Theranos founder Holmes indicted on wire fraud charges

Theranos founder Elizabeth Holmes and the blood testing company’s former president, Ramesh “Sunny” Balwani, have been indicted by a federal grand jury in California on charges of wire fraud, the Justice Department said on Friday.

According to the indictment, Holmes and Balwani encouraged doctors and patients to use the company’s blood testing services even though the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests, the department said in a statement.

Shortly before the indictments were announced on Friday, the company said that Holmes would step down as chief executive officer. The Securities and Exchange Commission leveled “massive fraud” charges against Holmes in March.

Holmes will remain chair of the privately held company’s board and David Taylor, the firm’s general counsel, has been appointed its CEO, Theranos said.

Holmes agreed in March to settle the SEC charges, under which she was barred from serving as an officer or director of a public company for 10 years.