$4.5 billion case: Who is Elizabeth Holmes and how did she go from being America’s richest woman to being the top scammer of the year?
It seems that the “Tinder swindler” and Anna Delvey have a serious competitor. For a couple of weeks now, the Internet has been discussing the case of Elizabeth Holmes, who in November of this year was sentenced to 135 months in prison and $ 121 million in damages. The trial of the fraudster began four years ago, when charges were brought against her and her colleagues for defrauding investors and clients, but the proceedings were postponed – “thank you” COVID-19. And later it was again postponed from July 2021 to August of the same year – this time due to the pregnancy of the defendant, which she kept a secret. As a result, the start of the case was given only a year ago, and the term of Elizabeth Holmes will begin on April 27, 2023. Who is she, how did she become the richest woman in America and then lose everything and get sentenced?
Elizabeth Holmes was born in Washington, D.C., the son of a congressional committee employee and vice president of the energy company Enron. When she was nine years old, the family moved to Houston, then lived in China, and in 2002 she entered Stanford University in chemistry (later Elizabeth Holmes said that since childhood she dreamed of treating people, but could not stand the sight of blood and needles ). However, the future fraudster never received a diploma – a year later she dropped out of school and, without the permission of her parents, used the money they had saved up for education as the starting capital of the Theranos company she founded (from the words “therapy” and “diagnosis”).
Elizabeth Holmes was only 19 when Theranos was founded, but her young age hasn’t stopped her from raising over $700 million in venture capital and private equity. How? She just announced a breakthrough in the field of blood testing – unlike standard samples, her technology allegedly allowed using only a few drops of a patient’s blood. As a result, in 2013 and 2014 Theranos was already valued at $ 10 billion at the peak of its market value, and the media wrote about the “revolution in medicine.”
The company’s problems, however, began almost simultaneously with its success: for example, in 2013, for example, the company’s senior biochemist committed suicide after eight years of work, telling his wife that Theranos had failed, and in 2015 the technology was subjected to doubt in the press. The Washington Post wrote that back in 2012, the Department of Defense identified problems in the analyzes, but General James Mattis intervened at the request of Elizabeth Holmes. A year later, he will become a member of its board of directors, and the proceedings will not be given a course. Elizabeth Holmes herself, meanwhile, lived her best life: in 2015, Forbes recognized her as the richest woman in America with a fortune of $ 4.5 billion.
True, the real collapse of Theranos was not far off, and in the same 2015, medical research professors John Ioannidis and Eleftherios Diamandis and reporter John Carreira from The Wall Street Journal questioned the authenticity of Theranos technology. Elizabeth Holmes and her corporation were called to account by medical institutions, investors, the US Securities and Exchange Commission, lawyers, partners, patients – the list was long, and Entrepreneur magazine ranked the main hero of the occasion as the first in the ranking of the worst entrepreneurs. She admitted that after ten years of development, her inventions did not work, and research flaws should have been addressed earlier.
A year later, the capital of Elizabeth Holmes fell from 4.5 billion to almost zero – she was on the verge of bankruptcy, and the US Attorney’s Office launched an investigation into Theranos. A loan of 100 million from Fortress Investment Group in 2017 almost saved the company from complete ruin, but in vain – in the fall of the following year it ceased to exist.
Then, in 2018, Elizabeth Holmes and former Theranos president Ramesh Balwani were accused of “massive fraud” – the US Securities and Exchange Commission charged them with extorting funds in the amount of $ 700 million from investors under the pretext of having allegedly revolutionary blood testing technology. The once richest woman in America responded by agreeing to pay a $500,000 fine, return her remaining 18.9 million shares, and forfeit her right to hold management positions in any public companies for ten years. However, neither she nor Theranos admitted or denied the allegations.
Now Elizabeth Holmes does not give interviews, and her lawyer David Boys, who, however, is also laconic, is talking to the press instead.