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By: Emmanuel Roy
TrueNewsBlog – Elizabeth Holmes was the CEO of a California company called Theranos. Over several years, she raised millions of dollars from investors with the assistance of several famous people, including a former and well-respected U.S. Secretary of State, Henry L. Kissinger.
While raising money, Ms. Holmes made several claims to investors that were untrue. Some of the false claims involved the nature of the technology associated with blood testing and how the technology could detect certain diseases in the blood. That specific claim was a lie, and Ms. Holmes knew that. The investors who poured millions of dollars relied on false claims to make their investments.
In 2015, a series of journalistic and regulatory investigations revealed doubts about the company’s technology claims and whether Holmes had misled investors and the government.
In 2018, the U.S. Securities and Exchange Commission (SEC) charged Theranos and Holmes with deceiving investors by “massive fraud” through false or exaggerated claims about the accuracy of the company’s blood-testing technology. Holmes settled the SEC charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and accepting a ten-year ban from serving as an officer or director of a public company.
In June 2018, a federal grand jury indicted Holmes and former Theranos Chief Operating Officer (COO) Ramesh “Sunny” Balwani on nine counts of wire fraud and two counts of conspiracy to commit wire fraud, with the victims being investors and patients. Her trial in the case of U.S. v. Holmes, et al. ended in January 2022 when Holmes was convicted of defrauding investors. On November 18, 2022, Holmes was sentenced to 11 years in prison.
The parallel between Eddy Alexandre, indicted for defrauding thousands of Haitian American investors, and Elizabeth Holmes could not be more telling.
Within less than a year, Mr. Alexandre raised 250 million dollars by misleading investors about the nature of their investment with his company Emini-FX. Specifically, Mr. Alexandre promised investors a guaranteed weekly return of 5 percent from the investment but only invested some of the money. The only investment he made resulted in a 9 million dollars loss which he failed to disclose to investors.
In addition, he told investors that their money would be invested in cryptocurrency. In reality, Alexandre deposited most of the money in his own bank accounts, and the five percent paid to early investors was not from investment.
According to the government, Mr. Alexandre used subsequent investors’ money to pay old investors. The government claims that Mr. Alexandre was running a Ponzi scheme. Mr. Alexandre is charged with two counts of wire fraud for lying and misleading investors. Like Ms. Holmes, Mr. Alexandre told the investors that he had designed and developed a unique proprietary computer system that helped with the investment. But, according to the government, there was no unique computer system.
Like Mr. Alexandre, Ms. Holmes had retained capable lawyers to assist her in her defense, but when all was said and done, she was convicted of wire fraud and conspiracy to commit wire fraud.
Similarly, Mr. Alexandre retained excellent counsel to assist him. Still, when one objectively reviews the allegations made by the government and the evidence so far, it is hard to see how Mr. Alexandre can prevail. Like Ms. Holmes, Mr. Alexandre most likely will be convicted of wire fraud and may be sentenced to between 8.5 to 12 years in prison.
Unlike Ms. Holmes, Mr. Alexandre has a segment of the Emini-FX investor group who support him. Most of them are church members- Seven Day Adventists who insist that Mr. Alexandre was helping his community until the government unceremoniously disrupted his good work. Some of them even claim that his arrest and prosecution were motivated by racial bias.
Mr. Alexandre trial is scheduled for March 23, 2023 and we will continue to report on this case.
