Theranos: The Frye Festival of Biotech

'The Inventor' Elizabeth Holmes in Theranos lab. PHOTO: Pop Sugar

By now, most people probably have at least some inkling of the story of Elizabeth Holmes (b. 1984), the founder and CEO of Theranos. A jury found her guilty on various counts of fraud and criminal conspiracy.

Her now-defunct $9 billion company was supposed to improve blood tests by making them more affordable, less invasive, quick and convenient. The claim was that a finger prick of blood run through a compact blood analyzing device called the Edison could deliver a wide range of blood tests. The Edison was kept out of sight, even among employees and never made progress. Tests were done instead on everyday technology already available.

Investors included heavyweights like Oracle’s Larry Ellison ($100 million), media mogul Rupert Murdoch ($125 million), Walgreens and a number of well-known venture capital and private equity firms. Unlike most sistema grifts, this one has gotten plenty of media exposure, and we submit that it’s because those heavyweights lost heavily on their investment.

The following “60 Minutes Australia” video from August 2021 offers the basic backstory.

Elizabeth Holmes exposed: the $9 billion medical ‘miracle’ that never existed | 60 Minutes Australia

Holmes, much like Fyre Festival founder Billy McFarland (b. 1991), spent an enormous amount of time and focus on promoting her concept and raising funds ($1.3 billion) but had no real idea how to deliver. Over time, both the magical thinkers Holmes and McFarland appeared to become increasingly drunk on media- and celebrity-hyped recognition, lauding them for successes they had not yet achieved.

Rather than admit they were in over heads, they chose to fake it and hoped they’d make it. But they never did.

When exposed, rather than return remaining funds to investors, Theranos stubbornly lawyered up and squandered the rest of their ill-gotten largesse playing dirty pool and delaying the inevitable.

The revelation that these Millennial emperors “wore no clothes” was not the direct result of criminal investigations or crack reporters. In McFarland’s case, the discovery was made when festivalgoers arrived on island for event that would never take place. For Holmes, the reckoning was the result of a handful of whistleblowers both inside and outside the company. Ultimately, Wall Street Journal reporter John Carryrou broke the story. Ironically, WSJ is Murdoch’s paper.

Read “The Fyre Magical Thinking Music Festival Grift”

Holmes affected a ridiculously deep baritone voice, especially when she was making her pitch (see video below). She would sometimes briefly switch back to her normal voice. In her business style, she mimicked her idol Steven Jobs by wearing his trademark black turtleneck. Her seductive pitch was steeped in neuro-linguistic programming, New Age happy talk and wide blue eyes.

Elizabeth Holmes Fake Deep Voice? | Real Voice Comparison

The marks wanted to celebrate a brilliant female innovator in an age of female empowerment. The term “brilliant” was liberally applied to this con woman, including by Bill Clinton. Forbes magazine in 2015 named Holmes the youngest and wealthiest self-made female billionaire in America.

With the financial mania advanced by several levels since 2015 one can only imagine how many and how large such “genius” grifts are today.

The company was totally built around yes men, pajama people, hyper-positivity and fantasy (aka cartoon world). Anybody inside the company seeking corrective measures or who tried to shed sunlight on Theranos was quickly read the riot act and fired — sometimes even threatened. As the luster wore off, Holmes’ company — much like McFarland’s — was gutted of its key employees. Employees today talk about that turnover process taking around six to nine months after employment.

A main focus of Winter Watch are the methods sociopaths and criminals use to run rings around the public at large. As such, we were most interested in the testimonies of two Theranos whistleblowers. One is Tyler Shultz, the grandson of former U.S. Secretary of State George Schultz. George was on Theranos’ board of directors and a financial backer. Apparently, Tyler is made of different stuff. Then there is Theranos lab tech Erika Cheung, shown in the video below.

The video should start at the most pertinent part of their Stanford presentation [00:09:14]. Watch for about 10 minutes, but be sure to catch the part where they speak about company’s culture. It seems that when Tyler Schultz was alerted to fraud in the assay results, he naively felt he and Cheung could turn to his grandfather, George. Instead, company attorneys served him with a cease and desist order.

Employees apparently had signed a hardened non-disclosure agreement, which meant to shut down any reporting of fraud and criminal conduct even internally. Ultimately, Tyler ran up a $400,000 legal bill. He says in hindsight he wouldn’t have gone the whistleblower route given that the fall of this company was merely a matter of time.

Theranos ran a fear regime against employees and monitored, spied on and fired non-pajama people. There were strict warnings against office gossip. Performance was measured by blind compliance. Those who didn’t question and rubber stamped fictitious outcomes pleased top management. Truthful outcomes were penalized. Many employees were foreigners who were dependent on work visas to stay in the U.S. The workforce was largely reduced to nothing but the compliant.

The whistleblowers said the employees were siloed (their term for separated) and not allowed to see the other’s work or to compare notes. Schultz said he was in assay validation for three months before even seeing an Edison. It was obvious that the machine was defective, flawed and overhyped. Initially, he approached Holmes, thinking she was a family friend. He was quickly gaslighted, a term both whistleblowers used. Once these whistleblowers left the company, they were tracked by goons and otherwise intimidated.

Spilling the Blood of a Silicon Valley Unicorn

Essential to the grift and large-round capital raises was nailing down a major contract with Walgreens. Theranos was to provide Edison products to Walgreens new blood-testing clinics at their locations — this, despite not having a product. Other investors assumed Walgreen’s had done their due diligence. Walgreens eventually ended their agreement. But they never properly vetted the deal on the front end.

Theranos was scheduled to run demonstrations for pharmaceutical company partners. When their devices didn’t work live, they ran fake demonstrations instead. Requests from a Walgreens due diligence executive to run validation tests on their machines were dismissed. When the exec reported this back at headquarters, senior Walgreens management ignored it.

In January 2016, the Centers for Medicare and Medicaid Services (CMS) sent a warning letter to Theranos after an inspection of its Newark, California laboratory uncovered irregularities with staff proficiency, procedures and equipment.

The key to the Walgreen deal coup, according to the San Francisco Business Times, was when Well Fargo CEO Richard Kovacevich agreed to serve on Theranos’ board after multiple conversations with George Shultz. This was conducted at the private San Francisco-based Bohemian Club at Bohemian Grove, and a meeting with Holmes that was set up by Shultz. Kosacevich had close business and personal ties with Walgreens management and was able to grease the skids.

Kovacevich recalled in a July 2013 email to Holmes a conversation with Shultz at Bohemian Grove in which Shultz said he “wants Wells Fargo to be involved with (Theranos).”

Holmes responded by email nearly three hours later, telling Kovacevich, “I will raise the Wells Fargo relationship with Walgreens CEO and CFO in the context of our discussion with them about partnerships with financial institutions.”

Walgreens had been a customer of Wells Fargo, with the bank handling “a lot of their cash” and payment systems, Kovacevich said in a deposition.

In June 2018, a federal grand jury indicted Holmes and Theranos chief operating officer Ramesh Balwani on a total of 11 counts ranging from wire fraud to conspiracy to commit fraud, with the victims being investors and patients. The trial was postponed until August 2021 due to Covid-19. Balwani’s trial is still pending. Holmes has been convicted on four counts. The 37-year-old now faces up to 20 years in federal prison and undoubtedly millions in restitution and fines. Oh, and she recently married a 29-year-old San Diego hotel heir.

Throughout her trial, Holmes asserted she’s the victim. She claimed Balwani — a dot-com multi-millionaire and 19 years Holmes’ senior — was her secret ex-boyfriend and, though his Svengali-like prowess, controlled and dominated her. In 2010, the two had fired the company’s CFO after discrepancies were raised. Conveniently, Theranos operated without a CFO for seven years, and nobody seemed to care.

Among those who apparently didn’t care was Theranos’ board of directors. They included

  • U.S. General James “Maddog” Mattis
  • U.S. Secretary of State Henry Kissinger
  • U.S. Secretary of State George Schultz
  • U.S. Navy Admiral Gary Roughead
  • Former Wells Fargo CEO Dick Kovacevich
  • U.S. Education Secretary Betsy DeVos
  • U.S. Defense Secretary William Perry
  • U.S. Senator Sam Nunn

Practically none among these cast of characters have financial, medical or R&D backgrounds. So clearly, the goal was not R&D or medicine or building a profitable company with a future. Rather, it was about creating the appearance of credibility and respectability among people with deep pockets. It was about garnering clout and international connections to global markets and military contracts.

You might be rightly wondering how a young 20-something girl with only two months of college could enlist U.S. officials and retired military mucky mucks for a corporate board of a fictitious product. Well, perhaps daddy played a role.

Holmes’ father, Christian Rasmus Holmes IV, was a vice president at Enron — the energy company that committed the biggest fraud in U.S. history prior to banking debacle and housing bust of 2009. Think PG&E in California. You can’t make this stuff up.

Americas financial press heralded Enron as “America’s Most Innovative Company” (Forbes) throughout the 1990s. By 2001, the name of the $100 billion company became synonymous with rampant corporate fraud and unbridled corruption. The implosion of its massive and complex financial schemes led to the enactment of the Sarbanes–Oxley Act of 2002. Enron founder and CEO Kenneth Lay was convicted on 10 counts of fraud and conspiracy, but he died just before sentencing. George H.W. Bush attended his funeral.

Read “Corrupt Enron and the Kyoto Climate Treaty Scam”

Like many other Enron executives, Holmes IV parachuted out of Enron just before the shit hit the fan. He soft landed in executive positions in government such as the United States Agency for International Development (USAID), the Environmental Protection Agency (EPA) and the United States Trade and Development Agency (USTDA). His wife was a foreign response and defense aid for Congress.

If that’s not enough to be considered a member of “The Club,” Holmes IV is a wealthy heir of Jewish decent. His second great-grandfather (Elizabeth’s third great-grandfather) Charles Louis Fleischmann was a Hungarian Jewish immigrant who founded Fleischmann’s Yeast, according to Wikipedia.

33 Comments on Theranos: The Frye Festival of Biotech

  1. WOW, that broad makes my skin crawl! Seems pretty standard libtard, San Francisco start up compan ythat produces nothing but worth billions company to me. The list of board directors is mighty interesting all those turds swimming in the punch bowl. As for the zombies who worked there also standard…they can tell you where they work but have no idea what their company is about. Do you think she will do time or be escorted out the back door since she seems to friends and family in high kosher places? P.S I don’t believe the CEO of Enron died, how convenient, surely he is on a beach somewhere

    • My bet: she will do serious time. She embarrassed numerous top strata Rulers; they will make an example of her. Compare Jon Corzine who stole millions from mostly fly-over country cattlemen; he is now at large in a sort of enforced retirement and apparently complaining that he is no longer invited to A-list summer parties on Martha’s Vineyard.

      Excuse me if this has been mentioned (I looked at only a bit of the long video) – I have understood from two sources that the “device/concept” was, in principle, impossible (period). Blood diagnostics involves inspection of blood gases (not blood solids) and capillary blood (via the “pin prick”) contain almost no blood gases – there’s nothing to test, in sum.

      I have also understood – despite her brief, stellar Stanford career, she was perhaps a marketing genius but a tech dummy; the job of actually inventing the device was delegated to a series of “chief science officers” at least one of whom committed suicide; after which teams of attack lawyers descended on his widow with the typical desist and gag orders.

    • I have a better one befitting this situation, from Fields:

      If you can’t dazzle them with your brilliance, befuddle them with bullshit.

  2. Will they limit the damage so that, yet again, “The big ones get away”? Or will it, possibly, be different this time?

  3. It’s always curious to me all the aryan looking ‘jews’. For a people who supposedly come from a place where everyone is rather olive skinned with dark hair, the Sistema is shot through with people who have a jewish pedigree but look like Scandinavian ski instructors.

    • That’s why they won’t get rid of ALL the Whites. They need some to keep the paperwork moving, the machines running and to invent new gadgets. Some will be kept for rewards and used for breeding offspring.

    • Over 2000 years of selective ongoing miscegenation does wonders to the appearance of the descendants, but at around 50 or 60, they don’t look so Scandinavian anymore. For what it’s worth the accounts of the appearance of the citizens of khazaria are all over the map. Koestler recorded accounts of 2 separate appearing groups in the tribe, both with black hair, but one group very dark and the other fair. Other Arab sources say that they had red or blonde hair. The takeaway here IMO is that they are chameleons to a large extent. Kinda like how David Sassoon kept the appearance of a bagdadi, turban and all… and like his son Abdullah, who moved to England and changed his name to Albert and dressed like an Englishman. I always imagined them as originally looking like genghis khan because they were turcic and asiatic from what I remember reading. Now some online sources are primarily saying just turcic. Funnily enough I had the interesting experience of observing this guy displaying a video game recently called “crusader kings 3”. I’m not into video games one bit but I couldn’t help noticing the map he was displaying that clearly had khazaria on it. The game was pretty detailed, even having the correct rulers for the different nations and their heirs, at least the ones I actually checked. Anyways long story short I asked the guy to highlight khazaria and show me their leader. Now again this is only a video game, albeit remarkably detailed, but their king was depicted to be clearly asiatic. And by clearly I mean so clearly ‘asiatic steppe people’ looking that if I was walking by and looked at the khazar king on the monitor for a few moments, I would have assumed it was a picture of a mongol tribesmen.

  4. I still can’t figure out whether people really are so stupid to invest in this crap or is there a deeper game going on. Why are Generals and Admirals giving money to someone who is obviously running a scam? You don’t think Mattis is smart enough to have a private investigator look into this woman before handing her company a bunch of cash? Or did he just get bad insider trading information from another connected scumbag?

    • Excellent questions – same goes for all of them. Steve Sailor developed the position that EH filled a sort of “daughter-I-wished-I-had-had” need for these old male investors … adopting her almost in an “our Elizabeth” way. And, in general, lots of people were highly invested in finally! having a silicon valley girl-boss – self-made billionaire (that became her lexical tag in the msm). At the end of the day, we all live in cartoon world – and its imperatives are compelling. … one of which is FOMA – fear of missing out … she probably worked that angle.

      Meanwhile, in pretty much the same time frame, the other Valley female CEO – this one a work-up-from-the-ranks (Google) M Mayer – was an embarrassing flop at Yahoo – she actually paid One BILLION dollars to buy Tumblr – essentially a free p0rn portal at that point (she thought she had a Facebook competitor) – she grabbed the golden parachute and Yahoo was sold to Verizon for pennies on the dollar (relative to it’s valuation at her start).

      • She was anointed as her father had proved they can “play” ball with the criminal class. Just like Gates, Musk and most of the corporate/banking oligarchy. You can not expect the banking oligarchy to actually hire strangers to man the ship of their corporate boardrooms. They were gonna ride that “PC female ceo” train till the wheels fell off, fortunately they fell off early. Sailer’s analysis is weak as always and should be considered the same level as Kosher Conservatives like Ben Shapiro, basically MSM level. I’m actually impressed at how naive some of those guys including Ron himself are over at UNZ review. Think they would wake up at some point, goes to show how powerful entertainment/indoctrination is…

        • Thanks – I needed that; I am mostly beyond Sailer at this point however amusing he can be; in this case, I think it’s plausible that Holmes satisfied some emotional needs of some of her investors. UNZ overall is real mix; in that way it is something of a journalistic throw-back.

    • Nicks87- Mattis claims to have lost 85K invested in theranos, but he was likely compensated generously to be a board member. So he likely made money from his dealings with the company, and he’s not that smart or honest of a guy.
      There likely is a “deeper game” being played as you suggest. Perhaps it’s all theater and mattis is tasked with running interference and muddying the waters. I mean do I believe without a doubt that Rupert Murdoch lost $125 million in all this? No I don’t. I’m open to the concept of the nearly total deception these people are engaged in, and I’m also a believer that types like Murdoch are ALWAYS reimbursed with interest for their troubles. I’d also pump the brakes on the idea that Holmes will do serious time for this, what with her family connections, even though this will likely be the official line. Inversion of official msm lines very often brings one closer to the reality in this day and age.

      • Could it be a way to move money (launder) on the down low? Kind of like the “pedo blackmail art” that sells for insane amounts of cash. Like they invest in a company they know will fail but somehow are funneling that money somewhere else? Or they are really just idiot social justice warriors with more money than sense…

        • Agreed about sliding the money. It could have even been as simple as a tax thing. As you know the bastards have smarter bastards watching their $ . if they had a big lets say 3 yr
          Write off that was ending and needed an.appropriate loss, well here you go. But im sure a lot of that invested $ was spent in a way that the lg. Investors reaped some benefit. It’s all kust a giant human centepede. And be happy you aren’t invited. (My opinion)… because that sounds totally gross.Especially with those dusty old fuks.

      • Interesting – as usual, I may be totally missing the “deeper game”; I have seen some thinking that Theranos was a preliminary gambit to the Plandemic by way of acclimatizing the population to frequent and mass med testing and “appropriate” follow up (as Torchy also alludes below). Tho, in the event, no acclimatizing was required. Individuals, families and private party planners all self-imposed mass testing for the holiday season and thereby set up the “million new cases in a day” headline first week of the new year.

        In the last day, “legal experts” seem to be leaning towards a double digit sentence – 10 to 15; white color crime – sums involved are very large, etc; low end estimate are 5 to 8; no one is saying fine only. (Again, I think Corzine is an interesting contrast.)

        There is something “deeply” spooky about those unblinking blue eyes; I can’t even start to get a handle on that; she seems to have entirely re-worked her appearance at trial time; a pregnancy delayed the trail; she now has a 6 mon old boy; some say a very typical stratagem to minimize jail time.

  5. If dealings involving this company were made in part at the Bohemian Grove, that says it all. Those names on the Board of Directors have direct involvement in what is going on today with Covid and the corporate takeover of the world. Not coincidence, Id bet large sums that each of those names are involved and have either underground bunkers or access to one if the Chit hits the fan, and they most certainly haven’t taken the Pfauci jab. Incredible that they got caught, but this is how things really run, scratch my back/your back world of dealings. Great article

  6. Sounds like there is a lot of similarities between Theranos, academia, virology, $cience(tm) and a lot of more.

    Ironic that so many generals served on the board seeing as one of theranos main selling points was for combat casualties.

  7. Awesome article. Interesting Schultz comment at ~33:13 about Henry Kissinger “bringing in this doctor from new york that he said was the smartest man in the world” and who “did his due diligence and said it was all good”, with the “it” he’s referring to being the operations at theranos. I assure you that this anecdote will not be investigated one iota. I’d love to know who that doctor was, although I’m pretty sure I know what holidays he celebrates.

  8. And then there is this:

    IMHO (being descended from Scots-Irish indentured servants, that is), indentured servitude is just another form of slavery!

    “…With a despotic boss like Sunny holding their fates in his hands, it was akin to indentured servitude. Sunny, in fact, had the master-servant mentality common among an older generation of Indian businessmen. Employees were his minions. He expected them to be at his disposal at all hours of the day or night and on weekends. He checked the security logs every morning to see when they badged in and out. Every evening, around seven thirty, he made a fly-by of the engineering department to make sure people were still at their desks working….”

    “Sunny” Balwani according to the post had the “master-servant” mentality….which is common in India…which might explain why so many get H1-B tickets to becoming CEO types in Big Tech. So are all the telemarketers with Indian accents in fact “indentured servants,” ruled over by Balwani types? Hmmmm…..

  9. Excellent write up Torchy!

    My sense is this was a scam from the beginning which went badly wrong when Tyler Schultz (who should have been a safe pair of hands as his dad was on the board) pulled the rug out. The WSJ expose etc after that was probably damage limitation.

    There have been rumors Theranos was going to be used as a component of the viral testing voodoo that is so controversial right now (mrna creator Malone, McCullough the eminent cardiologist et al being thrown under bus, banned etc).

    I think it was principally a financial Enron style scam at base though

    • Thanks, but it was Russ who did the heavy lifting on this one. Yes, I agree with your suspicions.

      Just imagine all of the unnecessary “treatments” and drugs they could sell to healthy people by occasionally manipulating blood test results — or phony virus test results for that matter. The opportunities for corruption boggle the mind.

      And then there’s the value of the data they would’ve collected. That alone was probably a third of the $9 billion valuation.

      • The ((Anglo)) prophetic ballad fulfilled:
        ‘Let me take you down ‘cause I’m going to
        strawberry fields,
        nothing is real.
        and nothing to get hung about-
        strawberry fields forever’.

      • Exactly. It came off the rails before it got so big no one would think to question its basic credibility. Microsoft’s first gen operating system was ripped off from CP/M and marketed as quick and dirty DoS. (The creator of CP/M died somewhat mysteriously).

        MSFT’s OS code house of cards is riddled with back doors and mystery zones but quickly gained critical mass as a cornerstone of western society. Theranos was arguably on the same trajectory until Tyler Schultz put some rocks on the rails and derailed the whole scam. That guy needs a few medals, hope he survives.

        C19 is very close to a Windows marketing model decades later, complete with product dates that are a little behind today (Windows95/C19 etc) with baffling variant update branding…the hidden hand of the Gates market maker…

        • That link is a great find from 28 years ago; I had never known the CP/M guy (probably) got whacked. “Computer Connections” eh? – many readers may be aware that Bill Gates’ mother sat on the Board of a Seattle philanthropy with the IBM CEO at the time – probably Cary – shortly before Bill and MS got the MSDOS contract

  10. In their own words,

    Context being the erosion of conservative values and deconstruction of Colorado has been unbelievable over the past 10-20 years — ask almost any Coloradoan, and they have no clue as to why. Just can’t put their finger on it. Often blaming California transplants….part of the problem, sure…but root cause is addressed the article above.

    • The governor, Jared Polis, is a male Jewish homosexual — what kind of white person votes for someone like that? — does the average white person seriously believe there is a commonality of interests between themselves and Jewish homosexuals?

  11. It’s somehow appropriate that the Jewish Wall St huckster Jim Cramer makes an appearance in the 60 Minutes segment — he’s the Jerry Springer of financial media.

    I doubt Theranos was a scam from the start, but at some point it became one — as was said, the engineers, scientists, and technicians were never able to realize the concept, or keep up with the promises Holmes was making — the scam or fraud started when she also realized development was not keeping pace, but she continued making the promises and buying time, hoping development would catch up, which it never did — the Walgreens escapade looks like the peak of the fraud stage.

    At what point do you admit it’s never going to work and give up? — this is probably a difficult call for any technology startup — one can see how the desire to continue, to keep trying, would merge into fraud at some point, as you have to deceive investors to make sure the money keeps flowing.

    One can understand early investors sinking money into the company knowing only the concept, perhaps also seeing some crude demonstration of the concept — obviously later investors could and should have demanded more in terms of verifying a track record of development milestones being met etc, but then many of them may have attempted to do such ‘due diligence’, but instead got a snow job from Holmes and her accomplices (there were probably others who deserved to be criminally charged).

  12. By the way, I assume the headline of this piece should by ‘Theranos: The Fyre Festival of Biotech’ — see the image of the tweet — while both exist, there is a difference between Fyre Festival, and Frye Festival, e.g. there are separate Wikipedia articles about them — it looks like you want Fyre Festival.

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