The downfall of Elizabeth Holmes: Is the young billionaire going to jail? | 60 Minutes Australia

the promise was a healthcare revolution the reality was a bloody lie when elizabeth holmes claimed she'd invented a device that with a pin prick of blood could diagnose hundreds of medical conditions she became the darling of silicon valley holmes along with her business partner and ex-lover sonny balwani then set about duping investors to bankroll their multi-billion dollar company theranos but what the couple didn't count on was the courage of two of their own staff who knew the blood machine didn't work and knew they had to tell the world now holmes and balwani have been found guilty of fraud and could face decades in jail you have anything you want to say it may well be one of the biggest medical swindles in history and elizabeth holmes may be one of the biggest fraudsters of our time do you have any reaction to your guilty verdict it's an extraordinary reckoning for the former darling of silicon valley who unashamedly modeled herself on apple's steve jobs i'd like to welcome elizabeth holmes the real treat the incredible elizabeth holmes holmes is now facing jail but at her height her swagger was unassailable her self-belief bought by everyone there are people in this world who revolutionize our lives coco chanel steve jobs bill gates walt disney and elizabeth holmes mark my words and in ramesh sunny balwani her then secret lover and business partner she had a trusty lieutenant together they turned their medical startup theranos into a 9 billion juggernaut promising the holy grail of healthcare non-invasive cheaper faster and more reliable blood tests theranose means being able to see the onset of disease in time to be able to do something about it so you could do this in helicopters and battlefields in patients homes and doctors offices it just sounded like this technology had no limits and i found elizabeth to be extremely charismatic and i so i knew that this was something that i had to be a part of science graduates tyler schultz and erica chung were two young guns elizabeth and sunny hired the pair joined theranos believing they would be part of a healthcare revolution it's a bit of a heartbreaking tale right because there was so much potential there was so many possibilities of what could have come out of this very quickly erica and tyler were given access to the inner sanctum of theranos and its secret weapon a mini lab known as the edison a miniaturized testing device that holmes created and claimed could diagnose up to 200 diseases from a single fingerprick but no matter how many tests they ran the machine failed to deliver reliable results inconceivably that did not stop elizabeth holmes from spreading it to the world people don't even know that they have a basic human right to be able to get access to information about themselves and their own bodies that can change their lives do you think there's any doubt that elizabeth knew her edison contraption was a failure or was she just you know faking it until she made it there's no doubt that she knew like she supposedly invented the thing right and then i was fresh out of college my first job day one working with it it was obvious that it didn't work it there's no possible way she didn't know absolutely not [Music] what appalled the young scientists was the decision by elizabeth holmes and sunny balwani to roll out the machine to be used on real people with real diseases knowing the test results could not be trusted that galvanized this remarkable pair into a dangerous course of action that would shape their lives for the next 10 years they risked everything to become whistleblowers to expose the extraordinary and shameless lies putting patients in jeopardy we can't stand for this we can't stand for letting people treat people this way um and and just get away with it with no consequence was the patient side that drove you to become a whistleblower wasn't it yes yes it was really to say we can't be using this faulty technology on patients like this is this is wrong these are tests that have huge impacts on people's lives and the way they behave it's not like a vitamin d test or something you know we're talking about infectious diseases of course tyler never considered one day he would blow the whistle on elizabeth holmes when he was first introduced to her in 2011. his formidable grandfather george schultz the former u.s secretary of state who served under three presidents wanted him to meet elizabeth whom he considered brilliant we think that there's going to be a revolution in preventive medicine unaware she was peddling a fantasy the then 91 year old george schultz had just accepted holmes's invitation to join the theranos board i don't think he had a reason to not believe elizabeth he didn't have the skill set to really question her by getting him on board she was able to essentially use his network to assemble an extremely powerful board of directors i mean you believed her so it's not a stretch is it to think that your grandfather and people of his uh vintage and level of understanding believed her yeah that's exactly right and i'm sure it also didn't hurt that she was young thin blonde blue-eyed um i think she was able to woo a lot of older men just by uh yeah i don't know just by kind of showing them some affection it sounds a bit icky really it is i i can understand why your grandfather fell victim to to elizabeth holmes but what did she want from him so i think one of the biggest things he got out of him was transfer of credibility people believed what he had to say and she needed that it certainly helped her raise nearly a billion dollars from high-flying investors like rupert murdoch who like so many trusted elizabeth at face value elizabeth was a goddess people worshipped the ground she walked on but like the wizard of oz behind the curtain nothing was quite as it seemed and then you go and you talk to the scientist and she's a total joke you cross the threshold from the carpeted world into the tiled world and all of a sudden it's just like nothing works we're on a sinking ship and we cannot bail out water fast enough the toughest part is trusting yourself enough to realize and recognize that the truth will prevail one way or another both erica and tyler initially took their concerns about false test results to the top but elizabeth holmes and sunny balwani's response was to attack they basically called me arrogant ignorant patronizing reckless they said i had no understanding of math science or statistics they attacked me personally and i felt like you know what more could i do this is not somewhere that where i can work and make a difference speaking up is easy but having to deal with the doubt of other people having to deal with the retaliation having to deal with the rejection all of these factors make it very very challenging and very difficult to just do something so simple of saying hey i don't think this looks right or hey we shouldn't be doing this tyler experienced that in the most personal way when trying to warn his grandfather of the deceit george schultz instead sided with elizabeth holmes i basically said you can be the board member who says elizabeth does not have my complete support you can be the board member that says elizabeth lied to me she lied to patients she lied to doctors she lied to investors what was it like to be in that position where your grandfather chose to believe elizabeth over you i was devastated and i told him i said you're choosing a criminal over your own family it's still not easy to get those words out and it wasn't easy for me to tell him that but that's what he was doing [Music] in direct contrast to his grandfather tyler and erica felt they needed to do more but it wasn't until they spoke to investigative journalist john kariu from the wall street journal in 2015 that the extraordinary fraud was exposed they couldn't in good conscience continue to not say anything they felt the need to speak up and they felt that lives were in danger and that the longer this went on the worse it would get when i spoke to the wall street journal reporter i bought her burner phone with cash because i thought that that would guarantee no one would ever ever be able to discover that i was a source and man was i wrong um they they told me they figured me out in about five minutes it was that obvious for all your cloak and dagger i mean you must have felt like the criminal buying a burner phone i did i did feel like the criminal buying a burner phone but that was nothing compared to the betrayal tyler felt when he discovered his grandfather had tipped off theranos lawyers to a visit tyler had planned with him it marked the start of a campaign by the company of intense bullying and intimidation following suspicions tyler had spilled the beans on the theranos sham and to my surprise there were actually two lawyers in her in his house that he did not tell me about and they basically ambushed me and um that kind of started this this horrible period in my life where it felt like within two to three days i was going to be in a courtroom getting sued by a nine billion dollar company and i ended up spending around five hundred thousand dollars in legal fees to protect myself so five hundred thousand dollars in legal fees just for trying to do the right thing yeah it was worth it i guess that's what i tell myself both you and tyler for all of your being mild-mannered scientists i think you're made of steel yeah you had to be so strong yeah it definitely takes a lot of strength to do something like this like whistle blowing should really be a last resort but it looked like it would all come to nothing when a shock development late last year threatened to derail the entire case from what you witnessed from what you observed do you believe that sonny barwani was the puppeteer for the first time in a long time erica chung has her life back for the past 10 years she has been a critical player in the biggest scandal to rock california's silicon valley the spectacular fall of theranos the 9 billion startup company that promised to revolutionize healthcare as a theranos scientist turned whistleblower erica took the stand in march to testify against her former boss ramesh sunny balwani following her testimony against ceo elizabeth holmes late last year what was it like to be in the courtroom with elizabeth holmes there i think going in i i was scared because i didn't know how i was going to react and now i had to basically do my duty which was to give a voice particularly to a lot of people who were voiceless in this circumstance specifically the patients and to to tell the truth and answer the questions alongside erica fellow whistleblower tyler schultz was driven to speak out against the company because investors and patients were being lied to about a miracle mini lab which promised to run hundreds of blood tests from just one drop of blood he witnessed it fail over and over it just fell short of elizabeth's pitch in every conceivable way and then it wasn't even accurate it didn't even work the greatest fear for tyler and erica was that patients lives were being put at risk something erica wanted to make clear at trial it was an immense amount of pressure and uh stress that kind of came with it but once the actual trial happened and i was on the stand it was nice because i realized well when you tell the truth from the onset you just have to keep doing that and answer the questions to your guilty verdicts here in january the verdict came down against elizabeth holmes while she was acquitted of defrauding patients holmes was found guilty of fraud against investors she'll be sentenced in october just over a week ago in a separate trial former business partner and ex-boyfriend sunny balwani was confirmed as holmes partner in crime found guilty on all 12 charges of defrauding both investors and patients he'll be sentenced in november do you think she should dirty job i think at this point yes i i think that she should face some sort of time considering all the damage caused do you hold him equally responsible yes and jail time too yeah yeah i think they were both equally uh culpable in the circumstance [Music] but a curveball at elizabeth's trial late last year threatened to derail the entire case she accused her ex-lover sonny balwani of coercive control and sexual abuse claiming that made her subservient and affected her business judgment from what you witnessed from what you observed do you believe that sonny barwani was the puppeteer from what i witnessed in my own personal opinion no no i think they both were definitely the key decision makers in that company and definitely held a lot of power but i don't think that he was the puppeteer what do you make of those claims that she made against sonny i mean it's like i like i don't hold sonny in high regard obviously [Music] um so i believe that he's probably capable of those types of things at the same time elizabeth is a pathological liar so i have no i have no way of knowing i have no way of knowing if it is the case does it absolve her of her responsibility and how she acted during those theranos years i don't think so the people that knew elizabeth back in you know 2013 14 15 know that she was she was in control every room she walked into she had control of that room if she needed something she got it tyler's grandfather theranos board member george schultz died aged 100 in february last year while he finally conceded tyler was right to blow the whistle on elizabeth holmes he could never bring himself to apologize for putting the con woman ahead of his grandson did you ever repair your relationship with your grandfather it was repaired to some extent but i think the damage was is definitely there i was telling him my concerns in like 2014 i spoke to the wall street journal in 2015 i went on the record in 2016. and it wasn't until 2018 that he finally said you know maybe this woman's been lying to me and tyler was right could you tell us more about both of your roles at terenos what did your work entail to expose the theronos sham came at a huge cost to both tyler and erica but inherently honest and clearly courageous these friends really had no choice but to do the right thing they were by far the worst years of my life and it's consumed pretty much my entire adult life i first met elizabeth when i was 20 years old and i'm 31 now at this point i'm really just trying to take the the worst years of my life and i'm trying to turn them into a positive so now as you reflect on it any regrets about being a whistleblower oh no regrets at all no regrets at all um absolutely none uh yeah if i mean i wish it didn't work out this way but that's not what happened and i would do it all over again i would definitely blow this all over again hello i'm tara brown thanks for watching 60 minutes australia subscribe to our channel now for brand new stories and exclusive clips every week and don't miss out on our extra minutes segments and full episodes of 60 minutes on nine now dot com dot a u and the nine now app

Channel: 60 Minutes Australia

Views: 1,478,162

Keywords: 60 Minutes, 60 Minutes Australia, Liz Hayes, Tara Brown, Liam Bartlett, Tom Steinfort, Sarah Abo, karl stefanovic, 60Mins, #60Mins, theranos, elizabeth holmes, ramesh balwani, the dropout, amanda seyfried, erika cheung, tyler shultz, george shultz, fraud, scam, edison, blood, science, medicine, true crime, billionaire, entrepreneur, steve jobs

Id: 4pTzZbaObSU

Length: 19min 0sec (1140 seconds)

Published: Sun Jul 17 2022

Reddit Comments

[u/VirtualMoneyLover]

Wrong title. She is not young and not a billionaire. But yes she does go to prison.

[u/CourageMesAmies]

Yet another reminder what a piece of 💩 George Schultz was.

[u/overdownyonder]

I hope she gets locked up.

[u/poisonfield67]

So confused why it says the uploader has not made this video available in your country... when it's 60 minutes Australia... and I'm in Australia

[u/Myst_of_Man22]

Correct not Young, and not the billionaire anymore. She's not going to like being strip searched and wearing a jumpsuit.

[u/Myst_of_Man22]

She will boo hoo cry when they put the bracelets on her.