Fraud in Silicon Valley: Elizabeth Holmes and the Theranos Fraud Scandal By Elizabeth Hazel

TW: Mention of sexual assault”

 

This article was published in NCGR eNews during spring 2023, shortly after Holmes was convicted.

 

Silicon Valley companies are good at creating apps and programs, and they’re good at raising venture capital. But when it comes to developing complex medical equipment, the jury is still out.

 

Near the end of 2003, a 19-year-old Stanford student named Elizabeth Holmes came up with an excellent idea to invent a machine that only requires a few drops of blood to perform blood tests. A machine like that could be worth billions. She dropped out of Stanford in March 2004 and used her tuition funds as seed money for her start-up. Holmes initially called her company Real-Time Cures but renamed it Theranos (combining therapy and diagnosis). Her politically well-connected family helped her attract notable political functionaries, including former Secretary of State George Schulz, Henry Kissinger, and a retired military brass for her board. By December 2004, Holmes had raised $5 million in venture capital. A facility in Palo Alto, California was built to house the research laboratory.

 

By 2010, Theranos had over $92 million in venture capital. Holmes and her partner Sunny Balwani were able to operate the privately-owned company in stealth mode, unlike publicly-traded businesses that must disclose financial status and earnings. Theranos didn’t even have a website until 2013 when a partnership with Walgreens was announced. Walgreens installed in-store blood sample collection kiosks in Arizona. Holmes convinced the Arizona legislature to allow customers to order their own blood tests, too. At its peak in 2013-2014, Theranos was valued at $10 billion.

 

Problems emerged quickly. Blood test results from Theranos were inconsistent with results from traditional labs. Disgruntled employees left the company and talked to reporters in spite of non-disclosure agreements. Investigative journalist John Carreyrou of the Wall Street Journal, along with outside medical researchers, questioned the validity of the so-called Edison blood-testing machine. An FDA inspection in 2015 discovered multiple violations. Theranos’s deals with pharmacy franchises started to crumble.

 

Federal agencies including the SEC launched criminal investigations in April 2016. Holmes and Balwani were indicted on multiple counts of fraud in June 2018, and the company was formally dissolved on September 4, 2018. Holmes and Balwani were convicted in 2022 and sentenced to over a decade in prison. Business investors lost more than $600 million in private investments. Big losers included the Walton family ($150M), Rupert Murdoch ($121M), Betsy DeVos ($100M), and the Cox family ($100M).

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Elizabeth Holmes was born on February 3, 1984 in Washington, DC. A rectified time of 10:50 a.m. gives a Taurus ASC, Mars-Saturn in the 7th, and Mercury on the Capricorn MC. It’s an unusual bucket chart with Chiron as the handle. Mars-Saturn in Scorpio is a strong signature for science and research, while Mercury on the MC highlights her impressive communication skills. Holmes also has Uranus conjunct the South Node in Sagittarius sextile her Aquarius Sun. The rectified 10:50 a.m. chart fits with transit-event charts fairly well. A 10th house Sun suggests high visibility. Holmes was on the cover of nearly every major business magazine in print, on numerous high-profile talk shows, and a guest speaker at many conferences. It was exciting to see a young woman as the CEO of a scientific development start-up worth billions.

 

Neptune is the planet linked to massive frauds. Holmes has a tight Neptune-Jupiter-Venus conjunction in Capricorn with a helpful sextile from her Pisces Moon. Her golden idea evoked sympathy (who likes getting poked with a needle to get blood drawn?) and greed. 

 

Holmes contacted the Stanford police on October 5, 2003 and alleged that she had been raped at a fraternity house between 1:00–3:00 a.m. that night. Transiting Mars was conjunct her Moon and Pluto conjunct her Uranus-SN. There are no details about the police investigation, but the transits to her chart suggest something traumatic occurred. Holmes came up with the idea for her blood sampling machine shortly after this incident. No precise date for the inception of Theranos was found but the Full Moon/Lunar Eclipse at 16° Taurus on November 8, 2003 had the Sun conjunct her Saturn. The eclipse chart features an exceptionally rare Grand Sextile in earth and water signs. Blood testing equipment hasn’t been significantly updated for decades, and two testing companies dominate the entire industry. Her idea was fantastic, but her vision of a portable-size blood testing box (Saturn reduces size) was impossible to build.

 

Neptune transited Holmes’ 10th house and was conjunct her Sun in 2004–2005 when she raised a phenomenal amount of venture capital. Uranus transited her Pisces Moon at the same time. The development of the Edison blood-testing machine wasn’t her only secret; she was having a clandestine affair with Sunny Balwani. Neptune entered Pisces in 2012–2013 and made repeated conjunctions to her Moon. Corporate value and personal coverage peaked. 

 

Problems arose as Chiron squared her Uranus-Nodes in 2015 and Saturn transited the first half of Sagittarius. Neptune squared her Uranus and Nodal axis and Uranus squared her natal Mercury in 2018 when the company collapsed and she became embroiled in fraud charges. Pluto transited her Mercury from 2018–2020. The transiting Uranus-Pluto square activated the radix Chiron-Saturn opposition in the tentative Theranos/Lunar Eclipse inception chart for November 8, 2008. By the time the company was dissolved, Neptune had completed a two-year transit in the early degrees of Pisces that activated the corporate radix Venus-Mars square.

 

Natal Mercury has distinctly potent narrative function for Holmes. The true-believer spiel she’d given for years to raise money and promote the effectiveness of her company’s R&D was challenged and proven false during the Pluto transit. Saturn transited her Sun in 2021–2022 when she was indicted, tried, and convicted of fraud and sentenced to twelve years in prison. Saturn can make or break a reputation, but the fall of Theranos and Holmes’ conviction has purportedly harmed women in science and tech fields, making it more difficult for women to fund start-ups.

 

The collective effect on women appears in the 2022 Spring Equinox chart.⁽¹⁾ It features a Libra Moon partile square Pluto in the 8th house (financial scandals). Since that chart has a mutable Gemini ASC, the 2022 Autumn Equinox chart must be used. [1] It has Saturn in the 10th square Uranus and the Nodal axis on the ASC, Pluto on the MC, and a tight Venus-Neptune opposition in the 5th–11th axis with Venus in fall in Virgo—hard times for women. Holmes was sentenced on November 18, 2022. The Theranos trial was in the national media spotlight after the contentious November 2022 midterm elections.

 

Endnotes:

 

[1] Ingress chart Ascendant usage rules from Deborah Houlding “The Significations of the Planets” at http://www.skyscript.co.uk/ingresses.html. “If the Ascendant is in a cardinal sign, it remains valid for three months only, and must use Cancer, Libra, and Capricorn ingress charts. If the Ascendant is in a mutable sign, it remains valid for 6 months and must use Libra ingress. If the Ascendant is in a fixed sign, the chart remains valid for the whole year.”

 

References:

HBO documentary, The Inventor: Out for Blood in Silicon Valley, (1 hr 58 min) 2019.

Hannah Lynn, “The True Story Behind The Dropout and the Elizabeth Holmes Theranos Scandal,” TIME Magazine, March 22, 2022, https://time.com/6153335/elizabeth-holmes-the-dropout-true-story/

Elizabeth Holmes biography, https://en.wikipedia.org/Elizabeth_Holmes

Fraud trial information: Department of Justice site, Northern District of California press release, “Theranos Founder Elizabeth Holmes Found Guilty of Investor Fraud,” https://www.justice.gov/usao-ndca/pr/theranos-founder-elizabeth-holmes-found-guilty-investor-fraud

 

 

Elizabeth Hazel is a long-time board member of the SMARRT/Ann Arbor chapter of NCGR and author of Chiron and Centaur Kisses: An Argosy of Meaning (June 2026), Little Book of Fixed Stars and Antiscia: Secrets in the Mirror, available at Amazon. Contact: ehazel@bex.net