Rise and Fall of Theranos CEO Who Now Delayed Prison

Holmes’ family moved when she was young, from Washington, D.C. to Houston.

Source: Fortune

When she was 7, Holmes tried to invent her own time machine, filling up an entire notebook with detailed engineering drawings. At the age of 9, Holmes told relatives she wanted to be a billionaire when she grew up. Her relatives described her as saying it with the “utmost seriousness and determination.”

Source: CBS News, Bad Blood: Secrets and Lies in a Silicon Valley Startup

Holmes had an “intense competitive streak” from a young age. She often played Monopoly with her younger brother and cousin, and she would insist on playing until the end, collecting the houses and hotels until she won. If Holmes was losing, she would often storm off. More than once, she ran directly through a screen on the door.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

It was during high school that Holmes developed her work ethic, often staying up late to study. She quickly became a straight-A student, and even started her own business: she sold C++ compilers, a type of software that translates computer code, to Chinese schools.

Source: Fortune, Bad Blood: Secrets and Lies in a Silicon Valley Startup

Holmes started taking Mandarin lessons, and part-way through high school, talked her way into being accepted by Stanford University’s summer program, which culminated in a trip to Beijing.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Inspired by her great-great-grandfather Christian Holmes, a surgeon, Holmes decided she wanted to go into medicine. But she discovered early on that she was terrified of needles. Later, she said this influenced her to start Theranos.

Source: San Francisco Business Times

Holmes went to Stanford to study chemical engineering. When she was a freshman, she became a “president’s scholar,” an honor which came with a $3,000 stipend to go toward a research project.

Source: Fortune

Holmes spent the summer after her freshman year interning at the Genome Institute in Singapore. She got the job partly because she spoke Mandarin.

Source: Fortune

As a sophomore, Holmes went to one of her professors, Channing Robertson, and said: “Let’s start a company.” With his blessing, she founded Real-Time Cures, later changing the company’s name to Theranos. Thanks to a typo, early employees’ paychecks actually said “Real-Time Curses.”

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Holmes soon filed a patent application for a “medical device for analyte monitoring and drug delivery,” a wearable device that would administer medication, monitor patients’ blood, and adjust the dosage as needed.

Source: Fortune, US Patent Office

By the next semester, Holmes had dropped out of Stanford altogether, and was working on Theranos in the basement of a college house.

Source: Wall Street Journal

Theranos’s business model was based around the idea that it could run blood tests, using proprietary technology that required only a finger pinprick and a small amount of blood. Holmes said the tests would be able to detect medical conditions like cancer and high cholesterol.

Source: Wall Street Journal

Holmes started raising money for Theranos from prominent investors like Oracle founder Larry Ellison and Tim Draper, the father of a childhood friend and the founder of prominent VC firm Draper Fisher Jurvetson. Theranos raised more than $700 million, and Draper has continued to defend Holmes.

Source: SEC, Crunchbase

Holmes took investors’ money on the condition that she wouldn’t have to reveal how Theranos’ technology worked. Plus, she would have final say over everything having to do with the company.

Source: Vanity Fair

That obsession with secrecy extended to every aspect of Theranos. For the first decade Holmes spent building her company, Theranos operated in stealth mode. She even took three former Theranos employees to court, claiming they had misused Theranos trade secrets.

Source: San Francisco Business Times

Holmes’ attitude toward secrecy and running a company was borrowed from a Silicon Valley hero of hers: former Apple CEO Steve Jobs. Holmes started dressing in black turtlenecks like Jobs, decorated her office with his favorite furniture, and like Jobs, never took vacations.

Source: Vanity Fair

Even Holmes’s uncharacteristically deep voice may have been part of a carefully crafted image intended to help her fit in in the male-dominated business world. In ABC’s podcast on Holmes called “The Dropout,” former Theranos employees said the CEO sometimes “fell out of character,” particularly after drinking, and would speak in a higher voice.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup, The Cut

Holmes was a demanding boss, and wanted her employees to work as hard as she did. She had her assistants track when employees arrived and left each day. To encourage people to work longer hours, she started having dinner catered to the office around 8 p.m. each night.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Shortly after Holmes dropped out of Stanford at age 19, she began dating Theranos president and COO Sunny Balwani, who was 20 years her senior. The two met during Holmes’ third year in Stanford’s summer Mandarin program, the summer before she went to college. She was bullied by some of the other students, and Balwani had come to her aid.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Balwani became Holmes’ No. 2 at Theranos despite having little experience. He was said to be a bully, and often tracked his employees’ whereabouts. Holmes and Balwani eventually broke up in spring 2016 when Holmes pushed him out of the company.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

In 2008, the Theranos board decided to remove Holmes as CEO in favor of someone more experienced. But over the course of a two-hour meeting, Holmes convinced them to let her stay in charge of her company.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Theranos quickly began securing outside partnerships. Capital Blue Cross and Cleveland Clinic signed on to offer Theranos tests to their patients, and Walgreens made a deal to open Theranos testing centers in their stores. Theranos also formed a secret partnership with Safeway worth $350 million.

Source: Wired, Business Insider

In 2011, Holmes hired her younger brother, Christian, to work at Theranos, although he didn’t have a medical or science background. Christian Holmes spent his early days at Theranos reading about sports online and recruiting his Duke University fraternity brothers to join the company. People dubbed Holmes and his crew the “Frat Pack” and “Therabros.”

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

At one point, Holmes was the world’s youngest self-made female billionaire with a net worth of around $4.5 billion.

Source: Forbes

Holmes was obsessed with security at Theranos. She asked anyone who visited the company’s headquarters to sign non-disclosure agreements before being allowed in the building, and had security guards escort visitors everywhere — even to the bathroom.

Holmes hired bodyguards to drive her around in a black Audi sedan. Her nickname was “Eagle One.” The windows in her office had bulletproof glass.

Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup

Around the same time, questions were being raised about Theranos’ technology. Ian Gibbons — chief scientist at Theranos and one of the company’s first hires — warned Holmes that the tests weren’t ready for the public to take, and that there were inaccuracies in the technology. Outside scientists began voicing their concerns about Theranos, too.

Source: Vanity Fair, Business Insider

By August 2015, the FDA began investigating Theranos, and regulators from the government body that oversees laboratories found “major inaccuracies” in the testing Theranos was doing on patients.

Source: Vanity Fair

By October 2015, Wall Street Journal reporter John Carreyrou published his investigation into Theranos’s struggles with its technology. Carreyrou’s reporting sparked the beginning of the company’s downward spiral.

Source: Wall Street Journal

Carreyrou found that Theranos’ blood-testing machine, named Edison, couldn’t give accurate results, so Theranos was running its samples through the same machines used by traditional blood-testing companies.

Source: Wall Street Journal

Holmes appeared on CNBC’s “Mad Money” shortly after the WSJ published its story to defend herself and Theranos. “This is what happens when you work to change things, and first they think you’re crazy, then they fight you, and then all of a sudden you change the world,” Holmes said.

Source: CNBC

By 2016, the FDA, Centers for Medicare & Medicaid Services, and SEC were all looking into Theranos.

Source: Wall Street Journal, Wired

Source: Business Insider

In March 2018, Theranos, Holmes, and Balwani were charged with “massive fraud” by the SEC. Holmes agreed to give up financial and voting control of the company, pay a $500,000 fine, and return 18.9 million shares of Theranos stock. She also isn’t allowed to be the director or officer of a publicly traded company for 10 years.

Source: Business Insider

Despite the charges, Holmes was allowed to stay on as CEO of Theranos, since it’s a private company. The company had been hanging on by a thread, and Holmes wrote to investors asking for more money to save Theranos. “In light of where we are, this is no easy ask,” Holmes wrote.

Source: Business Insider

In Theranos’ final days, Holmes reportedly got a Siberian husky puppy named Balto that she brought into the office. However, the dog wasn’t potty trained, and would go to the bathroom inside the company’s office and during meetings.

Source: Vanity Fair

In June 2018, Theranos announced that Holmes was stepping down as CEO. On the same day, the Department of Justice announced that a federal grand jury had charged Holmes, along with Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

Source: Business Insider, CNBC

Theranos sent an email to shareholders in September 2018 announcing that the company was shutting down. Theranos reportedly said it planned to spend the next few months repaying creditors with its remaining resources.

Source: Wall Street Journal

Around the time Theranos’ time was coming to an end, Holmes made her first public appearance alongside William “Billy” Evans, a 27-year-old heir to a hospitality property management company in California. The two reportedly first met in 2017, and were seen together in 2018 at Burning Man, the art festival in the Nevada desert.

Source: Daily Mail

Holmes is said to wear Evans’ MIT “signet ring” on a chain around her neck, and the couple reportedly posts photos “professing their love for each other” on a private Instagram account. Evans’ parents are reportedly “flabbergasted” at their son’s decision to marry Holmes.

—Nick Bilton (@nickbilton) February 21, 2019

Source: Vanity Fair, New York Post

It’s unclear where Holmes and Evans currently reside, but they were previously living in a $5,000-a-month apartment in San Francisco until April 2019. The apartment was located just a few blocks from one of the city’s top tourist attractions, the famously crooked block of Lombard Street.

Source: Business Insider

It was later reported that Holmes and Evans got engaged in early 2019, then married in June in a secretive wedding ceremony. Former Theranos employees were reportedly not invited to the wedding, according to Vanity Fair.

Source: Vanity Fair, New York Post

Besides the criminal case, Holmes was also involved in a number of civil lawsuits, including one in Arizona brought by former Theranos patients over inaccurate blood tests. The lawyers representing her in the Arizona case said in late 2019 they hadn’t been paid over a year and asked to be removed from Holmes’ legal team.

Source: Business Insider

Holmes’ lawyers in the federal case had tried to get the government’s entire case thrown out. In February 2020, Holmes caught a break after some of the charges against her were dropped when a judge ruled that some patients didn’t suffer financial loss.

Source: Business Insider

Amid the coronavirus outbreak, Holmes’ lawyers asked the judge in April 2020 to deem the case “essential” so the defense team could defy lockdown orders and continue to travel and meet face-to-face. The judge said he was “taken aback” by the defense’s pleas to violate lockdown.

Source: Business Insider

It soon become clear that the pandemic — and the health risks associated with assembling a trial in one — would make the July trial date unrealistic. Through hearings held on Zoom, the presiding judge initially pushed the trial back to October 2020 and later postponed it further to March 2021.

Source: Business Insider

In March 2021, Holmes requested another delay to the trial because she was pregnant. She asked to push back the trial to August 31, and her request was granted. Holmes reportedly gave birth to the child in July.

Source: Business Insider, CNBC

Heading into the trial, Holmes felt “wronged, like Salem-witch-trial wronged,” says a person who used to work with her closely.

Source: Business Insider

The trial kicked off in September. In opening statements, prosecutors argued that, “Out of time and out of money, Elizabeth Holmes decided to lie.” Meanwhile, the defense argued that although Theranos ultimately crumbled, “Failure is not a crime. Trying your hardest and coming up short is not a crime.”

Source: Business Insider

The list of possible witnesses for the trial named roughly 200 people, including the likes of Rupert Murdoch, Henry Kissinger, James Mattis, and Holmes herself.

Source: Business Insider

In the end, the trial featured testimony from just over 30 witnesses.

Source: Business Insider

Over the course of 11 weeks, prosecutors called 29 witnesses to testify — including former Theranos employees, investors, patients, and doctors — before resting their case in November.

Source: Business Insider

The defense then began making its case, calling just three witnesses, including Holmes herself.

Source: Business Insider

On the stand, Holmes said Balwani emotionally and sexually abused her during their relationship.

Source: Business Insider

Holmes testified that Balwani controlled what she ate and how her schedule looked, told her she had to “become a new Elizabeth” to succeed in business, and forced her to have sex with him when she didn’t want to because “he would say that he wanted me to know he still loved me.”

Source: Business Insider

Holmes also admitted that she added some pharmaceutical companies’ logos to Theranos’ reports without authorization. Investors previously said they took some reassurance in those reports because, based on the logos, they thought major pharmaceutical companies had validated Theranos’ technology. Holmes said she added the logos to convey that work was done in partnership with those companies, but in hindsight she wishes she had “done it differently.”

Source: Business Insider

Holmes also acknowledged on the stand that she hid Theranos’ use of modified commercial devices from investors. She said she did this because company counsel told her that alterations the company made to the machines were trade secrets and needed to be protected as such.

Source: Business Insider

Holmes spent seven days on the stand before the defense rested its case in early December.

Source: Business Insider

In closing arguments, prosecutors argued that Holmes “chose fraud over business failure” while the defense argued she was “building a business, not a criminal enterprise.”

Source: Business Insider

After 15 weeks of trial, Holmes’ case headed to a jury of eight men and four women on December 17, 2021.

Source: Business Insider

Jurors deliberated for a total of seven days over the next few weeks before telling the court on January 3, 2022, that they were deadlocked on three of the 11 charges against Holmes. The judge read off some jury instructions to the group in court before instructing them to go back and deliberate further.

Source: Business Insider

Hours later, the jury returned a mixed verdict for Holmes, finding her guilty on one count of conspiracy to defraud investors and three counts of wire fraud. They found her not guilty on four other counts and failed to reach a verdict on the remaining three counts.

Source: Business Insider

Holmes faced the possibility of decades in prison. Each count carries a maximum 20-year prison sentence, a $250,000 fine, and a requirement to pay victims restitution.

Source: Business Insider

Legal experts told Insider it was unlikely Holmes would get 20 years at sentencing, but she probably wouldn’t get off without serving any time either.

Source: Business Insider

Holmes was not taken into custody following the verdict and was to remain free until her sentencing on a $500,000 bond secured by property.

Source: Business Insider

Since the conviction, Holmes and Theranos have been the focus of a Hulu limited series, “The Dropout,” based on the ABC News podcast of the same name.

Source: Business Insider

Holmes is played by Amanda Seyfried in the dramatized series, which asks the question, “How did the world’s youngest self-made female billionaire lose it all in the blink of an eye?”

Source: Hulu

The show premiered March 3, 2022, and also stars Naveen Andrews as Balwani, Holmes’ right-hand man at Theranos.

Source: Business Insider

In May 2022, Holmes pleaded with a judge to toss her conviction.

Source: Business Insider

In a 24-page filing on May 27, Holmes’ attorneys argued for her acquittal, saying the evidence was “insufficient to sustain the convictions.”

They wrote, “Because no rational juror could have found the elements of wire fraud and conspiracy to commit wire fraud beyond a reasonable doubt on this record, the Court should grant Ms. Holmes’ motion for judgment of acquittal.”

“Even if Ms. Holmes committed wire fraud against an investor (she did not) and even if Mr. Balwani committed wire fraud against an investor, that does not prove a conspiratorial agreement between them, nor does it prove that Ms. Holmes willfully joined any agreement,” the attorneys continued in the filing.

The presiding judge tentatively denied Holmes’ request in September.

The witness was former Theranos lab director Adam Rosendorff. According to an account of the incident from Billy Evans, Holmes’ partner, Rosendorff showed up at their home looking “disheveled” and said he felt “guilty.”

“He said when he was called as a witness he tried to answer the questions honestly but that the prosecutors tried to make everybody look bad (in the company),” Evans recalled in an email to Holmes’ attorneys about their interaction. “He said that the government made things sound worse than they were when he was up on the stand during his testimony. He said he felt like he had done something wrong. And that this was weighing on him, He said he was having trouble sleeping.”

In another of Holmes’ motions for a new trial, she says the prosecution portrayed her relationship with Balwani differently in their respective trials, to her detriment.

In the final motion, Holmes said she was denied emails showing prosecutors failed to take appropriate steps to preserve a Theranos database that she claims would have helped her defense, even though the government furnished these materials when Balwani was on trial.

Holmes notched a small victory when the presiding judge ordered an evidentiary hearing regarding Rosendorff’s testimony and appearance at her home. This hearing meant that Holmes’ sentencing was postponed from October 17, 2022, to November 18 of that year.

Source: Business Insider

The evidentiary hearing proved useless to Holmes, though, as witness Rosendorff said he stood by his initial testimony and only went to her home because he was “distressed” at the idea of Holmes’ child growing up without a mother.

“At all times the government encouraged me to tell the truth and only the truth,” Rosendorff clarified at the hearing.

“I don’t want to help Ms. Holmes,” Rosendorff added. “The only person that can help her is herself. She needs to pay her debt to society.”

In the end, Holmes’ friends and family didn’t get their wish. On November 18, 2022, Holmes was sentenced to 135 months, or 11.25 years, in prison with three years of supervised release beginning on April 27. “I stand before you taking responsibility for Theranos. I loved Theranos, it was my life’s work,” Holmes said through tears at the hearing.

Source: KRON, Insider

In February 2023, a court filing revealed Holmes recently gave birth to a second child. She also asked the judge to delay the start of her prison sentence to allow her to remain free while she appeals her conviction.

“Ms. Holmes has deep ties to the community: She is the mother of two very young children; she has close relationships with family and friends, many of who submitted letters at sentencing vouching for her good character; and she volunteers with a rape crisis and counseling organization,” the filing said.

Source: Insider

But Holmes is now appealing the judge’s decision. In accordance with court rules, since she was on bail when she filed the motion, her prison reporting date has been automatically delayed.

Balwani previously used the same tactic and was able to push back his initially scheduled prison reporting date by a month — but still ultimately reported to prison on April 20.

Prosecutors have 10 days to respond to Holmes’ motion.

Source: Insider

Maya Kosoff, Paige Leskin, and Áine Cain contributed to earlier versions of this story.