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Elizabeth Holmes

Holmes with Bill Clinton in 2015. Taylor Hill/FilmMagic

Elizabeth Holmes, founder of the discredited blood-testing firm Theranos, has been convicted of four counts of fraud and faces decades in prison. The 37-year-old’s trial lasted nearly four months and shed new light on one of Silicon Valley’s most dramatic falls from grace.

How big a deal is this?
Big. Theranos claimed its microwave-sized machines could detect countless diseases with just a few drops of blood. The idea was that these units could essentially replace entire medical laboratories and be installed in supermarkets, pharmacies and homes. Investors including Rupert Murdoch and Mexican mogul Carlos Slim poured an estimated $1bn into the company. At its height in 2014 the firm was valued at $9bn, giving Holmes a personal fortune of $4.5bn.

How did it all begin?
Holmes was born in Washington DC to well-off parents, and her soaring ambition soon became apparent: aged nine, she declared that she wanted to be a billionaire, and wrote a letter to her father saying she was determined to discover “something that mankind didn’t know was possible to do”. She founded Theranos in 2003 and dropped out of her chemical engineering degree at Stanford shortly after. Her aim, inspired by her fear of needles, was to create a device that could test for diseases with only a pinprick-worth of blood. She adopted a punishing daily schedule that began at 4am with prayer and meditation. Within a year, the fledgling company had raised more than $6m in funding and was valued at $30m.

She must have had a way with investors
She did. With piercing blue eyes that barely seemed to blink, black turtleneck jumpers modelled on her hero Steve Jobs, and a voice she lowered by an octave to add gravitas, Holmes won over some of the world’s most powerful men. Two former US Secretaries of State, George Shultz and Henry Kissinger, were impressed enough to join Theranos’s board. In a 2014 New Yorker profile of Holmes, Kissinger raved about her “ethereal quality” and “intellectual dominance” (though he did describe her four-hour board meetings as “a human rights violation” – which coming from him is quite something). These powerful backers helped distract from the conspicuous lack of medical credentials in Theranos’s much-hyped technology.

Was it never properly tested?
When the New Yorker’s Ken Auletta was shown around the Theranos lab, he said that what happened in the Edison – the firm’s signature testing machine – was “treated as a state secret”. In fact, the device’s repeated failures led the company to buy conventional technology from rivals. Prospective investors would be distracted by office tours while their blood samples were ushered away for testing on this equipment, with the results presented as coming from the Edison. Within the company, failures were covered up with the strict instruction that employees from separate departments weren’t to talk to each other about work.

Doesn’t sound like a cheery office
It wasn’t. Former Theranos receptionist Cheryl Gafner described Holmes as a cold-blooded creature “hatched out of a pod”. Holmes surrounded herself with gun-toting security guards, personal assistants and a private chef, and spent $100,000 on a conference table. Her second-in-command (and secret lover) was Sunny Balwani, a Pakistan-born software entrepreneur 19 years her senior. He owned a Lamborghini with the number plate VDIVICI, in homage to Julius Caesar’s veni vidi vici. As Theranos was collapsing in 2017, Holmes bought a Siberian husky she named Balto in a misguided attempt to cheer up her beleaguered staff. The dog, which Holmes began insisting was a wolf, instead caused chaos, peeing and defecating all over the office.

When did Theranos fall apart?
In 2015, John Carreyrou from The Wall Street Journal published a string of articles questioning the reliability of Theranos’s technology and claiming that the company didn’t actually use the tech in most of its commercial deals. His investigations prompted investors and medical authorities to turn on the firm. By 2016, Holmes’s net worth was written down to virtually nothing. Lawsuits piled up and in 2018, Theranos was dissolved, with Holmes and Balwani arrested on charges of fraud.

How did Holmes’s trial go?
It was repeatedly delayed due to the pandemic, and the birth of Holmes’s son William in July. She had married the father, Billy Evans, the 29-year-old scion of a luxury hotelier, in 2019. His family were less than impressed, reportedly saying he had been “brainwashed”. Others thought Holmes may have married Evans because she needed cash for her legal defence. When the trial finally began last September, her defence laid much of the blame with Balwani, who Holmes claimed had raped her and exerted tight control over her diet and sleeping habits. He denies her accusations. But Holmes also admitted she had added the logos of pharmaceutical companies like Pfizer and GlaxoSmithKline to Theranos documents, to suggest, falsely, to investors that they had vetted the technology.

What happens next?
Holmes will likely only be sentenced after Balwani’s trial on similar charges, which begins next month. Two separate screen adaptations of Holmes’s story, one for film and one for TV, are in the works, with Holmes played by Jennifer Lawrence and Amanda Seyfried respectively. And though Holmes dreamed to be as influential as Steve Jobs, it’s her Jobs-inspired outfit that’s made the biggest mark: around Halloween, shops in San Francisco tend to run out of her signature black turtlenecks.