FRAUD: Theranos used Competitor's machines – Theirs Didn't Work!

FRAUD: Theranos used Competitor's machines - Theirs Didn't Work!

so wait a second here they had investors investing in their company and then like in the backroom they were really testing patients blood with regular machines like not theranos machines that yeah so yeah Wow this is the United States of America versus Elizabeth Holmes and Ramesh Bhiwani this is the thorah nose indictment theranos I think it's theranos the grand jury charges that at all relevant times the defendant Elizabeth a Holmes resided in Los Altos Hills California and owned and operated a health care and life sciences company called theranos Inc Holmes founded theranos in 2003 and served in the role of chief executive officer from 2003 through present the defendant Ramesh Valois nee resided in Atherton California was an employee of theranos September 2009 through 2016 he served as a member of its board of directors its president and his chief operating officer at various times theranos was a private health care and life sciences company it's stated mission was to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood testing blood and interpreting the resulting patient data all for the purpose of improving outcomes and lowering health care costs during its first 10 years from approximately 2003 to 2013 verrano's operated in what Holmes called stealth mode with little public attention while operating in stealth mode theranos pursued the development of proprietary technology that could run clinical tests using only tiny droplets of blood instead of the vials typically drawn from an arm vein for traditional analysis serranos also worked to develop a method for drawing only a few drops of capillary blood from a patient's finger using a small Lancet and collecting and storing that blood in a proprietary device called the nano Taner theranos his stated goal was to produce a second proprietary device that could quickly and accurately analyze blood samples collected in nano tanners theranos referred to these devices using several terms including TSP you thorough nose sample processing unit Edison or mini lab in or around 2013 the rawness began to publicize its technological advances according to theranos its proprietary methods and technologies carried several advantages over conventional blood-testing for example theranos claimed that its laboratory infrastructure yielded test results in less time than conventional labs requiring hours instead of days theranos claimed that his proprietary technology and methods would minimize the risk of human error and generate results with the highest accuracy according to theranos the small blood sample size required for theranos is proprietary tests and it's method of collecting blood by finger stick would also benefit elderly individuals with collapsed veins individuals who required frequent blood tests due to chronic health conditions and any individual who feared needles in addition serranos claimed that its blood test provided substantial cost savings advisor tiesm that it build all of the tests on the medicare clinical laboratory fee schedule at rates 50% or more below the published reimbursement rate prior to its commercial launch Holmes heavily promoted thorough Knossos supposed technological and operational capabilities in a September 2013 press release theranos claimed that it had eliminated the need for larger needles and numerous vials of blood by relying instead on samples taken from a tiny finger stick or a micro sample taken from traditional methods in another press release dated November 13th 2013 serranos touted its use of blood samples as small as a few drops 1000th the size of a typical blood draw in that same statement the company again to clear that it had eliminated the need for large needles and numerous files of blood typically required for diagnostic lab testing in addition to directing the actions of the company Holmes also made statements to the media advertising the capabilities of theranos technology in an interview for a Wall Street Journal article published on September 9th 2013 Holmes said that theranos could run any combination of tests including sets of follow-on tests at once very quickly all from a single small blood sample theranos also used his website to increase awareness of its technology on its website theranos displayed a nano tainer blood balancing on a fingertip along with the slogan one tiny drop changes everything the website also assured visitors that for the first time Thoreau knows his laboratory could perform tests quickly and accurately on samples as small as a single drop so that's that's a pretty remarkable claim and it would definitely change the entire blood testing industry if you no longer needed small vials of blood and instead could do samples by taking a drop of blood putting it into a small container like a nano Taner or whatever which somehow preserves it appropriately and then sending that to the to the lab I guess that would that would mean things for patients and patients would probably get better care because they would need to give less blood I'm guessing it that's all a good thing as part of his commercial launch the Renault spur sued a partnership with national pharmacy chain Walgreens on September 9th 2013 the Rhinos announced that it would be rolling out the Rhinos Wellness Center's inside Walgreens retail locations in a press release on that date their autos promoted its testing services by stating that consumers can now complete any clinician directed lab tests with as little as a few drops of blood and results available in a matter of hours Serrano's offered tests to the public beginning in late 2013 through its Wellness Center is located in Walgreens stores in Palo Alto California and Phoenix Arizona and surrounding areas the scheme to defraud investors from a time unknown but no later than 2013 through 15 homes and Bhiwani and others known and unknown to the grand jury through their company theranos engaged in a scheme planned and artifice to defraud investors as to a material matter and to obtain money and property by means of materially false and fraudulent pretenses representations and promises beginning in approximately 2013 they made materially false and misleading statements to investors that at the time of the statements the Ragno says proprietary analyzer the TSP you Edison or minilab was presently capable of accomplishing certain tasks such as performing the full range of clinical tests using small blood samples drawn from a finger stick and producing results that were more accurate and reliable than those yielded by conventional meth at a faster speed than previously possible in truth they knew that the Renault is proprietary analyzer had accuracy and reliability problems performed a limited number of tests was slower than some competing devices could not compete with larger conventional machines in high throughput or the simultaneous testing of blood from many patients or applications they represented to investors that theranos was presently a financially strong and stable company including that theranos would generate over 100 million dollars in revenues and breakeven in 2014 and that the Renault is expected to generate approximately 1 billion in revenue in 2015 when in truth they knew that theranos had and would generate only modest revenues roughly a few hundred thousand dollars in 2014 and in 2015 they deceived investors through misleading technology demonstrations intended to cause potential investors to believe that blood tests were being conducted on theranos is proprietary analyzer when in truth Holmes and Valle Hwanhee knew that theranos is proprietary analyzer was running a null protocol or demonstration to make the analyzer appear to be operating but was not testing the potential investors blood and yet failed to disclose that fact they are presented to investors that theranos presently had an expanding partnership with walgreens that is theranos would soon dramatically increase the number of wellness centers within Walgreens stores when in truth they knew that by late 2014 thoroughness retail walgreens rollout had stalled because of several issues including that walgreens executives had concerns with the performance of the machines they are presented to investors that theranos presently had a profitable and revenue generating business relationship with united states department of defense and a thorough Knossos technology had deployed to the battlefield when in truth serranos had limited revenue from military contracts and its technology was not deployed in the battlefield they are presented to investors that the FDA did not need to approve its proprietary analyzer and tests but instead that thoroughness was applying for FDA approval voluntarily because it was the gold standard when in truth Holmes and bomani knew that the FDA was requiring theranos to apply for clearance or approval for its analyzer and tests they represented to investors that theranos conducted its patience tests using theranos manufactured analyzers when in truth they knew that theranos purchased and used for patient testing third-party commercially available analyzers so wait a second here they had investors investing in their company and then like in the backroom they were really testing patients blood with regular machines like not theranos machines that yeah so yeah Wow that's some kind of that's some kind of trademark violation too by the way because you've now violated the source of a good or service you've you've counterfeited basically the source of a good or service you've said you're performing you know this well you know because of your own good or service but you're actually using a competitor's good or service so you're infringing on their trademark and the competition between you two they represented two investors that theranos technology had been examined used and validated by several national or multinational pharmaceutical companies and research institutions in fact they knew that these pharmaceutical companies had not examined used or validated their technology they are presented to members of the media for publication many of the false and misleading statements ascribe of knowing their statements to the members of the media were false and misleading and after receiving false and misleading statements etc etcetera etcetera persons known to the grand jury as investors one two three four and five initiated electronic wire transfers for the purpose of investing money in theranos these wires specifically alleged in paragraph 24 use a domestic electronic funds transfer system known as the fed wire system which is owned and operated by the Federal Reserve between 2013 and 2016 homes and bomani through advertisements and solicitations encourage and induce doctors and patients to use their laboratory testing services they devised a scheme to defraud doctors and patients through explicit and implicit claims that they were fast reliable cheap blood tests based on these representations many hundreds of patients paid or caused their insurance to pay Theron OS or Walgreens acting on behalf of Thoreau nose for blood tests and test results sometimes following referrals from their defrauded doctors despite representing two doctors and patients that theranos could provide such tests they knew the technology was not capable of consistently producing accurate and reliable results including calcium chloride potassium bicarbonate HIV hba1c HCG and sodium despite their knowledge of theranos accuracy and reliability problems they used interstate electronic wires to purchase advertisements intended to induce individuals to purchase the rose blood tests at Walgreens stores in California and Arizona through these advertisements homes and Bhiwani explicitly represented to individuals that theranos his blood tests were cheaper than blood tests from conventional laboratories to induce individuals to purchase theranos his blood tests homes in bhiwani held thorough noses blood tests out to individuals as accurate and reliable so they are charged with conspiracy to commit wire fraud against the Renaud's investors Elizabeth Holmes and Ramesh Sonny bhiwani and others known and unknown to the grand jury did knowingly and intentionally conspire and agree together and with each other to commit wire fraud by devising a scheme and artifice to defraud as to a material matter and to obtain money by means of materially false and fraudulent presentations specifically by soliciting investments through making the false and fraudulent representations set forth in this indictment so conspiracy to commit wire fraud against doctors and theranos in the same sort of thing specifically by soliciting encouraging or otherwise inducing doctors to refer and patients to pay for its laboratory and blood testing services under the false and fraudulent pretenses that the rod knows technology produced reliable and accurate blood test results wire fraud here are the amounts $100,000 is $5,000,000 $5,000,000 40 million dollars a hundred million dollars six million dollars did you want an update on the bail situation go for it what's the update on the bail situation homes in Bhiwani surrendered to the FBI they were released on 500,000 on each and they were ordered to surrender their passports when they were released so clearly they're not meant to leave the country as well yeah they're they're out on bail basically though they also wired patients blood results in violation of wire fraud law they have been asked to forfeit the following property sum of money equal to the amount of proceeds obtained a PA upon a conviction upon a conviction they shall forfeit property okay that's what that says so holy mackerel so when you see that in the news when you see people talking about the thoroughness theranos investors being defrauded and the patients being defrauded and this 34 year old woman Elizabeth Holmes I want to look up her picture because I was she's she's younger than me I'm like not that that means anything anymore I mean people are people and then you can see that's what Elizabeth Holmes looks like an investor and former entrepreneur she is indicted for wire fraud she is the founder and CEO of theranos she was named as the youngest self-made female billionaire due to the nine billion dollar of valuation of theranos the next year forbes revised the valuation of her interest in theranos to zero given an updated 800 million valuation of theranos and the fact that many of theranos investors hold preferred shares and they would be perfect before she would yeah yep MZ aura has a point if you owe $100 that's your problem if you owe a billion dollars that's their problem they're not gonna get and never gonna get a billion dollars out of her whatever money you know unless she goes on to invent like the cure for cancer and then sells it for nine billion dollars and it gives that money back to the investors like you know what I mean like that's this there's gonna have to be some other remarkable thing it's there's otherwise nothing here there's nothing to get at unless she is also independently wealthy which I don't I'm not looking into I don't really care for to do that thank you very much to our sponsors this channel would not be possible without your support thank you to all of our patreon sponsors and thank you to all the twitch subscribers as well you can go to sponsor thank you very much to Kareem Harper who is still sponsoring us at the $500 level in June here thank you very much Kareem we're going to be in touch with you about our investigative report and your perspective on the cambridge analytical situation and thank you to our $50 plus supporters Jonathan dou DJ Gilcrease John Steele Gavin Bernard evey Andy Kyle mudra Sean McNamara Vera maintained Johnny Sanderson Michael Pierce and William Gonzales your your support us until our level really helps 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kind of turning and burning of the world so Niko let's get Niko back up here for a goodbye good boy are you looking for more treats is that what this is all about treats how about me what is it about me and you huh how about us how are we doing are we good are you my favorite dog with you the boy dog I love that I'll put it down you're my favorite boy job I love you very much can you say goodbye can you say goodbye Civic and all the people who get to their Tuesday absolutely Sunday afternoon so Tuesday so thank you very much for joining me love you all I am Leonard French your favorite copyright attorney and I'll see you in the Vaz de trop and on next Sunday's live show love you all bye

46 thoughts on “FRAUD: Theranos used Competitor's machines – Theirs Didn't Work!

  • When this woman first broke on the news I said that she was lying. It baffles me how anyone could believe her … let alone invest millions into some miracle process that she couldn't talk about.

  • They were advertising their prowess on billboards here in Phoenix. I never bought any of it because it sounded wrong. Miraculous tests and whatnot – must've found some really dumb investors

  • I'm a medical technologist, I run blood tests all day long for a hospital.
    This company was obviously fraud. We can run the most common tests with ~250ul of serum/plasma equivalent to ~0.5ml of blood. We use $40million in equipment to do that. Equipment that is all new in the last 10 years. These analyzers have billions in research behind them. Billions of dollars in Chemical reaction research. You can't just replace that or we already would have on at-least the most common tests. We measure over 100 different analytes in the chemistry lab alone, each with a different chemical reaction. This is not a problem that one small company is going to fix overnight.

    Theranos fired their scientists, claimed they solved a trillion dollar problem, and produced no patents or evidence for it. This is equivalent to a tesla showing off it's new anti-grav car.

    Their investors are fucking dumb.

  • How embarrassing for all involved; this technology never seemed feasible (at this point in time) from the start. Hopefully this debacle doesn’t discourage further research and attempts.

  • No, it's pronounced with the accent on the first syllable, schwa on the second: THAIR-uh-NOES. Those of us in Arizona–which was at the epicenter of the debacle, where our government-as-business governor had state law changed specifically to benefit Elizabeth Holmes–know the pronunciation as a result of complete media saturation.

  • Sad truth is many in SV knew of the fraud just like some of the other upstart companies (i.e. Just, Hampton Creek, etc.) but they chose to keep silent and ride the train because it's profitable. Then when the truth finally comes out…it's like…OMG how did this happen? see

  • Hope John Carreyrou gets another Pulitzer (his third!). He did a HUGE public service by unmasking this atrocity.

  • How did this go on for TEN YEARS??? I don't see how the public, the board, Walgreens, Safeway and even her employees could be played for that long. All those magazine covers are disgusting. None of their machines ever worked. What they offered the public was a complete sham. They could have been responsible for innumerable deaths. This isn't some new phone or talking refrigerator – it's HUMAN LIF,E, the lives of chldren and old people and ALL people.

  • Where are the patents? Just pretend it's valid technology that works as advertised. No patent protection, anyone can make and profit by it.

  • How was it possible for Theranos to run those tests, if they only drew a drop of blood, and those machines use normal Vacutainer(tm)-sized sample volumes? Did they dilute the blood, or modify those machines? I am aware that the machines typically use a hypodermic to draw a subsample from the Vacutainer vials. Is it feasible to take much smaller samples from patients already?

  • The reason why people were fooled was because they never ask important questions. What was the theory behind her idea? If they actually asked that, they would have known that she had no idea in which direction it was going to take and the tech she wanted to make was non-existent which can take decades before such technology can start to take form.
    They just didn't want to miss out and in the end, they burned their own money. It wasn't just fraud, it was a poorly constructed fantasy.

  • The only question i have is why people who engage i this kind of fraud say around. If your not prepared to take the money and run why bother steeling it.

  • Got to say one thing for Ms.Betsy, a large number of the big investors she screwed were profoundly deserving targets of her fraud. Victimized by their own greed.

  • Good lord, this Theranos suit is like a horrible shitty gift that keeps on giving.
    A cancer of corporate wire fraud.
    The equivalent of deliberately importing several container loads of cheap lead-paint-coated toys, and then distributing them to all the orphanages in America.
    She's up on criminal charges, but she'll never see the inside of a jail cell, sadly.

  • if the advertisements occurred only in the states of operation license does the wire-fraud-advertising actually count?

  • Suggestion for a new video, Bethesda v. Warner Bros.

  • It's crazy to think that she got so far with so much investment into her fraudulent scheme when a basic understanding of medicine and research would tell anyone to be warned otherwise.

  • It sounds like they tried to make a legitimate product, but then it flopped. I don't know, to me it sounds like they were trying to do damage control to keep afloat while continuing research on a product that preformed worse than expected, not that they originally set out to separate people from their wallets.

  • Wow, an Enron scheme (drumming up lots of monetary support for fraudulant purposes and probable embezzlement) and a Volkswagon scheme (doctored and falsified performance of product) all in one go, AND they essentially stole somebody else's work to do it.

  • But yet she still has a faithful following . Let me guess somehow it will be someone else fault and she had nothing to do with this . She is a sociopath and should be on a chain gang cleaning ditches in the Everglades . But my guess is her male counterpart will be thrown under the bus .

  • The stock holders who lost money will use their Capital Losses to offset other Capital Gains to reduce their income taxes. So it US, THE TAXPAYERS, that will ultimately pay the cost of this fraud.

  • An industry insider told me that this technology is physically and mathematically impossible to the point that he told people not to invest in it the moment he heard about it. The reasons are as follows: particles of whatever in a fluid are Poisson distributed, thus there is an inherent limit to the statistical significance of less than 1mL of blood for the purpose of testing for small numbers of large particles like proteins, viruses, or bacterium. The opposite case is for blood sugar testing for diabetics where the molecule tested is small and there is a large amount of it.

    Simply put: If you serially dilute a fluid full of bacteria into wells of growth media, there will come a level of dilution where there will be 1 bacterium for every 2 wells. Thus half of the wells at that dilution would yield no colony. Theranos attempted to ignore this and fool the public with something that could never have worked. I sincerely hope they get sued for fraud, and prosecuted for misleading the FDA. The company and its CEO, because there is no way that she didn't know.

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