Theranos founder Elizabeth Holmes charged with $700m fraud

[Homer J Simpson]

Fancy new blood analyzer ready to go......not so fast.

"In truth, according to the SEC's complaint, Theranos' proprietary analyser could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analysers manufactured by others."




http://www.bbc.com/news/business-43406050








"the secret lab"

[CNe7532294]

This is a case of "I have a good idea but I don't know how execute it properly other than business skills." Running a general business is easy. Electronics Engineering is somewhat easy (you can always revise a mistake). Medical is a NO NO NO. You need the Ph.Ds and M.D.s along with J.D.s. This industry is heavily regulated because we are essential messing with peoples lives for better or worse. I know I had worked in the industry and I have exactly done this type of job. By that I mean I personally have accessioned stickers to tubes, pipetted (those steady hands come in handy) and later carried out the chemical reactions needed to stabilize, lyse, and analyze proteins and DNA that and general toxicology here in the TMC along with working with the robotics of automated liquid handling systems. There are so many things that can go wrong and so many rules to follow. You can not make one mistake. There is no room for error. Its like the space program. "Failure is not an option". Even if you are 110% an outside force can destroy your company. A personal example of mine is when an insurance/billing company had a breach in their system. This is a HIPPA violation tallying into the millions (per person). They were fined in the millions and went bankrupt. This affected a lab that I worked at because they had a good percentage of samples coming in tied to this insurance company via paperwork. I remember having to simply throw all those samples in the bio-hazard bin just because we couldn't bill those samples. Worse yet is running those samples only to find out after the fact.  Don't get me wrong though. This is a good idea and I've met more than my fair share of phlebotomist (junior nurses, certified lab techs, etc.) whom shake like a leaf at retrieving a blood sample. Worse is someone who can't properly insert a needle to an older person. Then proceeds to stab them like no tomorrow. 

[EEVblog]

 

https://californiahealthline.org/news/reporters-notebook-the-tale-of-theranos-and-the-mysterious-fire-alarm/

[chickenHeadKnob]

Pulling the fire alarm is a classic trick that a desperate student does just before exams, to gain more time. It never works. The University I went to had seen this stunt so many times they got the the routine down to 10 minutes. Shuffle the students out, check for smoke, back in you go.

[Bassman59]

So what does Theranos have in common with Uber’s self-driving car division?

Arizona.

Specifically, Arizona’s idiot governor Doug Ducey welcomed both companies to the state by saying, “we won’t regulate you, do what you want!”

Remember, prior to entering politics, Ducey was the guy who ran an ice cream store chain (Cold Stone Creamery) into the ground. Yep, he went bust selling ice cream in Arizona.

[sokoloff]

Yep, he went bust selling ice cream in Arizona.

[edy]

             

Who didn't see this coming? Was everyone blinded by corporate greed? Investors using their own money or other people's money, promising them huge returns? And how did nobody who was handing their money over to them not ask for independent verification, proof, or anything else otherwise to substantiate the revolutionary claims?

That linked BBC articles says it all:

Ms Holmes will lose control of the firm and be fined $500,000.
Theranos was founded in 2003 when Ms Holmes was only 19, and sought to develop an innovative blood testing device.
In 2015 Forbes magazine estimated Ms Holmes' wealth at $4.5bn
Theranos will shut labs and cut 40% staff
By 2016 Forbes had revised its estimates of Ms Holmes' fortune to "nothing".

I can't believe it has been 15 years! Can that be true?

A search for Ms Holmes reveals this:

Elizabeth Anne Holmes is the founder, Chairman, and CEO of Theranos, a privately held company known for its false claims to have devised revolutionary blood tests that used very small amounts of blood. Wikipedia
Born: February 3, 1984 (age 34), Washington, D.C., United States
Net worth: US$0
Residence: Palo Alto, California, US
Parents: Christian Holmes IV, Noel Holmes
Education: St. John's School (2002), Stanford University
Siblings: Christian Holmes V

And finally, latest from Wikipedia entry:

In March 2018, the U.S. Securities and Exchange Commission sued Holmes and Theranos, accusing them of fraudulently raising more than $700 million from investors through false or exaggerated claims. In exchange for settling the charges, Holmes agreed to pay a $500,000 fine, return 18.9 million shares, relinquish her voting control of Theranos, and be barred from serving as an officer or director of a public company for ten years.[10][11]

You think Holmes stashed a few million bucks away somewhere in the Caribbean, and after paying off her $500,000 "fine" will go live on the island?

Me also thinks that while she was complacent in this entire scheme, her business buddy Ramesh "Sunny" Balwani may have enabled her behaviour and the two of them reinforced this out of control trainwreck and got caught up in the greed and cover-up and figured that as long as they were still using conventional equipment, their "invention" would eventually materialise and vindicate them. But then the SEC caught up with them, and their invention still not a reality, the investors feeling duped thinking they were sitting on some potential goldmine that would make Theranos shares skyrocket. 

[BravoV]

All the investors deserved it, its all about exploiting the greed system anyway, and I guess somehow this will turned into an almost ideal example, and a case study for further "enhancement" for future scammers like her. 

[EEVblog]

You think Holmes stashed a few million bucks away somewhere in the Caribbean, and after paying off her $500,000 "fine" will go live on the island?

If she wasn't drawing a big wage as CEO for many years then she's as dumb as the people who invested in this.

Me also thinks that while she was complacent in this entire scheme, her business buddy Ramesh "Sunny" Balwani may have enabled her behaviour and the two of them reinforced this out of control trainwreck and got caught up in the greed and cover-up and figured that as long as they were still using conventional equipment, their "invention" would eventually materialise and vindicate them. But then the SEC caught up with them, and their invention still not a reality, the investors feeling duped thinking they were sitting on some potential goldmine that would make Theranos shares skyrocket. 

She can't be the only one complicit in this.

[Bassman59]

All the investors deserved it, its all about exploiting the greed system anyway, and I guess somehow this will turned into an almost ideal example, and a case study for further "enhancement" for future scammers like her. 

The people who invest in the early funding rounds are supposed to be the most sophisticated investors.

But as has been shown again and again, wealth doesn’t imply intelligence.

I don’t feel sorry for them at all.

[chickenHeadKnob]

You think Holmes stashed a few million bucks away somewhere in the Caribbean, and after paying off her $500,000 "fine" will go live on the island?

The first part of designing any scam is to make your exit plan. People may vaguely remember a junior Canadian mining start-up called BRE-X. They supposedly discovered the mother lode of all gold deposits in central Borneo. They went from a penny stock to 6 billion market cap. Then test core samples were sent out to independent analysts and before the reports became public the chief project manager mysteriously fell out of a helicopter. From Wikipedia:
 
 "The fraud began to unravel rapidly on March 19, 1997, when Filipino Bre-X geologist Michael de Guzman reportedly committed suicide by jumping from a helicopter in Busang, Indonesia.[9][10] A body was found four days later in the jungle, missing the hands and feet, and with the penis "surgically removed".[11] In addition, the body was reportedly mostly eaten by animals and was only identified from molars and a thumbprint.[12] (According to journalist John McBeth, a body had gone missing from the morgue of the town from which the helicopter flew. The remains of "de Guzman" were found only 400 metres from a logging road. No one saw the body except another Filipino geologist who claimed it was de Guzman. And one of the five women who considered themselves his wife was receiving monetary payments from somebody long after the supposed death of de Guzman."

The real de Guzman was later reported to have been seen in Brazil.

The analysts who looked at the samples quickly determined they were placer gold, ie. gold that came from a stream bed via panning. There was no way it should be part of a core sample, implying the obvious, the cores were salted. Boom; the scam was over.

Both Brian Walsh (president) and John Felderhof(chief geologist) did the me know nothinks act. Claiming It was all de Guzman. Oh,  and doing it from their respective Caribbean island homes!

Brian Walsh  also had a home invasion at his Nassau island house where he was tied up at gunpoint by two masked men demanding he reveal his hidden stash.

The whole soap opera, with twists and turns I haven't mentioned, is now a movie starring Mathew McConaughey.

[TheDane]

https://www.urbandictionary.com/define.php?term=Don%27t%20hate%20the%20player%20hate%20the%20game

Another way of saying don't blame me; this is how the system works.
Don't hate the player hate the game ... Or society made me do it, or the system is flawed and I've figured out how to work it, or everyone else is cheating too, or I hope I don't go to prison.
    


- some will do anything for money.
https://www.zerohedge.com/news/2016-08-30/darwin-awards-nations

[BrianHG]

Theranos CEO Elizabeth Holmes Charged with Criminal Fraud

[CopperCone]

does her name make anyone else laugh/.

[BrianHG]

does her name make anyone else laugh/.

Not quite, but her eyes freak me out.  Sorta like a freaky partial 50% the way to a Japanese drawn animated character with huge wide open round eyes.

[Dubbie]

does her name make anyone else laugh/.

Not quite, but her eyes freak me out.  Sorta like a freaky partial 50% the way to a Japanese drawn animated character with huge wide open round eyes.

Real classy guys...
Why don't you post a pic of yourself so we can all have a good laugh at your facial features.

[MT]

The dude journalist who exposed Theranos crimes! She really got all those greedy investor/board old phsyco men by their balls, or whats left of them, even the shitheads Kissinger and Mattis!

[Marco]

Why don't you post a pic of yourself so we can all have a good laugh at your facial features.

Classy insults can be reserved for classy people, 1.4 Billion dollar fraudsters not so much.

[Marco]

Why the quotation marks? 1.4 Billion was the total amount of money invested. It was well known at the time her methods were considered impossible, she almost certainly didn't and doesn't have the technology to make that consideration wrong, it's a fact she has not shown it, it's also a fact she claimed to have it.

[T3sl4co1l]

For the technical minded, a reading of the actual indictment:

[sokoloff]

Why the quotation marks? 1.4 Billion was the total amount of money invested. It was well known at the time her methods were considered impossible, she almost certainly didn't and doesn't have the technology to make that consideration wrong, it's a fact she has not shown it, it's also a fact she claimed to have it.

Careful. Lots of things once considered impossible are now a reality. The mere common knowledge nor expert opinion that something is so doesn't necessarily make it so.

"heavier-than-air flying machines are impossible"

Of rockets being able to travel into space: "Professor [Robert] Goddard does not know the relationship between action and reaction," wrote the [New York] Times. "He seems to lack the basic knowledge ladled out daily in high schools."

"I think there is a world market for maybe five computers." --Thomas Watson, president of IBM, 1943

"There is no reason anyone would want a computer in their home." --Ken Olsen, founder of Digital Equipment Corporation, 1977

"Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." --Robert Metcalfe, founder of 3Com and credited inventor of Ethernet, 1995

More: https://www.newscientist.com/article/dn13556-10-impossibilities-conquered-by-science/

[Marco]

That's where evidence comes in. Induction is impossible, but you will always have to compromise a little in the real world. I feel safe to state that it's a fact that the sun will come up tomorrow and that Elizabeth Holmes is a fraud.

[GeorgeOfTheJungle]

Next in the queue: Meredith Perry.

[kaz911]

Funny how none of the board members are on trial. They had some heavyweights in there:

Elizabeth Holmes, founder and CEO
Riley Bechtel, former Bechtel Group CEO
David Boies, a founder and the chairman of Boies Schiller & Flexner
William Foege, former director CDC
Richard Kovacevich, former Wells Fargo CEO and chairman
James Mattis, later US Secretary of Defense
Fabrizio Bonanni, former executive vice president of Amgen

She was 19 - and all the above have not done anything wrong?

I think the picture is more nuanced than what the press is showing. But it comes from the Silicon Valley illness. "Ohh you need more money - we can't invest less than XXX million - so please beef up your proposal"

I'm not saying the founder is innocent - but I do think she is not the only or biggest culprit. Greed was (And Silicon Valley mentality)
 

[tszaboo]

Ok, so last time I went to the doctor to make a blood test for common stuff, I payed something like 15 EUR, I do this yearly. That is 17 dollars, the same as each test cost on that list. My GP took the blood and called me a few days later, and told me I'm fine. This was 100% payed by me, not a single cent from the healtcare funds.
The issue is not that "people cannot afford medication" the issue is built into your system. And the sooner you realize this, the sooner you can change something about it.