Media love fotogenic and telegenic people like young entrepreneurs. With the rise of independent media and Cyprus’ recent technological startup scene, media on our island is increasingly vulnerable to promoting fraudulent startups. Take the high-profile case of Silicon Valley’s Theranos for example.
Elizabeth Holmes dropped out of Stanford University at the age of 19 filled a patent and formed Theranos back in 2008. Its blood testing technology claimed to provide accurate blood testing results just from a very small fingerpick blood sample as opposed to a needle. Allegedly she was inspired by a fear of needles.
In 2013 Holmes began to promote the technology to the media with great success and she made the covers of Forbes and Fortune magazines among others. This attracted a former US secretary of Defense and two former US secretaries of state including Henry Kissinger to join the board of directors of Theranos, adding to their credibility. At its peak, Theranos reached a valuation of $10bn.
However, in 2015 prompted by a series of Wall Street Journal’s articles, regulators scrutinized Theranos and discovered that Theranos was basically a scam. The blood tests it claimed it was carrying out with its proprietary Edison machines were in reality conducted elsewhere. Furthermore, the tests which were conducted by its machines had inconsistent results including two false positive HIV tests and false blood tests that resulted in a termination of pregnancy. As a result, Theranos started to withdraw its tests and recalled their machines.
Holmes stepped down from the position of CEO and her company dissolved in September 2018. She was charged with an “elaborate, years-long fraud” by the US Securities and Exchange Commission and paid a $500,000 penalty in a settlement. Part of the deal was that she was not required to admit or deny the charge.
Holmes now 37 is now facing criminal charges brought by the United States. She pleaded not guilty to charges of defrauding Theranos’s patients and investors. If found guilty she could be imprisoned for 20 years. The trial is scheduled to start on 31st of August after being delayed by the pandemic as well as her pregnancy with her partner Hotel heir Billy Evans.
On the other hand, her former business partner Ramesh “Sunny” Balwani 57, with whom she was previously romantically involved, also faces criminal charges. His trial is scheduled in February 2022.
It is possible that Holmes will take a stand in other words choose to testify and blame Balwani. The story of Theranos has been covered by HBO’s new documentary The Inventor. A movie starring Jennifer Lawrence playing Holmes has also being announced in 2016, though without any updates since.
By Stephanos Papatheodorou
