On June 15, 2018, a federal grand jury indicted Elizabeth A. Holmes and Ramesh “Sunny” Balwani with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to the indictment, Holmes, the founder of Theranos, and Balwani, the former chief operating officer, engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients. Theranos, based in Palo Alto, California, is a private healthcare and life sciences company that sought to improve medical laboratory testing by using allegedly innovative methods for drawing blood, testing blood, and interpreting patient data. Holmes and Balwani allegedly used advertisements and solicitations to encourage doctors and patients to use Theranos’s services, even though they knew Theranos could not consistently produce accurate results. Further, the indictment alleges that the defendants knew their representations about the blood analyzer were false. The defendants also allegedly defrauded investors by representing that Theranos had a profitable business relationship with the United States Department of Defense when, in reality, Theranos had limited revenue from military contracts.
United States v. Holmes, 18-cr-258 (N.D. Cal.)