Elizabeth Holmes, founder of the blood-testing start-up Theranos, and her former chief operating officer, Ramesh “Sunny” Balwani, were indicted by a federal grand jury on nine counts of wire fraud and two counts of conspiracy to commit wire fraud, the Department of Justice announced Friday.
Related: Theranos CEO Elizabeth Holmes surrenders control of the company and gives up most equity after SEC charges her with ‘elaborate, years-long fraud’ of $750M
Elizabeth Holmes, [right], founder of the blood-testing start-up Theranos, and her former COO, Ramesh “Sunny” Balwani, [left], were indicted by a federal grand jury on nine counts of wire fraud and two counts of conspiracy to commit wire fraud
The indictment alleges that the pair used marketing, press interviews and financial statements to defraud potential investors on behalf of their company. The start-up promised to disrupt medicine by selling, quick, cheap blood tests directly to consumers.
Holmes stepped down as chief executive of Theranos on Friday.
“This conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives,” Special Agent in Charge John F. Bennett said in a statement.
Holmes had already settled federal fraud charges by the Securities and Exchange Commission, agreeing to a $500,000 penalty and a 10-year ban on working as an officer or director of a public company.
Balwani faces those charges in court.