True Crime with Kendall Rae - Elizabeth Holmes, Ex-CEO of Theranos & How She Fooled the World

Episode Date: October 4, 2022

Elizabeth Holmes is the founder and Ex-CEO of Theranos, a company that was shut down known for its unlikely claims to have revolutionized blood testing using tiny amounts of blood, such as from a finger prick. This episode is sponsored by: Flip - promo code: kendallrae Everlywell Check out Kendall's other podcasts: The Sesh & Mile Higher Follow Kendall! YouTube Twitter Instagram Facebook Mile Higher Zoo REQUESTS: General case suggestion form: https://bit.ly/32kwPly Form for people directly related/ close to the victim: https://bit.ly/3KqMZLj Discord: https://discord.com/invite/an4stY9BCN CONTACT: For Business Inquiries - [e-mail]

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and upcoming people in Silicon Valley. And it turns out that she was actually a huge fraud. So I thought it would be interesting to look at the whole story as I'm sure some of you have heard about her, but maybe you don't know exactly how this happened or the details behind it. So Elizabeth and Holmes was born on February 3rd of 1984 in Washington, D.C.

And what's interesting about her family dynamic is on one side of the family they had a lot of engineers and on the other side of the family they had a history in the medical field. So it seems like she had skills in both of those areas and just ran with both of them. One thing that you should know about Elizabeth is that she was really close with her uncle and I think it was a huge driving factor in why she does what she does or at least she says that it was a big driving factor why she has created her entire company. She remembers going to the beach with him, she said he loved the beach, but at some point he actually got diagnosed with cancer, um skin cancer that ended up going into his brain as well and it wasn't long before he passed away at a pretty young age

You never got to see his children grow up and this really affected Elizabeth a lot at some point in her childhood Elizabeth and her family moved to Texas and Elizabeth attended a university prep school called st. John's school in Houston and during high school she was interested in computer programming and claims that she actually started her first business, selling C++ compliers, which are programs that translate computer codes to Chinese universities. And Elizabeth was so smart that her parents actually started having a Mandarin tutor come to their house to teach her Chinese, which Mandarin Chinese,

I wouldn't know, because I don't know how to speak it, but I've heard it's very, very hard to learn. It's a very difficult language to master, and so for her to want to just do this outside of school Just for fun or just to further her education or maybe she knew that this would just be vital to her future Because Elizabeth started talking about being successful really really young when people ask what she wanted to do for a living She would say that she wanted to be a billionaire one day and when she was a child She even knew that she wanted to create something that would change the world.

Like something the world really needed. She really wanted to be an inventor of something and be very influential in some type of space. And it seemed like medical was the most interesting to her from the beginning. There's even a letter that she wrote her father where she talks about how she wanted to invent something just like him. What I want out of life is to discover something new, something that mankind didn't know as possible. I also want to study about man in his ways. Life is really interesting.

I love being with you. It's my most favorite thing in the whole world. Love is with. And eventually she had almost mastered Mandarin Chinese. So by mid-high school, she was already trying to get into Stanford for their summer Mandarin Chinese program. And after convincing people just by speaking Chinese in front of them, they eventually allowed her to get into this class.

And she started taking college courses. In 2001, Elizabeth ended up attending Stanford full-time, where she studied chemical engineering and worked as a student researcher and lab assistant in the engineering school at Stanford. And after her freshman year, Elizabeth worked in a laboratory at the Genome Institute of Singapore.

And in 2002 at the age of 18, Elizabeth met a man named Sunny while she was still in school. And Sunny was a Silicon Valley technology entrepreneur and was 19 years older than her and still married to another woman at the time that they met. But it wasn't long before he divorced his wife and started dating Elizabeth full-time. So they dated for quite a bit and then in 2005 they ended up moving in together. Now one thing that we learned later on is that

Sunny was not invited to join the company until 2009 but he was definitely influencing Elizabeth Sonny no se convirtió a la empresa en 2009, pero se fue definitivamente influenciando el bifo de la forma antes. Ben ya por grandes ofertas en las camionetas hechas para servir. Ahora, durante la temporada RAM, obtendí es por ciento menos de lm sorpía comprar la RAM 1500 long star 2013 equipada con motor V6. No compatible con ofertas de arriendo ni otras ofertas de incentivo al consumidor, consulta la agencia para detalles, domen trega minorista para el 5 de julio del 23. ¡Aficiopoposmacta! office, to your home, and everywhere in between. Need it fast? No problem. Place your order at office Depot.com and pick it up in just 20 minutes at your nearest office Depot or office max store. So Elizabeth was always a full of ideas, and one of her first ideas that she actually really came through with was in 2003 when she filed for a patent on a little patch that you could

put on your skin, which it seems like a great idea. But it was supposed to deliver antibiotics into the body through the skin through a patch, which as much as it sounds like a good idea, it actually isn't currently possible. In March of 2004, she dropped out of Stanford School of Engineering and used her tuition money

to start a consumer health care technology company called Real Time Cures. Elizabeth founded the company to democratize health care. So one thing that's interesting about Elizabeth is from a young, young age. As long as she can remember, she has been terrified of needles. She is very, very creeped out by them and she actually describes having blood taken as torture, which means I've been tortured many times because I have haji modus disease and you have to get your blood drawn all the time.. Doesn't really bother me, but Josh literally will pass

out and hates it, so I understand some people cannot stand it and maybe to you it would seem like torture. So Elizabeth came up with this idea, she was full of them, um, to be able to test someone's blood with only a very, very, very small amount of it, a fraction of what current blood labs use. And it wasn't just to get a little data, it was supposed to get vast amounts of data with just, you know, a tiny drop of blood. So at first, she talked to her professor at Stanford about it, and she tried to tell him about it several times. She even brought in a bunch of his co-workers one time, and after she told them about it, they all told her this is impossible, like this is not going to work.

And of course, she hadn't actually invented this yet. It was just an idea at the time. A ton of other medical professionals actually told her the same thing that this will not work, but Elizabeth refused to take no for an answer. And she ended up being able to convince the dean and advisor at the school of engineering Channing Robertson to back her idea and support her.

So basically they thought that they could take a tiny amount of blood and scan it for a bunch of different things like cancer and it sounds like such a great idea as something that we may be able to have one day. Maybe, I mean I'm not a professional, I don't know if that's possible but I feel like eventually anything's possible maybe. But it would be really nice to be able to just get a drop of blood and find out if you have anything, cancer or any other disease, and it would allow us to prevent a lot of deaths

because they claimed that there's different from traditional blood tests would be able to detect these type of thing way, way in advance. And so she actually created this machine and she ended up naming this machine the Edison, which is really fitting because Thomas Edison was a total fraud. If you don't know that about him, maybe I need to do like an exposed Thomas Edison, but he really was a total fraud. And it's really interesting that she chose that name because he was kind of a fake until you make it type guy too who would come up with things

and really start pushing them before he'd actually invented them. She claimed that this Edison machine could do 200 blood tests in just a few minutes and the little vessel that she used to collect the blood was called a nanotainer. So in 2004, Elizabeth decided to change her company name to Theranos, which is actually a combo of therapy and Diagnosis and Elizabeth rented the basement of a group college house and rented some lab space as well and

Amazingly Elizabeth started getting investors very quickly without actually any proof that this worked the first major investor was Tim Draper and Tim was the father of Elizabeth's childhood friend Jesse Draper who was also a silicone valley venture capitalist and Elizabeth was able to convince Tim that the company was legit and Tim ended up writing Elizabeth a check for 1 million dollars. And according to Tim, Elizabeth also got support from Rupert Murdoch who is a very successful entrepreneur in the media industry, as well as the Walton family. Who are the founders of Walmart and Sam's Club,

and she also got support from the Cox family of Cox Enterprises. One of her first board members was Secretary of State George Schultz, and he ended up getting her 12 big name members on the board, including former Secretary of State and National Security Advisor Henry Kissinger and by December of 2004, Elizabeth had raised $6 million for Theranos. And by the end of 2010, Theranos had $92 million in venture capital. That's pretty interesting how she was able to get so many people on board with something that wasn't even created yet, something that she was not able to even prove worked, and she was able to trick a lot of people into a lot of money. And she was able to keep this a secret that she didn't really actually know what she was doing, and they weren't very successful.

She ran her company in a very unique way. She was always in like stealth mode. She was very, very secretive. Employees were told they couldn't stay certain things. And she claimed that this was so no other companies would be able to get any ideas. But investors found that really frustrating, obviously. In September of 2013, the company announced that they were going to have a partnership with Walgreens to launch these like in-store blood sample collection centers. Mom, we really are an important part of our family because we really love you so much.

Your health is really important to us, the kids adore you. They study. There are no gift cards because nothing is more important than the health of those who love. And in 2014, she appeared on the cover of Forbes, which was a really big deal and ink, which is also a really big deal. Now one thing that you'll notice about her by looking at these pictures is she really likes black turtlenecks. That is one thing that Elizabeth is known for. Her closet only contains black turtlenecks. Now one other person who you might know also has done this was Steve Jobs.

Steve Jobs was known for wearing a black turtleneck every day and he said that this simplified his routine. And Elizabeth claims that she's not copying Steve Jobs at all. She claims that she has been wearing these black turtlenecks for a long time since she was a child. Although there are many, many photos of her in other things that are not blacked her legs. So that's one thing you start to

notice about Elizabeth Holmes is she's like a major Steve Jobs fan. She is clearly inspired by him. A lot of her quotes sound like him, her mannerisms, her style, the way she goes about things, the way she tries to speak. There are so many comparable things, and he was clearly such an icon to her. We're recording this progressive commercial on a real boat to let people know that when you bundle your home boat and other vehicles, what was that flow?

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self-made female billionaire, which is a pretty big deal. So tons of other inspiring female engineers, entrepreneurs, and scientists all really looked up to Elizabeth. At this point, Thernos was valued at 9 billion, worth more than $400 million in venture capital. In the fall of 2014, Elizabeth moved Thernos to the Stanford Research Park, and the Stanford Research Park is in Hills in Silicon Valley. And this is where parts of really big inventions have taken place, such as mainframe computers,

microwaves, and even the International Space Station. This place claims that it is a community of and for the people who seek to invent the future. And many famous inventors such as Elon Musk, Mark Zuckerberg, and even Steve Jobs have spent time conducting research at this facility over the years. One of the most popular topics you will see, people discussing when it comes to Elizabeth Holmes is her voice. We made it possible to eliminate the tubes and tubes of blood that traditionally have to

be drawn from an arm. What do you dream for something in 2025? That less people have to say goodbye too soon, to people they love. That's great. Can you tell us the secret? I don't have many secrets. I'm... I don't have many secrets.

Elizabeth has a very masculine voice and I don't mean to voice shame her in any way, but the reason I bring this up is because many people think that this voice is actually thick. That she does it because it makes her more authoritative and that she commands respect with this voice. I don't know if that's true.

I mean, I can't verify that myself, but there are a lot of professors and ex-friends and people like that who said that her voice was not like that before. By the time the company was moved to the Stanford Research Park, they had hired 800 people and it was valued at almost $10 billion dollars. And by the end of 2014 her name appeared on 18 U.S. patents and 66 foreign patents. During 2015 she made agreements with Cleveland Clinic, Capital Blue Cross, and AmeriHealth Caritas to start using Theranos technology. And in June of 2015 she even partnered with Mexican businessmen Carlos Slim Halu, I probably am saying that wrong, to help improve blood testing in Mexico. And then Elizabeth had a pretty big victory in July of 2015.

Theranos developed this test that was for detecting perps. And this was the first and only Theranos test to be approved by the FDA, so she had quite a big celebration. In 2015, she was appointed as a member of the Harvard Medical School Board of Fellows and was also named one of Time Magazine's most influential people in the world. He was also named Woman of the Year by Glamour Magazine and received honorary doctor of Humane Letters degree

from Pepperdine University after she delivered the commencement speech to the 2015 graduates. And Forbes had listed her at one point as America's richest self-made woman in 2015, with a net worth of 4.5 billion. So things were going pretty good for Elizabeth. She was pretty satisfied with her future,

but in reality, things were not actually going so well. While she had raised a ton of money, I got a ton of investors, and got a ton of press, and was included in all these lists and awards, and you know, she had definitely had her moment of fame. But in reality, her machine actually didn't work, and so it was only a matter of time until the truth came out and her entire bubble burst. A journalist from the Wall Street Journal named John Kerry Roo. Got a tip from a medical expert who thought that the blood testing device seemed suspicious. And because of this, John decided to make a secret investigation, and it lasted

several months, where he spoke to a bunch of ex-employees, and he was able to get a hold of company documents that further strengthened this case. Eventually, Elizabeth actually found out about the investigation, though, and got her lawyers involved who threatened the Wall Street Journal. And they were also threatening a bunch of ex-employees who were spilling the tea to John. By October of 2015, John decided to go ahead and release his article anyway. And this article basically revealed that the blood testing devices at their nose didn't actually work. That people that were getting their blood tested there were actually being tested on traditional machines. And sometimes they were even going in for blood work and they would take way more than they advertised. You know, they said they would only need one drop, but then they'd be

like, well, for your doctor, your doctor wants these like special tests. So we're going to have to do it the traditional way for you, which leaves people like, am I here then and the article also claimed that the tests were just Not even being run on their actual machines that they were running them some of the times just on the traditional machines So it basically exposed Thernos as a giant fraud a machine that wasn't actually working which was the truth this machine was a Mess it did not work. It was too small It was way too much stuff being crammed into a small box. It broke a lot and required people to actually go in and work on the machine, which posed a lot of health and safety threats to the workers because they're

being exposed to tons of random people's blood. We are not there technologically to make that work, and so Thernos would pretty much come up with the wrong data almost all of the time. When you compare LabTest from a traditional lab to Theranos' results, they are vastly different. And there are even cases of people who got testing done at Theranos, thought they were okay, and then ended up getting cancer. So, needless to say, Elizabeth had been exposed. She had been lying her way through from the beginning, and she was a classic example of fake it until you make it.

Another thing that's really weird is that Elizabeth advertised this technology as something that was totally automated and was extremely fast at producing results rather than traditional testing. However, some employees came out and said that there were times where it would take over six hours just to set up the machine before they could even run the patient samples. A lot of employees also said that there

are time working there was just sketched. They had to sign non-disclosure agreements when they started working there, which is kind of strange. And they weren't even allowed to tell their friends or family what they were doing at work. They were also forced to sign paperwork that said they wouldn't talk badly publicly about the company. And not only that, but each employee would be liable for anything bad that was said about the company. Everyone in the building had a key card that they had to scan as they went into each different area of the building. So sunny and Elizabeth were able to watch where everyone was at all times.

They even tracked all of the emails that were being sent between their employees. She then appeared on the show Mad Money with Jim Kramer and basically said that everything that the article published was fake. Lately, one of the most exciting, privately held companies in Silicon Valley has come under fire. This home is welcome back to Mad Money. It's great to be here.

Thank you. Getting this kind of attention and scrutiny. What do you think's going on here? This is what happens when you work to change things. And first they think you're crazy, then they fight you, and then all of a sudden you change the world. In January of 2016, the Centers for Medicare and Medicaid Services did an inspection

of Thernos Network, California Lab, and they apparently discovered that there were irregularities with staff proficiency, procedures, and equipment. CMS ended up sending out a warning letter to Thernos because of what the inspection results showed. In February of 2016, Thernos announced that they would allow the Cleveland Clinic to complete a study on its technology on whether or not the results were even valid. In March of 2016, a study appeared in the Journal of Clinical Investigation and it was stated that the company's blood test results were flagged outside of their normal range.

1.6 times more often than other testing services. And in March of 2016, CMS proposed that Elizabeth face a two-year ban from owning or operating a lab because the company had not fixed the problems in its California lab. And as soon as the heat started, the study ended up bailing on Theranos and he and Elizabeth ended their relationship. She claims that she just fired him. On the today's show, Elizabeth said that she was devastated that they did not catch and fix these issues faster, and that the lab would be rebuilt. And in June of 2016, Forbes released an article that claims that the value of the company had actually dropped from 10 billion to just

800 million a few months later in July of 2016 CMS went ahead and banned Elizabeth from owning operating or directing blood testing services for a period of two years And the company appealed the decision to the US Department of Health and Human Services appeals board And it didn't take long before Walgreens actually ended their relationship with Thernos as well, and closed all their in-store blood collection centers. So at this point Thernos was pretty desperate and trying to save their ass anyway that they could. So in August of 2016, the company introduced a new robotic capillary blood testing machine called the MiniLab. But just like her

other ideas, there was no proof that this invention actually worked. You can have good ideas all day. In 2017, they were actually sued by the state of Arizona for conducting false labs because they had sold over 1.5 million blood tests to Arizona citizens. So by 2018, the company had pretty much tanked. They had to fire a bunch of employees. They were under a ton of investigation. They had lawsuits at their door. They were just completely going under fast.

They were down to two dozen employees who were later fired by the end of the year. And on June 15th of 2018, a federal grand jury indicted Elizabeth and Sonny on nine counts of wire fraud and two counts of conspiracy to commit wire fraud. And after the indictment was issued, Elizabeth stepped down as the CEO of Thernos, but remained the chair of the board. And on September 4th, they made the announcement that they were going to completely shut down. And the Wall Street Journal has now reported that the company is literally worthless. So talk about a change of events. She went from being one of the most successful women in the world to one of the biggest frauds and failures of all time. As of January of 2019, the Justice Department

is reviewing nearly 17 million pages of documents concerning this case. And based on what they find, more charges could potentially be brought against them. Sonny and Elizabeth say that they are not guilty, but they are facing up to 20 years in prison. Although Elizabeth is acting like everything's fine. She's actually currently engaged to this guy named William Billy Evans, who is a 27-year-old inheritor to the Evans Hotel Group, and they live in a luxury apartment

in San Francisco. Her whereabouts have been a mystery until now. Hi Elizabeth, I'm Lisa Guerrero with Inside Edition. We'd like to know if you had an opportunity to watch the documentary about you. Elizabeth, a lot of young women looked up to you, especially in tech. What would you have to say to those young women? Do you have any comment at all to the investors that say they lost millions of dollars because of you? A lot of people think it was heartless that you were partying at Burning Man when your company was closing its doors. Can you set the record straight? Is your voice real or is it fake? With the amount of lying that she did, it is truly incredible

that she got as far as she did. It's honestly impressive and she was very, very smart. But Elizabeth seemed to care more about the image and the money than she really cared about actually making sure anything worked. One of her employees even said that at one point she was more concerned about naming the cloud that the Edison would send the data to than actually making sure the Edison actually even worked. She was definitely more concerned with the marketing and the overall style of everything and how she ran her brand and that's what it really all was about for her. And I think it was really about money. From a young age, she wanted money and I think she wanted to change the world,

but Giazal wanted money. And I think if you create something that changes the world, you're naturally going to get a lot of money. So it's hard to say what her true intentions were. People have varying opinions on how guilty they think Elizabeth actually is. Was she knowingly lying the whole time? Or is she almost a sociopath in the fact that she will lie

and not even realize she's lying and convinced herself that these things are true? That she's in such denial. Maybe at one point, she really thought it was going to work and then it didn't. But one thing's for sure is Elizabeth definitely knew that things weren't working for a long time. And she went on to take people's money and to keep online and to soak up all these interviews and the limelight and yet none of her ideas actually worked. I hope one

day that they do create something like this, it would be pretty nice to go in for a finger prick and find out if there's anything seriously wrong with you or if you're in the early stages of a disease. I think that's pretty amazing. And I have faith that one day humanity will be able to create this, but Elizabeth definitely was not the one to do it. It'll be interesting to see if she actually goes to jail. She does have wealth and privilege on her side. She's very buddy-buddy with the Obama administration, not that they're still in power or anything. But I feel like she has a lot of people that are higher up, like a lot of elites. That can help her pull strings and she's obviously able to hire a really good defense team, so it'll be interesting to see how this one shakes out, but I really hope the law comes down in her

heart because I find her to just be such a fraud, and it's such a bad example of a successful woman, to be completely built as an idea, to almost be an invention herself. All she really cared about was her image and how successful she was looking and if she was doing it just like Steve Jobs was without actually saying that. That is gonna be it for me today guys.

Thank you for joining me for another episode and make sure you follow the show on Spotify and Apple Podcasts. It really does help me out. If you want to watch the video version of this show, you can find it on my YouTube channel, which will be linked, or you can just search Kendall Ray. I will be back with another episode soon, but until then, stay safe out there. Hi, I'm Allie Raysman. I've been living with my grain for a while. As an athlete and gymnast, I was taught to just power through the pain. Now I use Ubrelvy or Ubrelja

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