Theranos founder and former CEO continues down the path she began by defrauding her investors and lying to clinical laboratory leaders about her technology’s capabilities
In the latest from the Elizabeth Holmes/Theranos scandal, the federal government has banned Holmes from participating in government health programs for 90 years, according to a statement from the US Department of Health and Human Services (HHS) Office of the Inspector General (OIG). Many clinical laboratory leaders may find this a fitting next chapter in her story.
As a result of the ban, Holmes is “barred from receiving payments from federal health programs for services or products, which significantly restricts her ability to work in the healthcare sector,” ARS Technica reported.
So, Holmes, who is 39-years old, is basically banned for life. This is in addition to her 11-year prison sentence which was paired with $452,047,200 in restitution.
“The exclusion was announced by Inspector General Christi Grimm of the Department of Health and Human Services’ Office of Inspector General,” ARS Technica noted, adding that HHS-OIG also “excluded former Theranos President Ramesh “Sunny” Balwani from federal health programs for 90 years.” This is on top of the almost 13-year-long prison sentence he is serving for fraud.
“Accurate and dependable diagnostic testing technology is imperative to our public health infrastructure,” said Inspector General Christi Grimm (above) in an HHS-OIG statement. “As technology evolves, so do our efforts to safeguard the health and safety of patients, and HHS-OIG will continue to use its exclusion authority to protect the public from bad actors.” Observant clinical laboratory leaders will recognize this as yet another episode in the Elizabeth Holmes/Theranos fraud saga they’ve been following for years. (Photo copyright: HHS-OIG.)
Why the Ban?
“The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) cited Holmes’ 2022 conviction for fraud and conspiracy to commit wire fraud as the reason for her ban,” The Hill reported.
“False statements related to the reliability of these medical products can endanger the health of patients and sow distrust in our healthcare system,” Grimm stated in the HHS-OIG statement, which noted, “The statutory minimum for an exclusion based on convictions like Holmes’ is five years.
“When certain aggravating factors are present, a longer period of exclusion is justified,” the statement continued. “The length of Holmes’ exclusion is based on the application of several aggravating factors, including the length of time the acts were committed, incarceration, and the amount of restitution ordered to be paid.”
Rise and Fall of Elizabeth Holmes
Readers of Dark Daily’s e-briefs covering the Holmes/Theranos fraud saga will recall details on Holmes’ journey from mega success to her current state of incarceration for defrauding her investors.
In November 2022, she was handed an 11-year prison sentence for not disclosing that Theranos’ innovative blood testing technology, Edison, was producing flawed and false results. Theranos had “raised hundreds of millions of dollars, named prominent former US officials to its board, and explored a partnership with the US military to use its tests on the battlefield,” STAT reported.
To get Holmes physically into prison was a journey unto itself. At one point, evidence showed her as a potential flight risk. “In the same court filings, prosecutors said Holmes and her partner, William Evans, bought one-way tickets to Mexico in December 2021, a fact confirmed by her lawyers,” Dark Daily’s sister publication The Dark Report revealed in “Elizabeth Holmes’ Appeal Questions Competence of CLIA Lab Director.”
Drama around her move into prison continued. “The former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict,” Dark Daily reported.
At the same time, Holmes appeared to be on a mission to revamp her public image.
“On May 7, The New York Times profiled Holmes in a massive, 5,000-word story that attempted to portray her as a flawed businessperson who now prefers a simpler life with her partner and two young children,” Dark Daily reported in “Former Theranos CEO Elizabeth Holmes Fights Prison Sentence While Claiming She Was ‘Not Being Authentic’ with Public Image.”
In the Times piece, Holmes talked about her plans to continue to pursue a life in healthcare. “In the story, Holmes contended that she still thinks about contributing to the clinical laboratory field. Holmes told The Times that she still works on healthcare-related inventions and will continue to do so if she reports to prison,” The Dark Report covered in “Elizabeth Holmes Still Wants ‘To Contribute’ in Healthcare.”
In the meantime, her legal fees continued to mount beyond her ability to pay. “Holmes’ prior cadre of lawyers quit after she could not compensate them, The Times reported,” The Dark Report noted. “One pre-sentencing report by the government put her legal fees at more than $30 million,” according to The New York Times.
Apparently, this closes the latest chapter in the never-ending saga of Elizabeth Holmes’ fall from grace and ultimate conviction for defrauding her investors and lying to healthcare executives, pathologists, and clinical laboratory leaders.
—Kristin Althea O’Connor