Former Theranos founder Elizabeth Holmes: a serial liar and criminal? The prosecution team seeking to punish her says so
Prosecutors in California are seeking to hold Elizabeth Holmes of Theranos criminally responsible for thousands of “substantial” losses after the company’s credibility crashed, according to court documents that accuse her of lying to investors and doctors, describing Theranos as a “miscarriage of justice” and pushing Holmes to take responsibility for it.
The document filed on Friday, the 23rd anniversary of Theranos’ founding, references everything from Theranos’ misrepresentations to the potential use of its blood-testing technology and the company’s “discredited” board of directors as elements of what the case’s authors say constitute a “big Ponzi scheme”.
The San Jose office of the US attorney, Andre Birotte Jr, is seeking to hold Holmes criminally responsible in the civil and criminal cases with subpoenas urging her to testify on Monday.
Theranos plans to seek an expedited hearing on Tuesday over the subpoena to compel her to appear, according to court documents.
Holmes has never been charged with wrongdoing, but she was close to going to trial before presiding judge Samuel Goldsmith was replaced last year by Judge William Alsup. She has repeatedly declined to appear in the case.
The Theranos collapse was the most spectacular and enduring failure for a Silicon Valley startup in the last decade, but Theranos continues to fight a lawsuit from the US Food and Drug Administration, which accuses the company of breaking the law with its technology.
Holmes, who has kept a low profile since the company’s collapse in 2016, said she could not attend the criminal investigation in 2012, according to court documents. She has agreed to give deposition testimony on Monday, according to a spokeswoman for the US attorney’s office.
“This case proves that no one is above the law, especially when they profit by deceiving consumers and defrauding their investors,” said Assistant US Attorney John Cruden in a statement.
Earlier this year, Holmes was found not guilty of 14 federal counts of securities fraud and wire fraud related to the course of the company.
In April, the US judge rejected a request by Holmes to dismiss claims by the US attorney’s office in San Francisco that the US Securities and Exchange Commission defrauded investors and lured them into the deal by “disguised” the risks of investing.
Holmes, who raised nearly $2bn from prominent venture capitalists, was said to be a “brazen liar” during her high-profile fraud trial last year.
Following an indictment in 2016 and the scrutiny of the federal investigation, Theranos sold its main lab business. In January, it launched the AtmosDNA app which test the blood for up to 16 diseases, including HIV and hepatitis B, as part of its 10-year plan to launch more tests using its technology.