Elizabeth Holmes was once a media darling. In her signature black turtleneck, the college dropout who founded her blood-testing company Theranos at the age of 19 graced the covers of magazines such as Forbes, Fortune, and Inc. to help cultivate her image as “the next Steve Jobs.” She was hailed as a rare female founder who had raised significant amounts of money to propel her company to a staggering $9 billion valuation.
Everyone seemed enthralled by the young entrepreneur who was attempting to revolutionize blood testing and who had managed to enlist the support of a who’s who of powerful men.
Holmes’ criminal case is currently pending in a federal court in San Jose, where her relationship with the media is also being investigated.
Holmes, who has pleaded not guilty, faces a dozen counts of federal fraud and conspiracy charges, as well as a sentence of up to 20 years in prison, for allegedly defrauding doctors, patients, and investors. She and her ex-boyfriend, Ramesh “Sunny” Balwani, who served as Theranos’ chief operating officer, allegedly used the media to defraud investors as part of the alleged scheme. (Balwani is charged with the same offenses, has pleaded not guilty, and will be tried after Holmes’ case is completed.)
Lead prosecutor Robert Leach emphasized Holmes’ role in using the media and positive press coverage to propel her company and attract investors in the government’s opening statements. “The defendant became a billionaire as a result of her deception. She gained notoriety, honor, and adoration as a result of the scheme “According to Leach.
The government claims that Holmes approved a 2013 piece by a Wall Street Journal opinion writer before it was published, which gave Holmes and Theranos a glowing review but also made false claims about the company’s capabilities at the time.
After years of operating in secrecy, the article coincided with a larger unveiling of the startup, which Holmes used as external validation of the company.
“Editors make publishing decisions based on their independent judgment,” Journal spokesperson Steve Severinghaus told CNN Business.
The statement continued, “Our writer asked Elizabeth Holmes to confirm complicated facts on a technical subject, not to approve publication. Our writer visited Theranos, spoke with numerous sources in and outside the company about its technology, and had his blood tested on a Theranos machine that appeared to offer credible results. If that was all a deception, then the responsibility lies with Ms. Holmes and Theranos.”