Theranos founder Elizabeth Holmes and former Theranos president Sunny Balwani have been charged with wire fraud.
On Friday, the Department of Justice charged the two with nine counts of wire fraud and two counts of conspiracy to commit wire fraud, stemming from allegations that the two engaged in a scheme to defraud investors and a separate scheme to defraud doctors and patients while at the blood-testing company.
The DOJ said Friday that Holmes and Balwani could face up to 20 years in prison, and a $250,000 fine plus restitution for each count on which they’re convicted. That means a maximum fine of about $2.75 million for each of them, should they be convicted on all counts.
Theranos initially came under fire in 2015 over the accuracy of its blood tests. At one point, it was valued at $9 billion, but in recent months it has laid off most of its employees and is pleading with investors for more cash as it faces setbacks in the lab on its Zika test. In March, the SEC charged Holmes and Theranos with “massive fraud.” The company and Theranos settled with the SEC, and as part of the settlement, Holmes paid a fine and cannot be a director or officer of a publicly traded company for 10 years.
Holmes stepped down as CEO of Theranos on Friday, though she remains chair of the board.
Balwani, who employees saw as an “enforcer,” left the company in May 2016 after working there for seven years. He has also been charged with “massive fraud” by the Securities and Exchange Commission.
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