Elizabeth Holmes: How Theranos founder went from billionaire darling of Silicon Valley to the brink of prison

Published

2 years ago

November 18, 2022

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“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.

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.

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.

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”.

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.

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.”

‘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

LA fires: Paris Hilton and Billy Crystal’s homes burn down as more celebrities evacuated

Published

47 mins ago

January 9, 2025

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LA fires: Paris Hilton and Billy Crystal's homes burn down as more celebrities evacuated

Hollywood celebrities are among thousands of people who have been evacuated in Los Angeles, some fleeing homes now burned to the ground.

Paris Hilton and actor Billy Crystal have both lost their houses as fires rip through parts of California, including exclusive suburbs home to film stars and billionaires.

Oscar-winning songwriter Diane Warren, talk show host Ricki Lake, actor Cary Elwes, and reality stars Spencer Pratt and Heidi Montag have also confirmed their homes have been destroyed.

US media is reporting that Eugene Levy, and Adam Brody and Leighton Meester, have lost their homes. The stars are yet to confirm this.

Sky News’ US correspondent Martha Kelner reported that Tom Hanks, Ben Affleck and Reese Witherspoon were among those evacuated.

Follow latest: At least five killed as flames spread

The blaze in Pacific Palisades, a hillside area between Santa Monica and Malibu dotted with celebrity homes, is one of at least five raging in California.

Thousands of firefighters are trying to contain the flames, with a new fire breaking out overnight in the Hollywood Hills, threatening a host of tourist sites including the Walk Of Fame.

‘The loss is overwhelming’

Hilton said she was “heartbroken beyond words” to see her Malibu home, where she has brought up her young children Phoenix and London, “burn to the ground on live TV”.

In a post on social media, she said: “This home was where we built so many precious memories. It’s where Phoenix took his first steps and where we dreamed of building a lifetime of memories with London.

“While the loss is overwhelming, I’m holding onto gratitude that my family and pets are safe.”

In a joint statement, US actor Crystal, known for films including When Harry Met Sally and Analyze This, and his wife Janice confirmed their home of 46 years was gone.

“Words cannot describe the enormity of the devastation we are witnessing and experiencing,” the couple said.

They added: “We raised our children and grandchildren here. Every inch of our house was filled with love. Beautiful memories that can’t be taken away.”

The Hills stars Pratt and Montag documented the escalation of the fire at their home on Snapchat, with Pratt saying: “I’m watching our house burn down on the security cameras.”

His sister, Stephanie, who also starred in The Hills, as well as Made In Chelsea, told Sky News yesterday that she did not know if her own home was okay.

“I talked to my neighbour last night and she told me that [Palisades Charter High School] had burnt down, and that’s directly behind me, and so had Gelson’s Supermarket which is adjacent,” she said.

“I just can’t reach anyone to see if my house is okay. I just Googled it and it said that it’s destroyed and terrible… I don’t know if my house is there.”

Jamie Lee Curtis confirmed her home was safe but said “our beloved neighbourhood is gone” as she shared videos of the blaze on her Instagram.

Writer and actor Steve Guttenberg told Sky News he witnessed panic attacks and despair as he tried to help residents as the flames closed in.

The Police Academy star said: “There were mothers trying to find their kids.

“There were panic attacks. It was terrible. And that’s when the fires just lit up.”

Other celebrities who have fled their properties include the award-winning actor James Woods, who said he had been safely evacuated from his home in Pacific Palisades.

But he added in a post on X: “I do not know at this moment if our home is still standing.”

Actor Mark Hamill, best known for playing Luke Skywalker in the Star Wars films, also posted on social media on Wednesday saying he evacuated his home in Malibu and his family were “fleeing for our lives”.

This Is Us actress Mandy Moore was also forced to leave her home with her children and pets, saying on Instagram they had found temporary refuge with friends.

The actress said: “Trying to shield the kids from the immense sadness and worry I feel.

“Praying for everyone in our beautiful city. So gutted for the destruction and loss. Don’t know if our place made it.”

An awards ceremony planned for this weekend has been pushed back by two weeks, while the Oscar nominations next week have also been postponed.

According to Velvet Ropes, which maps celebrity properties, Matt Damon, Steven Spielberg, Hilary Swank and Sally Field all have homes close to where fires are raging.

Dr Dre, Tyra Banks, Martin Short, Anna Faris, Milo Ventimiglia, Linda Cardellini, Mary McDonnell, Adam Sandler, Miles Teller, and Jennifer Love Hewitt are also said to have houses in affected areas.

In neighbouring Malibu, which was also affected by fires in December, stars including Beyonce and Jay-Z, Kim Kardashian, Lady Gaga and Billie Eilish are said to be among the celebrity residents.

The Palisades blaze has already burnt through nearly 16,000 acres of land, while the Eaton fire, covering over 10,000 acres, has caused the death of five people.

Three other fires, the Hurst fire, Lidia fire and Sunset fire, are all raging as emergency services battle to bring them under control.

US

All five living US presidents pictured together at funeral of Jimmy Carter

Published

4 hours ago

January 9, 2025

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All five living US presidents pictured together at funeral of Jimmy Carter

All five of the living US presidents have been pictured together at the funeral of Jimmy Carter.

The 39th US president died at the age of 100 on 29 December, in his hometown of Plains, Georgia.

President Joe Biden gave a eulogy to his fellow Democrat at the state funeral at the Washington National Cathedral.

He appeared alongside president-elect Donald Trump and other former presidents Barack Obama, George W Bush and Bill Clinton and their respective spouses.

Vice president Kamala Harris, who lost the 2024 election to Mr Trump, was also seated with the group alongside her husband.

It’s the first time the Democrat nominee has been seen with the president-elect since the US election, and after she certified Mr Trump’s election win on Monday.

Before the service, Mr Trump was also seen shaking hands with former vice president Mike Pence – the first time the pair have been seen in public together since leaving the White House in 2021.

Prior to that, Mr Pence had refused to back Mr Trump’s claim he had won the 2020 election.

Mr Obama and Mr Trump were also seen talking before the service began.

During his eulogy, Mr Biden said Mr Carter taught him the importance of treating “everyone with dignity and respect.”

“To young people, to anyone in search of meaning and purpose, study the power of Jimmy Carter’s example,” the president said. “Character, faith, love – a true patriot.”

Joshua Carter, the former president’s grandson, also said at the service: “He built houses for people who needed homes.

“He eliminated diseases in forgotten places. He waged peace anywhere in the world, wherever he saw a chance. He loved people.”

From 4 January, Mr Carter’s body was carried by a motorcade through Plains, before heading to the Carter Presidential Center in Atlanta.

The former president’s remains were then flown to Maryland and transferred in a ceremony to a hearse, which was carried in a motorcade to the US Navy Memorial in Washington to honour Mr Carter’s service as a lieutenant in the Navy.

He has since been lying in state at the Capitol Building, where the public could pay respects from Tuesday evening through to Thursday morning

Mr Carter’s body will now be returned to his hometown in Georgia for a second service and burial.

There, a private ceremony will be held at Maranatha Baptist Church before another procession through Plains, where supporters are being encouraged to line the streets for the motorcade.

Mr Carter will then be buried on his property next to his late wife, Rosalynn, who died in 2023.