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Investigators are also examining whether Theranos misled government officials, which can be a crime under federal law, some of the people said. Such subpoenas

Investigators are also examining whether Theranos misled government officials, which can be a crime under federal law, some of the people said. Such subpoenas don’t necessarily mean prosecutors are actively seeking an indictment. People familiar with the matter said the investigation is at an early stage. In addition to the criminal probe, the Securities and Exchange Commission is examining whether Theranos made deceptive statements to investors when it solicited funding, according to people familiar with the matter. Theranos was valued at $9 billion in a funding round in 2014 and the majority stake of Elizabeth Holmes, the startup’s founder and chief executive, at more than half that. Has there been any other examples of such high profile entrepreneurs ending up at the wrong end of a criminal investigation?

adventured 11y ago
Sure. Adelphia Cable was a large company - the fifth largest cable company in the US - founded by John Rigas, and he was indicted when it imploded: "Federal prosecutors proved that the Rigases used complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing $100 million for themselves." https://en.wikipedia.org/wiki/Adelphia_Communications_Corporation https://en.wikipedia.org/wiki/Adelphia_Communications_Corpor... A few other examples from that time are not as clean when it comes to the direct "entrepreneur" part. Kenneth Lay is sometimes considered the founder of Enron, but he didn't build or found most of the pieces of it. Bernie Ebbers of Worldcom was a bit closer to being a traditional entrepreneur story: "Ebbers began his business career operating a chain of motels in Mississippi. He joined with several other people in 1983 as investors in the newly formed Long Distance Discount Services, Inc. (LDDS). Two years later he was named chief executive of the corporation. The company acquired over 60 other independent telecommunications firms, changing its name to WorldCom in 1995." https://en.wikipedia.org/wiki/Bernard_Ebbers https://en.wikipedia.org/wiki/Bernard_Ebbers Crazy Eddie is a famous story, but quite a lot smaller than Theranos (well, in regards to b.s. market valuation): "At its maximum, Crazy Eddie had 43 stores in the chain, and earned more than $300 million in sales" [that $300m in sales would adjust quite a lot higher in today's dollar] https://en.wikipedia.org/wiki/Crazy_Eddie https://en.wikipedia.org/wiki/Crazy_Eddie Bernie Madoff is maybe the most famous example (he ran his own firm for 48 years!): "Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008" https://en.wikipedia.org/wiki/Bernard_Madoff https://en.wikipedia.org/wiki/Bernard_Madoff Allen Stanford was sort of out of the same mold: https://en.wikipedia.org/wiki/Allen_Stanford https://en.wikipedia.org/wiki/Allen_Stanford

adventured 11y ago

Sure. Adelphia Cable was a large company - the fifth largest cable company in the US - founded by John Rigas, and he was indicted when it imploded: "Federal prosecutors proved that the Rigases used complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing $100 million for themselves." https://en.wikipedia.org/wiki/Adelphia_Communications_Corporation https://en.wikipedia.org/wiki/Adelphia_Communications_Corpor... A few other examples from that time are not as clean when it comes to the direct "entrepreneur" part. Kenneth Lay is sometimes considered the founder of Enron, but he didn't build or found most of the pieces of it. Bernie Ebbers of Worldcom was a bit closer to being a traditional entrepreneur story: "Ebbers began his business career operating a chain of motels in Mississippi. He joined with several other people in 1983 as investors in the newly formed Long Distance Discount Services, Inc. (LDDS). Two years later he was named chief executive of the corporation. The company acquired over 60 other independent telecommunications firms, changing its name to WorldCom in 1995." https://en.wikipedia.org/wiki/Bernard_Ebbers https://en.wikipedia.org/wiki/Bernard_Ebbers Crazy Eddie is a famous story, but quite a lot smaller than Theranos (well, in regards to b.s. market valuation): "At its maximum, Crazy Eddie had 43 stores in the chain, and earned more than $300 million in sales" [that $300m in sales would adjust quite a lot higher in today's dollar] https://en.wikipedia.org/wiki/Crazy_Eddie https://en.wikipedia.org/wiki/Crazy_Eddie Bernie Madoff is maybe the most famous example (he ran his own firm for 48 years!): "Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008" https://en.wikipedia.org/wiki/Bernard_Madoff https://en.wikipedia.org/wiki/Bernard_Madoff Allen Stanford was sort of out of the same mold: https://en.wikipedia.org/wiki/Allen_Stanford https://en.wikipedia.org/wiki/Allen_Stanford