"CEO Elizabeth Holmes and COO Sunny Balwani not only defrauded investors, but also consumers who trusted and relied upon their allegedly-revolutionary blood-testing technology", said acting U.S. Attorney Alex G. Tse, who won the indictment from a grand jury in the Northern District of California.
They are accused of carrying out a multi-million dollar a scheme to defraud investors, doctors and patients.
Sporting a black turtle neck that earned her the moniker "the next Steve Jobs", Holmes quickly became known as a wunderkind in Silicon Valley.
The indictment claims machinery developed by Theranos "was not capable of consistently producing accurate and reliable results for certain blood tests", and tests performed on the technology "were likely to contain inaccurate and unreliable results".
She claimed that Theranos could perform dozens of blood tests from a few finger-sticks of blood, an advance that would have disrupted the diagnostics industry now dominated by a handful of giant companies.
Theranos initially came under fire in 2015 over the accuracy of its blood tests.
Theranos' founder, Elizabeth Holmes, is stepping down as CEO as she faces criminal charges.
The indictment outlines these issues as well as alleged problems relating to the way Theranos presented its business to investors, including ambitious revenue projections of $1bn in 2015. He added that Balwani had not committed any crimes and is looking forward to clearing his name during the trial.
All Mr. Balwani did was put his heart and soul, and millions of dollars of his money, towardchanging the face of healthcare by giving people access to cost-effective blood tests so theycould take charge of their own health and monitor changes for signs of disease.
Holmes at one time was listed as the youngest self-made female billionaire.
The Securities and Exchange Commission also lodged financial charges against Theranos. Fortress Investment Group, which loaned Theranos $65 million previous year, is expected to seize the company's assets soon. However, she recently had her net worth revised to nothing following an investigation by a Wall Street Journal journalist into the technology behind the startup.
Company representatives didn't immediately respond to messages Friday.
Theranos chief executive officer Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in the Manhattan borough of NY.
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