Updated: Two Theranos Documentaries Unveiled This Week as Attorneys Wrangle Over Criminal Charges

Updated 1/24/19 10:00 AM

Elizabeth Holmes headshot

Elizabeth Holmes, founder and CEO of Theranos. Source: Krista Kennell / Shutterstock.com

The story of Elizabeth Holmes and her failed biotech Theranos has become something of a cautionary tale for entrepreneurs. Holmes has been charged with massive fraud for her role in securing hundreds of millions of dollars from investors through lies and deceit about the company’s products.

But even as Holmes and her former partner Ramesh "Sunny" Balwani, who served as company president and chief operating officer, face potential prison sentences of more than a decade for fraud, their stories have become the subject of Hollywood. Hollywood star Jennifer Lawrence signed on to play Holmes in a big-screen adaptation of “Bad Blood,” the book by The Wall Street Journal’s Pulitzer Prize-winning investigative journalist John Carreyrou. Additionally, two documentaries are planned that will tell the story of Holmes and her Svengali-like ability to raise money from investors and curry favor with powerful political leaders, such as former Secretary of Defense Gen. James Mattis and former Secretary of State George Schultz, both of whom served on the company’s board of directors.

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This week at the annual Sundance Film Festival, documentarian Alex Gibney will unveil “The Inventor: Out For Blood In Silicon Valley,” a story that looks at the rise and fall of Holmes and Theranos. Gibney, who won an Academy Award in 2008 for his documentary “Taxi to the Dark Side,” teamed up with HBO Documentary Films to tell the story of Theranos. Last year, Gibney said the documentary will include “never-before-seen footage of key company insiders” to tell the story of Theranos. In an interview with the Associated Press last year, Gibney said it will examine how the company flourished and the “psychology of deception.”

Also this week, ABC News will unveil its documentary on Holmes called “The Dropout.” ABC will air a preview of the documentary on Jan. 23 on ABC’s “Nightline.” According to Reuters, “The Dropout” will include an interview with Balwani’s attorney, along with “never-before-aired deposition tapes of Balwani, Holmes, three former members of the Theranos board, and others.” After charges were filed against Balwani last year, his attorney Jeffrey Coopersmith told BioSpace that his client was innocent of the charges and that he did not defraud customers or investors.

Elizabeth Holmes responds to questions regarding claims she made about her now defunct biotech start-up's blood-testing device, which had attracted high-ranking former military and political investors. Source: ABC News 

Both Holmes and Balwani have pled not guilty to the criminal charges filed against them. The criminal fraud charges allege the two engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients. According to the indictment, Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, despite the fact that Holmes and Balwani knew the company’s proprietary device was “not capable of consistently producing accurate and reliable results for certain blood tests,” the government said.

While Holmes has pled not guilty to the criminal charges, last year, after the U.S. Securities and Exchange Commission brought charges against the duo, she agreed to pay a $500,000 fine.

The criminal case has not yet gone to trial. That may take a while, as Law360 reported the U.S. Department of Justice and the former Theranos executives “have been bogged down in a prodigious discovery battle involving access to roughly 17 million pages of documents.”

In addition to the criminal charges against Balwani and Holmes, a class action lawsuit against Theranos could be going forward in Arizona. The proposed lawsuit is not only aimed at Theranos, but also its former partner Walgreens, which had a deal with the company. That potential lawsuit though has been affected by the fact that Theranos has shut down and has no funds, Law360 reported.

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