0:03 mrs holmes please raise your right hand
0:05 do you swear to tell the truth the whole
0:07 truth and nothing but the truth i do
0:09 this is elizabeth holmes once the
0:12 youngest female self-made billionaire in
0:14 this never-before-aired deposition she
0:17 sits across from 12 attorneys under
0:19 investigation for an alleged years-long
0:22 fraud did it concern you that a number
0:24 of tests weren't working
0:26 on their
0:28 devices now facing up to 20 years in
0:31 prison it's a stunning fall from grace
0:32 for the woman who was once poised to
0:35 change the world this is a revolutionary
0:36 company that threatens to change health care
0:38 care
0:40 if she had made this work
0:42 she would have been the next steve jobs
0:44 we made it possible
0:46 to eliminate the tubes and tubes of
0:48 blood her technology promised to run
0:51 hundreds of tests from a tiny finger prick
0:52 prick
0:54 a promise she would never fulfill
0:56 this is not fake it to make it this
0:57 thing's a product that didn't work did
1:00 ms holmes know that theranos could not
1:02 do all those tests
1:05 she yeah she knew it's a story of greed
1:10 and it's a story of incredible deception [Music]
1:24 it all started here at stanford
1:27 university the birthplace of so many
1:29 tech icons in silicon valley one of the
1:31 things that people brag about is that
1:33 they drop out of college steve jobs
1:34 dropped out of college mark zuckerberg
1:35 dropped out of college bill gates
1:37 dropped out of college after less than
1:40 two years here elizabeth dropped out too
1:42 i was at a point where
1:44 another few classes
1:45 classes
1:47 in chemical engineering was not
1:50 necessary for what i wanted to do in
1:52 2003 she launched her company which she
1:54 would come to name theranos it's about
1:56 keeping that conviction in yourself
1:58 elizabeth wanted nothing less than to be
2:00 the apple of health care
2:02 insiders say she was obsessed with steve
2:04 jobs and that she wanted to mimic him at
2:07 every turn from those signature black turtlenecks
2:08 turtlenecks
2:10 to recruiting his former head of
2:13 software avi tivanian this seems like a
2:16 really bright young lady
2:18 who is very driven has
2:21 a really interesting idea but he quickly
2:23 started seeing red flags she'd prick her finger
2:24 finger
2:26 and then she would put blood on
2:27 something and then she put it in the
2:30 machine and then sometimes she would say
2:32 this part doesn't work anymore
2:34 which was a little bit odd but some of
2:35 that you expect again from a startup
2:38 that has a product that's not done right
2:39 but the problem was it never got any better
2:40 better
2:43 avi quit after a year but elizabeth kept going
2:44 going
2:46 eventually getting an enormous loan from
2:49 a former software executive named sunny
2:51 belwani i think it was about 20 million dollars
2:53 dollars
2:55 but sunny a flashy entrepreneur who
2:57 drove a porsche 911 and a black
3:00 lamborghini wasn't just offering a lifeline
3:01 lifeline
3:04 he was also joining theranos as coo
3:05 did he have any qualifications in the
3:09 lab testing business he did not or in
3:11 pathology or anything like that not to
3:13 my knowledge
3:15 he seemed an odd choice to employees but
3:18 he became elizabeth's number two and
3:20 together they went after their biggest
3:21 collaboration yet
3:24 with walgreens as seen here in this
3:26 theranos tweet walgreens at that point
3:29 had more than 8 000 stores in the u.s
3:31 so you can imagine that the theranose
3:33 blood test would have been available at
3:35 almost every street corner so they cut a
3:38 140 million dollar deal
3:40 on the heels of that news she assembled
3:42 an all-star board of government
3:44 heavyweights the piece that really
3:47 vaulted her to fame and stardom was the
3:50 cover story in fortune magazine
3:52 the article states that theranos offers
3:54 more than 200 blood tests without a syringe
3:55 syringe
3:58 but precisely how theranose accomplishes
4:00 all these amazing feats is a trade secret
4:02 secret
4:04 you saw her almost once a week
4:07 either gracing a magazine cover or
4:08 attending a tech conference or a
4:12 healthcare conference or going on tv [Music]
4:13 [Music]
4:15 elizabeth holmes from theranos
4:17 elizabeth's home elizabeth holmes thank
4:20 you yeah for having me i am so
4:22 incredibly humbled we did this
4:23 this
4:25 you founded this company 12 years ago
4:27 right tell them how old you were i was 19.
4:29 19. [Music]
4:31 [Music]
4:34 by 2014 theranos is valued at nearly 10
4:36 billion dollars
4:38 the founders of walmart invest 150
4:42 million media mogul rupert murdoch 125
4:44 million and the devos family including
4:47 now education secretary betsy devos
4:53 but for all the hype on the outside on
4:55 the inside things weren't going as planned
5:01 employees like erica chung were dealing
5:04 with a product that still wasn't working
5:07 at what point do you start to think
5:08 something isn't right here i think the
5:10 transition happened is when i started
5:12 processing patient samples so you
5:15 basically start out with a base test yep
5:17 and it kept failing i kept running it
5:19 over and over and over and how it was
5:23 handled it totally blew me away they
5:25 took out data points so you're you're
5:27 saying essentially
5:29 that you were cherry-picking exactly the
5:32 information right but the thing is is we
5:47 this is the walgreens where i had the
5:53 as a breast cancer survivor cheri needed
5:56 to get tested regularly
5:58 but things took a terrifying turn when
6:00 she got her results
6:03 i saw that the estradiol amount was over
6:06 300 i called my oncologist's office and
6:08 the nurse called me back and she said
6:11 i am so sorry that's not good there
6:13 could be a tumor growing somewhere i
6:15 will never forget that day the doctor
6:18 told sherry to go in for more tests but
6:21 this time recommended a non-therinos lab
6:23 it was about a week later
6:26 i got the call from my doctor and he
6:28 said congratulations
6:31 your estrogen is basically non-existent
6:33 the theranose tests had been off by
6:38 no one from theranos ever called me to apologize
6:41 apologize
6:45 not okay
6:48 so many inside the walls of theranos say
6:50 they were too scared to speak up but
6:52 there was one unlikely whistleblower
6:54 willing to take the risk
6:57 a research engineer named tyler schultz
6:59 he also happened to be the grandson of
7:02 former secretary of state george schultz
7:05 a board member at theranos you also said
7:07 that ms holmes was manipulative what do
7:08 you mean by that she's really good at
7:11 telling you what you need to hear to
7:14 keep going she definitely did that
7:17 a lot with my grandfather
7:19 she would just like feed him things that
7:21 were just completely factually not true
7:24 people can come in and do full-service
7:26 laboratory testing
7:28 with a stick from a finger as opposed to
7:30 having the tubes and tubes taken from
7:32 your arm
7:35 can you recall any of the factually not
7:38 true things that ms holmes told you
7:39 the big ones are being able to run
7:41 hundreds of blood tests from a single
7:47 my grandfather would go
7:48 get a theranose test done and he would
7:54 you know it's like well i thought this
7:56 was a single drop of blood and there
7:58 would be some you know excuse about why
8:00 they needed to take a venus draw for him
8:01 but you know for everybody else it's a
8:03 finger break and he continued to buy
8:05 into that
8:06 they weren't even running most of the
8:08 tests on the theranos devices while i
8:10 was working there we only ran seven tests
8:11 tests
8:14 on the therianos devices
8:16 and most the tests were being run
8:18 on third-party machines
8:20 did ms holmes know at the time
8:23 that theranos could not do all those
8:29 of the few tests they were running on
8:32 theranos devices tyler says the results
8:34 were often not accurate
8:36 i think at the end of the day everyone
8:37 was concerned that we weren't giving
8:39 patients the right results
8:41 tyler eventually decided he would raise
8:44 his issues directly with the ceo herself
8:46 elizabeth responded by email later that evening
8:48 evening
8:50 she writes tyler these are very very
8:52 serious comments and allegations you're
8:53 making and then she says that she's
8:55 going to have to go have the teams go
8:57 through this line by line so we'll take
8:58 some time before i get back to you in this
9:00 this
9:02 but rather than a follow-up from
9:04 elizabeth he received this email from
9:07 sonny belwani that reckless comment
9:09 based on absolute ignorance is so
9:11 insulting to me that had any other
9:13 person made these statements we would
9:14 have held them accountable in the
9:16 strongest way the only reason i have
9:18 taken so much time away from work to
9:21 address this personally is because you
9:24 are mr schultz's grandson the only email
9:25 on this topic i want to see from you
9:28 going forward is an apology
9:31 instead tyler gave his two weeks notice
9:33 he says he went to go meet with his
9:35 grandfather at his home later that day
9:38 tyler tried to make him realize that
9:40 this was a fraud and his grandfather had
9:42 sided with elizabeth holmes and didn't
9:44 believe him he said they're trying to
9:46 convince me that you're stupid
9:48 but they can't do that
9:49 they can't however convince me that
9:51 you're wrong and in this case i do
9:54 believe you're wrong and
9:56 my grandfather said that the theranos
9:58 devices were currently being used in
10:05 he said that he said that did he tell
10:08 you who had told him that
10:10 he didn't say who told him that
10:13 but i have a really good guess [Music]
10:17 [Music]
10:18 he also said they were being used in
10:19 operating rooms
10:21 i remember saying that that couldn't
10:24 possibly be true because
10:25 the devices were barely working within
10:27 the walls of theranos
10:28 having made no progress with his
10:31 grandfather tyler eventually took his
10:32 concerns to wall street journal
10:39 careyroo authored the first of many
10:41 explosive articles in the wall street
10:44 journal that stated among other claims
10:46 that the company isn't using its
10:48 technology for all the tests it offers
10:50 but instead was using traditional
10:52 machines bought from companies like
10:56 siemens to run the majority of its tests
10:57 following the article a defiant
11:00 elizabeth appeared on mad money with jim
11:02 cramer this is what happens when you
11:04 work to change things and
11:06 first they think you're crazy then they
11:07 fight you and then all of a sudden you
11:09 change the world
11:14 elizabeth continued to deny deny deny
11:17 but when we come back under the harsh
11:19 glare of a different kind of spotlight
11:21 she'd find it harder to avoid the
11:23 mounting evidence i know
11:25 that we made mistakes and for the first
11:28 time ever you'll hear from the defense
11:30 attorney for the co of theranose
11:35 hi everyone george stephanopoulos here
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