Founder of blood-testing company charged with massive fraud

She and her top associate claimed they'd created revolutionary technology.
2:03 | 03/15/18

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Transcript for Founder of blood-testing company charged with massive fraud
Now, to the stunning fall of a former CEO, described as America's youngest self-made female billionaire. Elizabeth Holmes charged with massive fraud. Her company claiming to revolutionize blood testing, diagnosing hundreds of diseases with just a pin price. But were those results accurate and did that do all that they promised? Here's ABC's chief business correspondent Rebecca Jarvis tonight. Reporter: Once celebrated as the next Steve jobs -- We have made it possible to run comprehensive laboratory tests from a tiny sample. Reporter: Elizabeth Holmes, founder of healthcare startup theranos, charged by the S.E.C. With massive fraud. The 34-year-old and her top associate claimed they had created revolutionary technology, requiring just a few drops of blood to run hundreds of lab tests that could quickly detect diseases like leukemia and HIV. Now accused of running an "Elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance." Palav Sharda says he became skeptical during a routine theranos blood test at Walgreens when instead of a simple test, they took out a test tube. I asked her, "Well, wait. Wait a minute. This is supposed to be a pin prick." Reporter: Sharda claims that test inaccurately showed he had pre-diabetes. This is not right. You just can't lie. Reporter: Walgreens has since pulled theranos tests from its drugstores. Theranos, whose board of directors once included general James Mattis, now fighting off bankruptcy. And Rebecca here with us tonight. Rebecca, we know before the S.E.C. Released its findings, the department of justice was already investigating what do we know about that? Reporter: That's right. We know the department of justice was scrutinizing this company, but the status of that is currently unclear. As for those S.E.C. Charges, Elizabeth Holmes will have to pay $500,000 in fines. She will no longer be able to serve as an officer or director of any public company for the next decade and neither she nor the company has admitted or denied any wrongdoing. All right, but a stunning fall. Rebecca, thank you.

This transcript has been automatically generated and may not be 100% accurate.

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