In 2014, Theranos’ founder, Elizabeth Holmes, was listed among the Forbes list of USA’s richest self-made women. With a net worth of $4.5 billion, she and her organization became a new sensation. However, her empire came crashing down when a federal jury indicted Holmes and her ex-boyfriend, Sunny Balwani, for committing financial fraud. After Holmes stepped down as the CEO of Theranos, she went to trial. Subsequently, the court found her guilty and sentenced her to 11 years in prison. Meanwhile, Balwani received approximately 13 years in prison on wire fraud charges.
According to CNN, several reports suggested that Theranos used the normal technique for taking a blood test with traditional vials and not a few drops taken by a finger prick. Meanwhile, in January 2016, the Centers for Medicare and Medicaid Services (CMS) criticized the organization after its lab in California failed to meet federal standards. In its letter to the company, the federal agency gave them 10 days to address the issue.
Two months later, the CMS noted that it would ban Elizabeth Holmes and Sunny Balwani if they couldn’t fix the issues in their lab. Then, in May 2016, Balwani allegedly took retirement and left the company.
The problems kept on mounting for Elizabeth Holmes and Sunny Balwani as the US Security and Exchange Commission charged the duo with fraud. Per CNN, the duo extracted over $700 million from the investors by making false claims. Additionally, the publication stated that Holmes and Balwani exaggerated the company’s performance. In June 2018, a federal jury indicted them for engaging in separate schemes to defraud investors, doctors, and patients.
How were Elizabeth Holmes & Sunny Balwani caught?
As mentioned earlier, Elizabeth Holmes and Sunny Balwani were indicated after the SEC charged them with massive fraud. The Wall Street Journal reported that the court initially indicted them on two counts of conspiracy to commit wire fraud and nine counts of wire fraud. However, the wire fraud charges later rose to 10. After a lot of delays, the trial of Holmes began in August 2021 and continued for more than five months. Eventually, in January 2022, the jury found her guilty of four charges and sentenced to 11 years in prison.
On the other hand, Sunny Balwani’s trial started in March 2022 and continued for over three months. The trial concluded in July 2022 after the jury delivered a guilty verdict. According to the Department of Justice, the court sentenced him to 12 years and 11 months in prison. In April 2023, KTVU reported that Balwani was serving his sentence at FCI Terminal Island in San Pedro, California. Meanwhile, Holmes is currently residing at a Women’s Federal Prison in Texas, per The Guardian.
