Wire fraud is a modern criminal act that involves the use of newer devices such as telecommunications or the Internet. Elizabeth Holmes, the founder and chief executive of Theranos, got involved in Wire Fraud. This accusation raised many questions; “Why did Elizabeth Holmes get accused of Wire Fraud?” Let’s find out more.
Elizabeth Holmes’ was accused of wire fraud due to the allegations of taking over $700 million from investors using a false product. They also are accused of claiming to have $100 million in revenue back in 2014
Who is Elizabeth Holmes?
Elizabeth Holmes was a former American Businesswoman who is the founder of Theranos. Her company specializes in technology that caters to human health, revolutionizing different methods in the field and more. The company was quite successful to the point where it made Elizabeth Holmes one of the wealthiest and youngest female billionaires in the United States, a feat of which not everybody could achieve.
Holmes’ success did not last long; she was put in the middle of a massive scandal. It affected both her and the corporation, and This eventually led to her downfall. Going further in this case, the wire fraud claims against Holmes are attributed to the allegations of defrauding several doctors and patients who trusted their products. This resulted in a multi-million dollar investment scam. (Source: The Washington Post & Bloomberg.com)
What is the Verdict in Holmes’ Trial?
The allegations of wire fraud were proven. This tainted the reputation of both the technology giant and Holmes herself. She had no choice but to pay the fine of $500,000 and give back her shares that were valued at 18.9 million shares back. To top it all off, she was also barred from being a director or even holding a position on the board at Theranos or any other company for that matter for ten years.
From being one of the youngest and wealthiest, she has been called one of the World’s Most Disappointing Leaders by Fortune magazine. (Source: San Francisco Chronicle & Fortune)
What Happened to Theranos After the Trial?
After the accusations and the trial, Holmes was pushed back, which ultimately led to Theranos shutting down in 2016. Their clinical labs and centers were no longer operational. The company had to let go of about 40% of its workers. They then closed entirely in September 2018, Months after Holmes was barred for being the chief executive and had to step down from her position signaling the untimely death of Theranos.
It is almost impossible for a company to come back after having a multi-million dollar scam exposed in public. Fake public tests, fake results, which led to plenty of people not getting the help they needed, fraud machinery, and so much more. For a company to rise from such a big exposé will take more than just a miracle, something bigger than a miracle that didn’t happen to Theranos. (Source: Fox Business)