"Bad blood", or How Elizabeth Holmes swindled the whole world around her finger
Categories: North America | Science | SocietyBy Pictolic https://pictolic.com/article/bad-blood-or-how-elizabeth-holmes-swindled-the-whole-world-around-her-finger
American Elizabeth Holmes, the founder of the startup "Teranos", was called "Steve Jobs in a skirt." Her fortune in 2014 was estimated at $ 4.5 billion and was growing rapidly. This woman's business was predicted to have a multibillion-dollar market, as well as millions of lives saved. But it was over quickly. The exposure of the Holmes scam was a real shock, because no one could even imagine such a cynical and primitive deception.
The world learned about the grandiose scam of Elizabeth Holmes thanks to journalist John Carreira. He conducted an independent investigation and told about how the "blood business" appeared. About his investigation, Carreiro wrote the book "Bad Blood", which became a bestseller. So how did a girl who didn't even graduate from university become one of the business icons of the planet?
The company "Theranos" (Theranos) has not made any breakthrough in medicine, but simply wishful thinking and manipulated the facts. Not only patients were deceived, but also investors and partners, of whom there were many. Of course, one Holmes, an underachiever who dropped out of Stanford at the age of 19, would not be able to pull off such a large-scale case. She gathered a team of real professionals who had great authority in the world of technology.
The team of top managers of Teranos was impeccable. The commercial director of the company, Diana Parks, has worked for more than 25 years in the largest pharmaceutical companies in the world. Vice President John Howard once ran a subsidiary of Panasonic. The head of the bioinformatics department, Tom Kemp, moved to Teranos from IBM, where he held the position of a top manager. CFO Henry Mosley previously worked at Intel.
All these people provided Elizabeth Holmes, who had no merit, with an iron reputation. One of the key roles in the success of the case was played by Henry Mosley. He created financial forecasts for investors that showed the incredible rise of a startup. He didn't know anything about technology himself, but he understood that his figures were significantly overstated. But the CFO relied on Holmes, who simply glowed with confidence.
Investors who came to Mosley were immediately taken to the laboratory to the doctor of chemical engineering, Shanuk Roy. This man, being the co-founder of Teranos, owned the issue like a god. He showed the guests the fantastic invention of the company, and the last doubts disappeared. But it's time to tell about the device that made Elizabeth Holmes and her partners billionaires.
Dr. Shanuk Roy, in the presence of investors, pierced his finger with a needle and placed a drop of blood in a cartridge made of white plastic, the size of a credit card. He inserted the cartridge into the reader, a small device similar to a toaster. A minute later, the data from the reader about the composition of the blood was transmitted to the server, which soon gave out a detailed biochemical analysis. That is how it looked with the doctor's explanations.
Only Shanuk Roy himself knew what was really going on in the equipment. The device that analyzes blood quickly and accurately was called "Teranos 1.0" and made a constant impression. Money flowed into the company like a river, and Henry Mosley made increasingly bold predictions. But one day the CFO came down from heaven to earth.
At one of the meetings in a narrow circle of top managers, Dr. Roy reported the most unpleasant news. It turns out that the miracle device worked unpredictably and in most cases, instead of the result, it produced a set of random data. Therefore, the doctor always loaded the necessary indicators into his memory before visiting guests. In simple words, "Teranos 1.0", in which millions were invested, did not work.
After that, it became much more difficult for Mosley to make optimistic charts. Then there was a failure with the manipulation of the results at the presentation in Switzerland, because of which the forgery was almost exposed. After that, the CFO refused to deceive investors and was immediately fired. There was no special need for it anymore — they believed in Teranos and there were plenty of people willing to invest money in a startup. Among those who brought money to the company was even ex-US Secretary of Defense James Mattis!
But the deception can't go on forever. In 2013, the company's chief biochemist, who had worked with Holmes for 8 years, committed suicide. Before that, he was depressed for a long time and complained to his wife that his device was not working. And in 2015, several independent laboratories checked the results of the Teranos device and the deception was revealed.
The regulators of Medicare and Medicaid published a 121-page report, which revealed the whole background of the cunning startup. According to acceptable standards, the blood parameters obtained by the Teranos device should not differ from those issued by the laboratory by more than 20 percent.
But everything was much worse and the "margin of error" was sometimes 146 percent! This means that the device could show a healthy person that he is sick, and vice versa. And it also turned out that most of the results of the blood test were obtained at all on Siemens equipment. In January 2016, the U.S. Attorney's Office launched an investigation into the case of Elizabeth Holmes.
On March 14, 2018, the company and Elizabeth Holmes herself were charged with massive fraud. On August 31, 2018, Theranos ceased to exist and undertook to return the money to investors and compensate the victims of fake blood tests.
Elizabeth Holmes herself is still being tried. According to the latest information from the courtroom in San Jose, California, a 37-year-old fraudster faces up to 20 years in prison. But the lawyers of "Steve Jobs in a skirt" are sure that the term will be much shorter. By the way, neither Holmes nor her companions wanted to admit their guilt.
About the history of Theranos and its founder, who led the whole world by the nose for many years, recently filmed the series "The Dropout" (The Dropout). Have you noticed that suspiciously many good films are being made about scammers?
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