Elizabeth Holmes and Ramesh “Sunny” Balwani are charged with two counts of

conspiracy to commit wire fraud and nine counts of wire fraud. The indictment charges
each defendant with two counts of conspiracy to commit wire fraud, in violation of 18
U.S.C. § 1349, and nine counts of wire fraud, in violation of 18 U.S.C. § 1343.
According to the indictment, the charges come from allegations that Holmes and
Balwani engaged in a multi-million-dollar scheme to dupe financial investors, and a
separate scheme to defraud doctors and patients.  Both schemes involved efforts to
advance Theranos, an organization founded by Holmes and was establishes in Palo
Alto, California. Theranos was a private health care and life sciences company with the
expressed mission to revolutionize medical laboratory testing through purportedly
innovative methods for drawing blood, testing blood, and interpreting the subsequent
patient information by just using a small amount of blood.
The indictment charges that Holmes and Balwani defrauded doctors and patients:
(1) by making bogus claims concerning Theranos’s ability to provide precise, fast,
reliable, and cheap blood tests and test results, and
(2) by discarding information concerning the constraints of and issues with Theranos’s
technologies.  The defendants knew Theranos was not capable of consistently
producing accurate and reliable results for certain blood tests, including the tests for
calcium, chloride, potassium, bicarbonate, HIV, Hba1C, hCG, and sodium.
In particular, the defendants claimed that Theranos developed a revolutionary and
proprietary analyzer that the defendants referred to by various names, including as the
TSPU, Edison, or minilab. They claimed that the analyzer was able to perform a full
scope of clinical tests using small blood samples drawn from simply a finger prick.   The
defendants additionally addressed that the analyzer could produce results that were
more accurate and reliable than those yielded by conventional methods, all at a faster
speed than previously possible.
If convicted, the defendants face a most extreme sentence of twenty (20) years in
prison, and a fine of $250,000, plus restitution, for each count of wire fraud and for each
conspiracy count.  Nonetheless, any sentence following conviction would be imposed by
the court after consideration of the U.S. Sentencing Guidelines and the federal statute
governing the imposition of a sentence, 18 U.S.C. § 3553.  Both defendants are
currently out of custody.
The downfall of Theranos began in 2015, when a series of reporting and regulatory
investigations uncovered doubts about the company's technology claims and whether
Holmes had misled investors and the government. The company faced a string of legal
and commercial challenges from medical authorities, investors, the U.S. Securities and
Exchange Commission (SEC), Centers for Medicare and Medicaid Services (CMS),
state attorneys general, former business partners, patients, and others.