SAN JOSE, Calif. — With sentencing approaching for two people involved in a blood-testing company that once enthralled Silicon Valley, the U.S. Government is looking to hear from those who fell for the massive fraud.
On Thursday, the United States Attorney’s Office for the Northern District of California and law enforcement agencies issued a call for information. In the call, they are looking to hear from victims of frauds perpetrated by Elizabeth Holmes and Ramesh Balwani.
In January, Holmes was found guilty of conspiracy to commit wire fraud and three counts of wire fraud. In July, Balwani was found guilty of two counts of conspiracy to commit wire fraud and ten counts of wire fraud.
The convictions come after the two were involved in Theranos. A court document in the case says the company claimed to be able to use just a few drops of blood for a full range of clinical tests faster and more accurately than conventional methods.
The claims led to a partnership with Walgreens to set up wellness centers for people to get tests. Instead of using their technology, the document said the company used third-party, commercially-available analyzers to test patients’ samples.
The fraud was discovered in late 2015 when a series of articles in The Wall Street Journal exposed rampant problems with Theranos’ technology, the Associated Press reports.
The Associated Press also reports the dual convictions represent a victory for federal prosecutors, who seized on the case as a rare opportunity to hold ambitious entrepreneurs accountable for engaging in technological hyperbole while pursuing fame and fortune. In the process, they hoped to discourage the practice of making bold and unproven promises about still-nascent products — a startup strategy known as “fake it until you make it.”
The United States Attorney’s Office for the Northern District of California and investigating agencies are seeking information from those who may be victims of the duo’s crimes. They are asking people to fill out a questionnaire to provide the court with information necessary for sentencing.
Holmes and Balwani face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution, for each count of conviction.