Elizabeth Holmes
Elizabeth Anne Holmes (born February 3, 1984) is an American biotechnology entrepreneur who was convicted of fraud in connection to her blood-testing company, Theranos.[2] The company's valuation soared after it claimed to have revolutionized blood testing by developing methods that needed only very small volumes of blood, such as from a fingerprick.[3][4] In 2015, Forbes had named Holmes the youngest and wealthiest self-made female billionaire in the United States on the basis of a $9-billion valuation of her company.[5] In the following year, as revelations of fraud about Theranos's claims began to surface, Forbes revised its estimate of Holmes's net worth to zero,[6] and Fortune named her in its feature article on "The World's 19 Most Disappointing Leaders".[7]
For the writer, see Elizabeth Holmes (writer).
Elizabeth Holmes
St. John's School
Stanford University (dropped out)
2003–2018
- Founder and CEO of Theranos
- Criminal fraud
Incarcerated
2
- Charles Louis Fleischmann (third great-grandfather)
- Julius Fleischmann (great-great-great uncle)
- Christian R. Holmes II (great-grandfather)
- Wire fraud (3 counts)
- Conspiracy to commit wire fraud (1 count)
11+1⁄4 years (135 months) in prison[1]
The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company's claims and whether Holmes had misled investors and the government. In 2018, the U.S. Securities and Exchange Commission (SEC) charged Theranos, Holmes, and former Theranos chief operating officer (COO) Ramesh "Sunny" Balwani with raising $700 million from investors through a "massive fraud" involving false or exaggerated claims about the accuracy of the company's blood-testing technology; Holmes settled the charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and accepting a ten-year ban from serving as an officer or director of a public company.
In June 2018, a federal grand jury indicted Holmes and Balwani on fraud charges. Her trial in the case of U.S. v. Holmes, et al. ended in January 2022 when Holmes was convicted of defrauding investors, and acquitted of defrauding patients.[8] She was sentenced to serve 11+1⁄4 years in prison, beginning on May 30, 2023. She and Balwani were fined $452 million to be paid to the victims of the fraud. The credibility of Theranos was attributed in part to Holmes's personal connections and ability to recruit the support of influential people, including Henry Kissinger, George Shultz, James Mattis, and Betsy DeVos, all of whom had served or would go on to serve as U.S. presidential cabinet officials.
Holmes was in a clandestine romantic relationship with Balwani during most of Theranos's history. Following the collapse of Theranos, she started dating hotel heir Billy Evans, with whom she has two children. Theranos and Holmes's career are the subject of a book, Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018), by The Wall Street Journal reporter John Carreyrou; an HBO documentary film, The Inventor: Out for Blood in Silicon Valley (2019); a true crime podcast, The Dropout; and a Hulu miniseries based on the podcast, The Dropout (2022). Holmes is incarcerated at Federal Prison Camp, Bryan.
Early life
Elizabeth Holmes was born on February 3, 1984, in Washington, D.C.[9] Her father, Christian Rasmus Holmes IV, was a vice president at Enron, an energy company that later went bankrupt after an accounting fraud scandal. Her mother, Noel Anne (née Daoust), worked as a Congressional committee staffer.[10][9] Christian later held executive positions in government agencies such as USAID, the EPA, and USTDA.[11][12] Elizabeth Holmes is partly of Danish ancestry. One of her paternal great-great-great-grandfathers was Charles Louis Fleischmann, a Hungarian immigrant who founded Fleischmann's Yeast Company.[13] The Holmes family "was very proud of its yeast empire" history, according to a family friend Joseph Fuisz, "I think the parents very much yearned for the days of yore when the family was one of the richest in America. And I think Elizabeth channeled that, and at a young age."[14]
Holmes graduated from high school at St. John's School in Houston.[15][16] During high school, she was interested in computer programming and says she started her first business selling C++ compilers to Chinese universities.[17] Her parents had arranged Mandarin Chinese home tutoring, and partway through high school, Holmes began attending Stanford University's summer Mandarin program.[18][9] In 2002, Holmes attended Stanford, where she studied chemical engineering and worked as a student researcher and laboratory assistant in the School of Engineering.[10] She was a member of Kappa Alpha Theta at Stanford.[19]
After the end of her freshman year, Holmes worked in a laboratory at the Genome Institute of Singapore and tested for severe acute respiratory syndrome coronavirus (SARS-CoV-1) through the collection of blood samples with syringes.[17][20] She filed her first patent application on a wearable drug-delivery patch in 2003.[21][22] Holmes reported that she was raped at Stanford in 2003.[23] In March 2004, she dropped out of Stanford's School of Engineering and used her tuition money as seed funding for a consumer healthcare technology company.[10][24]
Promotional activities
Holmes partnered with Carlos Slim in June 2015 to improve blood testing in Mexico.[100] In October 2015, she announced #IronSisters to help women in science, technology, engineering, and mathematics careers.[101] In 2015, she helped to draft and pass a law in Arizona to let people obtain and pay for lab tests without requiring insurance or healthcare provider approval, while misrepresenting the accuracy and effectiveness of the Theranos device.[102][103]
Connections
Theranos's board and investors included many influential figures.[104][105] Holmes's first major investor was Tim Draper – Silicon Valley venture capitalist and father of Holmes's childhood friend Jesse Draper – who "cut Holmes a check" for $1 million upon hearing her initial pitch for the firm that would become Theranos.[106][107] Theranos's pool of major investors expanded to include[105] Rupert Murdoch, the Walton family, the DeVos family including Betsy DeVos, the Cox family of Cox Enterprises and Carlos Slim Helú. Each of these investors lost tens to hundreds of millions of dollars when Theranos folded.[105]
One of Holmes's first board members was George Shultz.[108][106] With Shultz's early involvement aiding Holmes's recruitment efforts, the 12-member Theranos board eventually included:[109] Henry Kissinger, a former secretary of state; William Perry, a former secretary of defense; James Mattis, a future secretary of defense; Gary Roughead, a retired U.S. Navy admiral; Bill Frist, a former U.S. senator (R-TN); Sam Nunn, a former U.S. senator (D-GA); and former CEOs Dick Kovacevich of Wells Fargo and Riley Bechtel of Bechtel.[110][111]
Recognition
Before the collapse of Theranos, Holmes received widespread acclaim. In 2015, she was appointed a member of the Harvard Medical School Board of Fellows[112] and was named one of Time magazine's "Time 100 most influential people".[113] Holmes received the Under 30 Doers Award from Forbes and was ranked number 73 in its 2015 list of "the world's most powerful women".[114][115] She was also named Woman of the Year by Glamour and received an Honorary Doctor of Humane Letters from Pepperdine University.[116][117] Holmes was awarded the 2015 Horatio Alger Award of the Horatio Alger Association of Distinguished Americans, making her its youngest recipient in history.[28][118] She previously had been named Fortune's Businessperson of the Year and had been listed in its 40 Under 40 feature.[119][120] In 2015, she was a member of Bloomberg's 50 Most Influential.[121] In 2016, Fortune named Holmes in its article on "The World's 19 Most Disappointing Leaders".[7]
The case of Holmes is said to have created a stigma for other female entrepreneurs, particularly in the sciences and health care industries, who are often compared to her. Writing in The New York Times, technology journalist Erin Griffith commented that "Holmes continues to loom large across the start-up world because of the audacity of her story, which has permeated popular culture", with female entrepreneurs reporting that "the frequent comparisons [to Holmes] are pernicious".[144] Holmes has also been featured in a number of media works:[145]