Over the past few years, the perception of the “billionaire” in American culture has shifted in several directions. Billionaires are, in many ways, lauded for their perceived ambition and success, yet they are also seen by some sectors of the American public as corrupt. Many billionaires maintain that they have a clean legal record in order to stabilize their public image; former billionaire Elizabeth Holmes has done the opposite.
Holmes, 37, started a healthcare company called Theranos after dropping out of Stanford University at the age of 19 by using seed money from her tuition. The company was named from a combination of the words “therapy” and “diagnose.” Holmes intended to “revolutionize healthcare” and set out to create a system of blood testing based on her fear of needles. Theranos operated undercover for many years until Holmes launched the company publicly in 2013. According to Sarah Randazzo of the Wall Street Journal, Holmes described the technology as capable of testing various health conditions with a few drops of blood from a finger prick, “…eliminating the need for large needles and vials of blood.”
In Theranos’s decade of undercover operation, Holmes collected funds from various investors; many of these investors were in touch with her due to connections from Holmes’s parents. Her mother Noel worked as a congressional committee staffer while her father Christian worked for multiple government agencies, such as the United States Agency for International Development. These connections allowed Holmes to build the company’s wealth both before and after going public with Theranos.
Over the next few years following, people became taken with Holmes’s professional appearance and low voice, inspired by the professionalism of Apple CEO Steve Jobs; however, the inspiration from Steve Jobs did not end with her physical public demeanor. She additionally made money from investors based on the idea that secrecy was Theranos’s top priority, feigning a private approach similar to that of Steve Jobs. This relieved Holmes from discussing any revealing information about how the technology used by Theranos worked, according to Business Insider. Investors believed Holmes’s approach to be a reliable one. She made money off prominent figures such as Oracle founder Larry Ellison, and Draper Fisher Jurvetson founder Tim Draper, the father of one of Holmes’s childhood friends.
Having both taken advantage of her connections and captivating the general public with her persona, Holmes became wildly successful, eventually being cited by Forbes as the world’s youngest self-made female billionaire in 2015. However, Holmes’s and Theranos’s combined success faltered rapidly not too long after; investors grew suspicious of the secrecy and apparent lack of scientific research to back their technology. Promises from Holmes and then-company President Sunny Balwani were not yielding reliable results. Knowledge that Theranos’s technology was not capable of accurately testing people’s blood for calcium, chloride, sodium, bicarbonate, potassium and HIV, among other things, was withheld by the founders. This was their primary fraudulent act.
The fraudulent acts committed by Holmes and Balwani soon became more apparent to investors, scientific experts and the general public. They used interstate electronic wires to buy advertisements for people to buy Theranos’s blood tests at Walgreens pharmacies in California and Arizona, and even solicited doctors and patients to use these blood tests, despite their knowledge of the technology’s faults. The pair have been accused of defrauding investors by direct communications, marketing materials, media statements and financial statements that claimed that Theranos used a revolutionary analyzer to perform a full range of clinical tasks. This information regarding the analyzer was also proven to be misleading. By 2018, all of these acts resulted in nine charges of wire fraud and two charges of conspiracy to commit wire fraud that will land Holmes and Balwani in prison for 20 years if they are convicted.
This trial is a long-awaited one, as Holmes’s carefully crafted public persona and once-held billionaire status has solidified her place as an infamous scammer in modern American history. The process has been delayed multiple times as a result of both the COVID-19 pandemic and Holmes’s pregnancy. The case of U.S. v. Elizabeth Holmes, et al. stipulates the trial information as we know it. Holmes’s trial began with its jury selection on Aug. 31, and Balwani’s will take place in January of 2022, with COVID-19 precautions in place for both trials.