Blood, dollars and tears.. Theranos or the story of one of the biggest scandals in Silicon Valley

With her medical analysis company, Theranos, Elizabeth Holmes became the world's youngest billionaire, but her success would not have been achieved without lies and manipulation.

This is how Dominique Nora - delegate of the French magazine L'obs to Silicon Valley - paved the way for a report in which she sheds light on what she called an "extraordinary fraud" from which even some prominent American personalities were spared.

Although the United States has been witnessing resounding financial scandals such as the bankruptcy of Lehman Brothers, the bankruptcy of the giant energy company "Enron" or even the famous Madoff fraud, it is not as strange as the story of the rise and fall of Theranos and its founder Elizabeth Holmes, according to the correspondent of the French magazine.

What happened, according to the reporter, can be described as a romantic epic, which combined the charming charisma of the aforementioned entrepreneur with the fame of American figures who seduced her, such as former secretaries of state Henry Kissinger and George Shultz and media mogul Rupert Murdoch, not to mention former Secretary of Defense James Mattis.

The magazine delegate added, "There is no other case in which this number of people have been deceived for a long time, and the health of thousands of people has been manipulated."

This is how the story began

The beginning of this fairy tale, as the reporter describes it, was in 2003 when a model student, majoring in her first year in chemical engineering, at the prestigious Stanford University, gave up her studies to start her startup.

Holmes was at the age of 19, and she was appreciated in Silicon Valley by everyone, and among the most famous of her admirers were the founder of Facebook Mark Zuckerberg, the founder of "Oracle" Larry Ellison, the founder of "Microsoft" Bill Gates as well as the founder of "Apple" Steve Jobs and many others.

The reporter relies in her report on a journalistic investigation in the form of an investigative book under the title "Bad Blood" by French-American journalist John Carrero, who was the first to expose the Theranos scandal.

Carrero, who is also a journalist for the Wall Street Journal, says that Holmes has always been conceited with her genius. As a 7-year-old girl, she drew a time machine, and at nine began saying she wanted to be a billionaire.

During her family's stay for a few years in Woodside, Silicon Valley, Holmes befriended the daughter of financier Tim Draper, a venture capitalist best known for his investments in Tesla, Skype, Baidu and Twitter, a friendship that would prove decisive later, according to the writer.

Theranos

In her sophomore year at Stanford University, the aspiring student conceived the idea of ​​a diagnostic tape, and patented it. With the encouragement of her professor, Channing Robertson, a well-known engineering scientist, Holmes founded what she called "Theranos", a word that combines the beginning of the word "therapy" which means Treatment and the end of the word (Diagnosis) which means diagnosis.

Holmes wanted this device to be a small, compact laboratory, which makes it possible with just a few drops of blood drawn from the tip of a finger to perform hundreds of medical analyzes, which is a revolution that guarantees speed and helps in not resorting to surgery, as well as being inexpensive and avoiding the chronic patient dispensing with Persistence of exposure to acupuncture, as everyone can, through this device, discover the signs of any dangerous condition that they may be exposed to preventively.

After Holmes noticed that the Stanford University professors were not enthusiastic about her idea, she presented it to the businessman Draper, who immediately approved the project of his daughter's friend.

This startup was able to raise $1.4 billion from individuals, families, and private equity funds, bringing the value of Theranos in 2014 to about $9.5 billion, making Holmes the first self-made billionaire in Silicon Valley, and the world's youngest billionaire, with a potential fortune of $4 billion, according to the report. .

To attract investors and partners, Loebs says, Holmes used all the Silicon Valley clichés: fascination with “disruption” and the prestige of “think differently” and convincing others that technology can “make the world a better place,” etc.

Holmes (centre) on her way to the Federal Court (French)

Edison

According to the correspondent, those whom Holmes appointed in her scientific field were unknown, and their supervision was fictitious, and although she employed excellent engineers, she did not let them do their work properly, as she would not accept any compromise on her "vision", she would not allow taking more than drops Little blood, and she insisted that her small lab, which she called Edison, was the size of a desktop computer, which prevented it from being completed.

Journalist Carrero sums up the deception of this investor: "Holmes wanted to become rich and famous, and she let nothing stand in her way, and in the face of the failure of her technology, she delved more and more into lying and organizing fake demonstrations or promoting her invention by lying, such as saying that her apparatus was authorized by The side of Johns Hopkins University, the US Drug Administration (FDA) and the big pharmaceutical companies, even claimed that their devices were deployed on the battlefields of Afghanistan, and this is nonsense.”

And Professor John Ianidis, a professor of medicine at Stanford University, warns that Silicon Valley's culture of speed is not necessarily good for medicine "when it comes to life and death, risk assessments have to be very strict".

Fraud detection

What not everyone knows - according to the French magazine reporter - is that because Edison does not work, most of the analyzes are performed on devices purchased from competitors.

The researchers discovered that the results of Theranos tests were significantly different from the results of well-known laboratory tests, and were not even consistent with each other, even if they were conducted in a similar time space, to patients mistakenly believing that they had diabetes or cancer, and others believing that they were not, even though they were infected. Really.

This fraud did not stop until journalist Carrero exposed it, which prompted the US Department of Justice, health regulators and the country's stock market to conduct an in-depth investigation into the matter.

In July 2016, the Federal Health Agency closed Theranos lab, deeming it an "immediate risk to patient health and safety" and nearly a million tests were invalidated before the company was finally liquidated in 2018.

Holmes was referred to the US courts last January, and charges were brought against her in 4 out of 11 cases. If the judge rejects her request for a new trial in response to a request she submitted on September 6, the sentencing will be before the end of this month, and in theory This woman is facing a sentence of more than 20 years in prison.