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Theranos case an example of complex nature of health care crimes

| Mar 13, 2020 | Health Care Investigations |

The case against Theranos continues. Questions about the company, based in the health care industry and set to “revolutionize medical laboratory testing” with innovative blood draw and testing methods, began in 2015. Ultimately, investigations resulted in allegations the company made false claims about its ability to provide fast, cheap and reliable blood and lab test results and omitted information about issues with its technologies. These allegations led patients to use their services. As a result, the government charged the founder and an associate with multiple crimes.

The United States Attorney’s Office recently stated it would only pursue criminal charges of wire fraud against Theranos founder Elizabeth Holmes. Federal courts support the move, stating there was no evidence the founder and her associate directed medical professionals to misrepresent the test. However, the federal courts maintained the two encouraged use of the services even though they were aware the tests were not consistently reliable, thus supporting the continuation of some form of criminal charges.  

Why wire fraud charges?

The government has argued the two used interstate electronic wires to purchase advertisements for use of their labs in California and Arizona. The ads focused on the affordability of the tests offered by the lab in an effort to entice individuals to purchase their product.

If convicted, the accused face 20 years jail time, a $250,000 fine and restitution for each criminal count. Founder Holmes is charged with one count of conspiracy to commit wire fraud and nine counts of wire fraud. This essentially translates to a lifetime imprisonment and crippling debt.

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