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00:00:00
>> Elizabeth Holmes, the founder of the embattled blood-testing company Theranos, and once a rising star, now indicted on criminal charges of allegedly defrauding investors, doctors, and patients. The US Justice Department, in an indictment Friday, claimed that 34-year-old Holmes and the company's former president had encouraged doctors and patients to use its supposedly revolutionary blood testing service despite knowing that it did not consistently produce accurate results.
00:00:35
Prosecutors said both entered pleas of not guilty on charges that include several counts of wire fraud. If convicted they could face prison sentences that would keep them behind bars for life and total fines of over $2.7 million each. Shortly before the indictment, Holmes announced she was stepping down as CEO of the privately held company, but would remain Chair of the company's board.
00:01:02
Holmes, a Stanford University drop out, started Theranos in Palo Alto, California at the age of 19. And was celebrated in Silicon Valley. But in 2015, The Wall Street Journal reported that Theranos' devices were flawed and inaccurate setting off a downward spiral for the company which had reached a $9 billion evaluation based on its promise to disrupt the lab testing business.
00:01:30
It has also backed big investors like Walgreens, media mogul Rupert Murdoch, and Oracle co-founder Larry Ellison.