Theranos fraud (Elizabeth Holmes)

Elizabeth Holmes founded Theranos in 2003, promising that a few drops of blood from a finger prick could run a full range of laboratory tests on the company's own compact analyser, called the Edison or minilab. Ramesh "Sunny" Balwani joined in 2009 and became president and chief operating officer. In 2013 Theranos launched its testing in Walgreens pharmacies. Investors put hundreds of millions of dollars into the company, and by 2014 Holmes's stake was valued at more than $4 billion.

In October 2015 the Wall Street Journal reported that the Edison handled only a small fraction of the tests Theranos sold, and that most were run on conventional machines bought from other companies. A federal inspection of the company's California lab followed. In July 2016 regulators revoked the lab's certificate and moved to bar Holmes and Balwani from running a lab for two years.

In March 2018 the Securities and Exchange Commission charged Theranos, Holmes and Balwani with defrauding investors of more than $700 million. Holmes settled without admitting wrongdoing. In June 2018 a federal grand jury indicted both on wire fraud charges involving investors and patients, and the charges were revised in 2020. Their trials were separated. Holmes was tried first, beginning in August 2021. On 3 January 2022 she was convicted of defrauding investors and acquitted of defrauding patients. Balwani's trial began in March 2022, and on 7 July 2022 he was convicted on every count.

Holmes was sentenced to 11 years and 3 months and Balwani to 12 years and 11 months. Both entered federal prison in 2023, and the court ordered them to repay $452 million. In February 2025 the federal appeals court upheld their convictions, sentences and the restitution order.