Theranos founder Elizabeth Holmes to undergo psychological evaluation (2024)

The woman accused of being behind one of the most audacious and enthralling frauds of the century will have to spend up to 14 hours being evaluated by United States government-appointed psychologists after an attempt to plead mental impairment apparently backfired.

Elizabeth Holmes, 36, and her much older sometimes-boyfriend/business partner Ramesh "Sunny" Balwani, 55, were charged in June 2018 with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

The charges stemmed from Holmes' ill-fated startup Theranos, which she dropped out of Stanford University aged 19 to pursue, hoping to revolutionise blood-testing by performing numerous tests on a single drop of blood.

According to Wall Street Journal reporter John Carreyrou, who wrote extensively on Theranos' rise and fall for the newspaper and in his own book Bad Blood: Secrets and Lies in a Silicon Valley Startup, Holmes may have started Theranos with good intentions, but was primarily motivated by a desire for success and wanted to be the next Steve Jobs.

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She frequently copied his black turtleneck and jeans outfit and reportedly spoke in a voice several octaves lower than her real one.

"Her ambition in achieving this vision was so voracious that she just refused to acknowledge any setbacks and refused to let anything get in the way, and so she started cutting corners, and she silenced people, and she and her boyfriend intimidated people, threatened people, and it was all in the name of this great vision," Carreyrou told Tech Republic last year.

"It really was an attitude of the ends justified the means. The problem is that the means got so distasteful that it became wrongdoing and essentially white-collar crime."

Some of those means included allegedly deceiving US pharmacy chain Walgreens into using the Theranos blood-testing machines in store, the samples for which were actually diluted to be tested on more advanced testing machines, which diluted them further to the point of making them useless.

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Theranos was also accused of lying about its devices being used by the US military, as well as overstating its revenue, claiming it made $100 million in 2014 when it really made 0.1 per cent of that.

In December last year, Holmes' lawyers informed the court they intended to argue a case of mental impairment, with plans to cite "expert evidence relating to a mental disease or defect or any other mental condition".

The expert they wanted to bring to court was named in court documents obtained by Ars Technica as California State University psychology professor Mindy Mechanic, who specialises in "psychosocial consequences of violence, trauma, and victimisation with an emphasis on violence against women and other forms of interpersonal violence".

The plan has somewhat backfired, with US District Judge Edward Davila instead saying Holmes should be evaluated by two doctors the Government will pick, for up to 14 hours over a period of two consecutive days.

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Davila also ruled the evaluation be filmed, against Holmes' objections.

Theranos founder Elizabeth Holmes to undergo psychological evaluation (1)

While the story of Theranos is absolutely crazy, according to Harvard University law professor Noah Feldman, Holmes probably is not.

"The news that Elizabeth Holmes' lawyers plan to present an insanity defence in her federal trial for criminal fraud is frankly astonishing," Feldman wrote for Bloomberg.

"Maybe the evidence against her is so strong that her lawyers are desperate. Or maybe they are hoping to follow a strategy of making the jury feel sympathy for her, giving them an excuse to acquit," Feldman wrote.

"But the reality is that it is extremely difficult for a defendant to prove insanity in federal court."

It will get two steps harder now that her team will be forced to use a pair of government-appointed evaluators.

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Feldman said Holmes' lawyers will have to prove to the jury whether she knew what she was doing and whether she knew it was wrong.

"She was running a company and making public statements about her product, and certainly knew that those were the activities in which she was engaged.

"Presumably, Holmes' lawyers will try to maintain that she didn't know it was wrong to deceive investors and the rest of the world about Theranos' blood tests," Feldman added.

Exactly. https://t.co/Ev3pTKZpmB

— John Carreyrou (@JohnCarreyrou) September 11, 2020

Carreyrou said the attempt to receive testimony from Dr Mechanic indicated Ms Holmes' lawyers planned to lay a lot of blame at Mr Balwani's door.

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Theranos founder Elizabeth Holmes to undergo psychological evaluation (2024)

FAQs

What did Theranos do that was so bad? ›

They revealed lies to board members, a culture of intimidation and secrecy, technology that repeatedly failed quality assurance and crucially, results sent to real patients that were fundamentally incorrect, upon which life-changing medical decisions were being made.

What was Elizabeth Holmes' rationalization? ›

Rationalization: Holmes frequently justified lying as necessary to keep the company afloat. Self-efficacy: Holmes received frequent glowing praise in the press and from her own board, which may have helped convince her that she could achieve the impossible.

What is the valuation of Theranos? ›

Theranos reportedly raised roughly $724 million of capital from venture capitalists and private investors, ultimately attaining a valuation of $10 billion. Theranos CEO Elizabeth Holmes claimed that the company had developed a new technology to test blood, but these claims were later discovered to be fraudulent.

Did Elizabeth Holmes have imposter syndrome? ›

Self-aggrandizement ironically locked Holmes into years of painfully certain imposter syndrome as she stalled investors, hoping she could produce a technology she had already guaranteed she had cracked.

What was Elizabeth Holmes unethical behavior? ›

Holmes lied to investors, the public, and even her own employees to buy time to fix the device's problems. Eventually, her lies came to light and she was charged with multiple counts of fraud and conspiracy.

Who killed themselves because of Theranos? ›

Fry viewed the Theranos scandal including Gibbons's suicide as a tragedy of "epic Shakespearean greed". Ian Gibbons' role in attempting to bring to light the inaccurate nature of Theranos testing machines was highlighted in a 2022 article on ethics in scientific research for the journal Science and Engineering Ethics.

Why did Elizabeth Holmes change her voice? ›

And dramatic, sustained pitch changes in speech can be associated with heightened emotional states without indicating a put-on voice. At the same time, people who know Holmes have claimed that she changed her voice in order to cultivate a persona as a Silicon Valley wunderkind.

What was the lesson of Elizabeth Holmes? ›

The lesson here is that honesty and transparency are fundamental in any business endeavor. Building trust and maintaining integrity should always take precedence over short-term gains. 2️⃣ Ethical Decision-Making: Holmes faced allegations of prioritizing fraud rather than admitting failure.

Does Theranos still exist? ›

Shutdown. On September 4, 2018, Theranos announced in an email to investors that it would cease operations and release its assets and remaining cash to creditors after all efforts to find a buyer were fruitless. Most of the company's remaining employees had been laid off on the previous Friday, August 31.

Is Elizabeth Holmes still rich? ›

Holmes, who was worth $4.5 billion at Theranos' peak, says she lost it all when the company's valuation collapsed after revelations it was lying about its capabilities. She has claimed in court filings that she has "no assets" and no hope of restarting her career after the Theranos scandal.

Will Elizabeth Holmes pay back? ›

Holmes has acknowledged her dismal financial fate, telling the New York Times this month she will "have to work for the rest of my life" just to pay millions of dollars in legal fees. But there are a number of reasons why her victims and many others are unlikely to get the money back.

Could Theranos have ever worked? ›

Short answer: the main technology didn't work well enough to do what Elizabeth Holmes of Theranos claimed, so a “machine” couldn't be fixed that would solve the lack of accuracy. She ignored the warnings of staff who told her so and she chose to perpetrate a fraud instead.

Did Elizabeth Holmes like Steve Jobs? ›

But this wasn't just a connection the media made on a whim. Holmes herself was obsessed with the Apple founder and actually tried to emulate several of his characteristics and practices in her own life.

Did Elizabeth Holmes talk funny? ›

Holmes speaks in a soft, slightly low, but totally unremarkable voice, no hint of the throaty contralto she used while running her defunct blood-testing start-up Theranos. ' And she said that even her partner Billy Evans admits that the voice was 'real weird.

What does imposter syndrome feel like? ›

When someone has impostor syndrome, they experience repeated feelings or thoughts that they are incompetent or not good enough, despite evidence to the contrary. These beliefs often have roots in someone's personal history and tend to play out in work, academic, and other high-pressure settings.

The Untold Truth Of Elizabeth Holmes - Nicki SwiftNicki Swifthttps://www.nickiswift.com ›

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Elizabeth Holmes built Theranos into $9 billion company. Then, it came crashing down: A jury has now found Holmes guilty of four charges in a criminal fraud tri...
It wasn't all that long ago that we lauded Elizabeth Holmes, the now fallen founder of blood-testing company Theranos. She was a self-made billionaire with ...

What was the Theranos scandal in a nutshell? ›

Elizabeth Holmes dropped out of Stanford University to launch the blood testing disruptor Theranos and built it to a $9 billion valuation. But the tech adage “fake it until you make it” didn't quite work for this medical device startup, and charges that the devices didn't work mounted.

How was Theranos ethically wrong? ›

The principle of honesty and the standard of integrity were breached when Holmes provided false statements to investors and showed them fake demonstrations of the medical testing device to persuade them to invest in her company.

Why Theranos would never have worked? ›

Short answer: the main technology didn't work well enough to do what Elizabeth Holmes of Theranos claimed, so a “machine” couldn't be fixed that would solve the lack of accuracy. She ignored the warnings of staff who told her so and she chose to perpetrate a fraud instead.

Did the Theranos machine ever work? ›

The company claimed that it had devised blood tests that required very small amounts of blood and that could be performed rapidly and accurately, all using compact automated devices that the company had developed. These claims were proven to be false.

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