REVEALED: Elizabeth Holmes allegedly duped Betsy DeVos' family out of $100 million
Theranos founder Elizabeth Holmes, who's currently on trial for wire-fraud, allegedly duped former Education Secretary Betsy DeVos' family out of $100 million.
The Daily Beast reports that the DeVos family visited Theranos headquarters for a five-hour meeting with Holmes and company president Ramesh "Sunny" Balwani in 2014, before agreeing to invest $100 million in the startup.
The report is based on testimony during Holmes' trial from Lisa Peterson, who manages private equity investments for the DeVos family's RDV Corp.
"Peterson testified that Holmes was 'hand picking' uber-wealthy families to invest in the Palo Alto company, which claimed its portable blood-testing devices could screen for scores of diseases with just the prick of a patient's finger. (But, according to federal prosecutors, Holmes and Balwani knew their technology didn't work as advertised, even as they peddled it to consumers and high-powered investors.)" the Daily Beast reports. "Shortly after this meeting, Peterson and DeVos family members gathered in the Theranos parking lot to discuss their planned $50 million investment, which they ultimately doubled, the Wall Street Journal reported."
Petersen reportedly testified that the DeVos family was "impressed by Theranos' revenue projections of $140 million in 2014 and $990 million in 2015, and that she didn't realize the firm had zero income in 2012 and 2013."
"During cross examination, Holmes' attorney Lance Wade impugned Peterson's due diligence in researching Theranos before recommending the company to the DeVos family," the Daily Beast reports.
According to Law360 reporter Dorothy Atkins, who is covering Holmes' trial, Peterson "acknowledge(d) that the DeVos family investment firm never hired regulatory experts, counsel, or medical experts in the due diligence process, b/c 'we didn't think we needed it.'"
The Daily Beast reports that Peterson also testified that "DeVos family office was concerned that if their investigation into Theranos was too thorough, the firm would rescind the invitation to invest in what was billed as a groundbreaking technology."