Beauty and the Beast | What happened to Elizabeth Holmes and Balwani?

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Elizabeth Holmes, the founder and CEO of Theranos, appeared on the front covers of prestigious business journals in 2014 for becoming the world’s youngest self-made millionaire.

Elizabeth Holmes is back in the news in 2022, but this time for all the wrong reasons. The Dropout, a new Hulu series, has sparked renewed interest in Holmes, her connection with former COO Sunny Balwani, and her current situation.

Here’s the backstory on Holmes’ story, as well as what she and Balwani are up to now and what the future may bring.

Holmes’ affair and her fall from grace

Holmes aspired to be a billionaire since she was a child. She dropped out of Stanford at the age of 19 to focus on her “revolutionary” blood-testing company, Theranos. With Theranos, Holmes promised to eliminate needles from blood testing, claiming that her “unique” gadget, the “Edison,” could provide cheaper and faster findings for over 240 ailments with a single pin-prick and a drop of blood.

Holmes was the daughter of a former Enron VP and legislative staffer, as well as a descendant of the family who created America’s first yeast firm. Her illustrious past helped connect Theranos to some of the country’s most powerful figures.

She obtained contracts with industry heavyweights like Pfizer and Safeway, and invited celebrities like former Secretary of State Henry Kissinger and ex-Director of the CDC William Foege to her board of directors. She even persuaded high-profile investors such as Larry Ellison, the creator of Oracle, and Walgreens, the largest pharmacy chain in the United States, to invest in her firm, raising over $700 million without ever divulging how her technology worked.

This secrecy reflected the company’s work ethic, as well as Elizabeth’s own, who hired bodyguards to drive her around, erected bulletproof glass in her office windows, and prohibited employees from discussing projects with colleagues in other departments. Holmes relished the limelight, giving TED Talks and participating in panels with Bill Clinton and Jack Ma. Theranos had testing centers in 40 Walgreens stores by 2014, and was worth $9 billion. 

During this time, however, doubters began to cast doubt on Holmes’ assertions.

Theranos is on the decline

Tyler Schultz, a former employee of Theranos, accused Holmes of ignoring failed quality control checks during the testing process in 2014. Tyler contacted the Public Health Laboratory in New York despite receiving threats from Holmes, stating that Theranos was doctoring studies and manipulating proficiency tests.

The FDA began an investigation into Theranos in 2015 after discovering “significant errors” in the tests that company was performing on patients. A Theranos STD test, for example, claimed to be accurate 95% of the time. However, authorities discovered that the results were only accurate 65 percent to 80 percent of the time.

When WSJ reporter John Carreyrou published a series of pieces exposing Holmes’ lies and faulty blood test results, the public became aware of her wrongdoings. Soon after, Walgreens sued Theranos for $140 million, alleging that the company misled them about the technology’s capabilities. The Securities and Exchange Commission (SEC) charged Holmes and her ex-boyfriend, Theranos COO Sunny Balwani, with 11 felony counts of fraud against investors and patients in 2016. By 2019, Theranos will be utterly defunct.

Holmes’ Affair made public

In September 2021, Holmes’ trial began, as prosecutors and witnesses revealed her as a fraud. Here are some of the trial’s most surprising revelations:

1-In order to attract investors, Holmes claimed that Theranos’ results had been validated by the world’s ten major pharmaceutical companies. They hadn’t done so.

2-Holmes allegedly fabricated Pfizer’s logo and letterhead on lab findings she presented to investors in order to deceive them into believing she had Pfizer contracts.

3-Theranos concealed its flaws by replacing Edison’s reports with findings from routine blood draws performed on traditional equipment; in fact, the majority of tests were performed on standard machines.

4-Whistleblowers testified that Holmes fired engineers who said the Edison wasn’t working.

5-Former Theranos patients testified against the health-tech business, alleging that it provided erroneous test results. Brittany Gould was one of these patients, who was told she was having a miscarriage when she actually had a healthy pregnancy. She changed her medicine as a result of the false positive, which might have endangered the fetus.

Sunny Balwani and Elizabeth Holmes’ defense

Elizabeth Holmes’ main defense was that she was only trying to help the company prosper and that her actions were in the spirit of development. “It’s not a crime to come up short,” she explained.

She also blamed her ex-partner Sunny Balwani for the majority of the wrongdoings, alleging that he abused and controlled her throughout their relationship, making it difficult for her to make decisions.

Holmes’ lawyer showed a handwritten letter outlining her daily routine and affirmations, which Balwani allegedly dictated, as well as how she should act and speak, according to Holmes.

“I don’t say much. When I do, I keep it CRISP and CONCISE. I quickly dismiss it as nonsense. The last few words of the note read, “My hands are always in my pockets or pointing.”

Balwani and his lawyers have refuted the allegations, calling them “salacious and offensive,” and insisting that Holmes, not Balwani, was the company’s final decision-maker.

However, a series of text exchanges between Balwani and Holmes have lately surfaced, implying that Balwani wielded more power than he admits.

According to NBC, Balwani texted Holmes, “I am responsible for everything at Theranos.”

Is Elizabeth Holmes going to jail?

Following a lengthy trial that included over 30 witnesses, the court convicted Holmes guilty of four charges of criminal fraud against investors, each of which carries a sentence of 20 years in prison and a $250,000 fine. Holmes was found not guilty of patient fraud by a jury.

Because Holmes was convicted of a non-violent, white-collar felony, legal experts believe he will only serve three years in prison, and that in a high-security facility with plenty of amenities like pilates classes, tennis courts, and arts programs. Her new baby boy with husband Billy Evans could help her get a lighter sentence.

According to Amanda Kramer, a white-collar defense lawyer, Holmes’ case serves as a deterrent to business owners who may be planning to conduct fraud. It would be “utterly horrifying” if Holmes escaped prison, she said.

Along with the charges of abuse, Balwani is facing a second trial for fraud. Balwani’s case has an impact on Holmes’ punishment, according to Kramer, which is why the court has set her sentencing date for September 2022.

What is Elizabeth Holmes’ current location?

Elizabeth Holmes, who was once dubbed “the next Steve Jobs” and had a net worth of $4.5 billion, has fallen from grace (and money) and is now worth $0, according to Forbes. Holmes, who is currently free on a $500,000 bail bond, is enjoying life with her husband and son in their $135 million Green Gables house in Silicon Valley.

Sunny Balwani, where are you today?

Sunny became wealthy after starting his e-commerce business CommerceBid at the peak of the dot-com bubble in the late 1990s, after working for companies such as Microsoft and Lotus.

After the bubble burst, he continued his education and, at the age of 37, went to China as part of a summer program, where he met Elizabeth, then 18 years old. In 2005, after dating for three years, Sunny handed Holmes a $13 million personal loan to help fund Theranos.

Sunny became president and COO of Theranos in 2009, reigning over the company’s C-suite alongside Holmes until the couple broke in 2016 and he left. Sunny has been charged with the same counts as Holmes as a key decision-maker at Theranos and is facing a separate trial that began in March 2022.

According to reports, he recently sold the luxury home he and Holmes co-owned (which was later bought out by Balwani) for about $16 million to help fund his ongoing legal battle.

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