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In 2018, the United States accused Elizabeth Holmes and her business partner Ramesh “Sunny” Balwani of conspiracy to commit nine electronic frauds and two electronic frauds.
The indictment accuses the duo of “conspiring, plotting and cheating to defraud investors on an important matter”.
In other words, they are accused of lying about Theranos’ business and technology to get money. Among the lies cited in the indictment are allegations Theranos made about his involvement with the military and the status of his partnership with Walgreens. Prosecutors also say Theranos falsified fake demonstrations of its technology and verification reports from pharmaceutical companies and the financial health of its business.
Wire fraud is a crime with a maximum penalty of 20 years and a potential fine. Theranos also paid a $500,000 fine in 2018 to settle civil securities fraud charges with the Securities and Exchange Commission. It also settled multiple lawsuits with investors and partners before it was dissolved that year.
Since the criminal indictment, the cases of Ms. Holmes and Mr. Balwani have been separated. Mr. Balwani will be tried next year. In addition, some of the charges against Ms. Holmes were dropped and others added. As of today, Ms. Holmes faces fraud and conspiracy 11 times to commit fraud.
He pleaded not guilty.
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