all the Bitcoin the US government currently holds or acquires into the future” last summer at major industry conference Bitcoin 2024 in Nashville.
After his re-election to the White House in November, there were more calls for a strategic Bitcoin reserve, helping to send the price of the flagship cryptocurrency to new all-time highs.
Under his Democratic predecessor, Joe Biden, regulators cracked down on the industry in an attempt to protect Americans from fraud and money laundering.
Under Mr Trump, the Securities and Exchange Commission has withdrawn investigations into several crypto companies and dropped a lawsuit against Coinbase, the largest crypto exchange in the US.
But in recent weeks, crypto prices have fallen sharply, with some of the biggest digital currencies erasing nearly all of the gains made after Mr Trump’s election win triggered excitement across the industry.
US
US speaker suggests Zelenskyy might need to resign as Lord Mandelson suggests Ukraine commits to ceasefire before Russia
US Speaker Mike Johnson has suggested Volodymyr Zelenskyy might need to leave office in order for Ukraine to achieve a peace deal with Russia, as Lord Mandelson says Kyiv should commit to a ceasefire before Russia.
“Something has to change,” Mr Johnson told NBC.
“Either he needs to come to his senses and come back to the table in gratitude or someone else needs to lead the country to do that,” he added, referring to Mr Zelenskyy.
The Republican said “it’s up to the Ukrainians to figure that out”.
Meanwhile Lord Mandelson, the UK’s ambassador to the US, told ABC News: “I think that Ukraine should be the first to commit to a ceasefire and defy the Russians to follow.
“And then, as part of the unfolding plan for this negotiation, the Europeans and perhaps some other countries too have got to consider how they are going to put forces on the ground to play their part in providing enduring security and deterrence for Ukraine.”
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The remarks came two days after a disastrous meeting between the Ukrainian president and Donald Trump and his vice president JD Vance descended into a shouting match in the Oval Office.
Mr Johnson said: “What President Zelenskyy did in the White House was effectively signal to us that he’s not ready for that yet and I think that’s a great disappointment.”
The fallout left a proposed agreement between Ukraine and the US to jointly develop Ukraine’s natural resources in limbo.
Mike Johnson. Pic: Reuters
The idea of Mr Zelenskyy stepping aside also came up on Friday after the Oval Office meeting, with US Republican senator Lindsey Graham saying the Ukrainian leader “either needs to resign or send somebody over that we can do business with, or he needs to change”.
Meanwhile, White House national security adviser Mike Waltz said it is not clear Mr Zelenskyy is prepared to secure lasting peace with Russia.
“We need a leader that can deal with us, eventually deal with the Russians and end this war,” Mr Waltz told CNN when asked whether Mr Trump wants Mr Zelenskyy to resign.
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Every time Zelenskyy thanks US
“If it becomes apparent that President Zelenskyy’s either personal motivations or political motivations are divergent from ending the fighting in his country, then I think we have a real issue on our hands.”
US secretary of state Marco Rubio said he had not spoken to Mr Zelenskyy since the spat on Friday.
“We’ll be ready to re-engage when they’re ready to make peace,” Mr Rubio told ABC.
Marco Rubio during the meeting between Mr Zelenskyy and Mr Trump. Pic: Reuters
But Democratic senator Amy Klobuchar told ABC she was “appalled” by the clash in the Oval Office and said she met Mr Zelenskyy before he went to the White House on Friday and he had been excited to sign an expected minerals deal.
“There is still an opening here” for a peace deal, she said.
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It comes as Sir Keir Starmer hosted a summit between Mr Zelenskyy and other European leaders in an effort to get a peace plan back on track.
The prime minister said the UK, France and Ukraine would work on a ceasefire plan to present to the US.
Sir Keir, who visited Washington on Thursday, said he believes Mr Trump does want a “lasting peace” but warned Europe is in a “moment of real fragility” and he would not trust the word of Vladimir Putin.
Mr Zelenskyy will later meet the King.
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