The Sociopathic Business Model™ Proved Venture Capital-Funded Startup Fraud Costs Employees Jobs: Theranos
Theranos Is Shutting Its Blood-Test Facilities, Shedding 40 Percent Of Workers https://t.co/L0VNmqGUSP
— NPR (@NPR) October 6, 2016
The Sociopathic Business Model™ proved that venture capital-funded startup fraud costs employees their jobs, consumers & patients safety, and long-term shareholders and taxpayers millions via the Acclarent Case Study. In this case study, I was the sole employee whistleblower for a venture capital funded-startup, Acclarent where the medical device fraud was knowingly & willingly acquired by Johnson & Johnson in 2010 for $785 million and the company complicity continued selling until 2013 when the FDA required the removal of the useless, fraudulently approved medical device. I was able to expose a pattern of fraud the DOJ was not yet familiar, helped recovered $18 million for the government, removed a worthless medical device that caused needless procedures solely for the sake of profit, and set the wheels in motion for former Acclarent executives William (Bill) Facteau & Patrick (Pat) Fabian’s arrest, federal indictment, conviction, and currently awaiting sentencing under Judge Allison Burroughs in Boston. By exposing this previously unknown pattern of fraud, the DOJ & SEC intervened in venture capital-funded startup fraud at Theranos.
As author of Killing My Career, while still under federal seal which precluded me from disclosing I was the whistleblower in the five year Johnson & Johnson Acclarent DOJ investigation, predicted this pattern in other venture capital-funded startups like Theranos, who today announced a 40% reduction of workers under the#RedFlag of “reinventing” the company. Consumer Alert: Any time a company “reorganizes” or “reinvents” or “rebrands” it’s usually masking fraud.
Employee job loss isn’t a reflection on employee’s performance, it’s a direct reflection of executive mismanagement where the company has encouraged, replicated and rewarded unethical and or illegal behavior. Fraud is not a sustainable sales model; but, fraud does follow a very specific pattern.
Venture capital (VC) firms select and groom an easily manipulated a first time CEO (or CEnO), eager to prove their worth in the industry and willing to use innovation as a manipulation to break the law, from Acclarent’s first CEO William (Bill) Facteau to Elizabeth Holmes CEO of Theranos which in turn creates #GodsOfFrauds. The only difference between the two executives is that Holmes is now disgraced and a convicted Facteau is celebrated as CEO of vc startup EarLens.
During the criminal trial of former Johnson & Johnson Acclarent CEO William Facteau, one of his attorneys, Reid Weingarten, of Steptoe & Johnson LLP, falsely claimed that Facteau was a job creator, when if fact the opposite was true. Post-acquisition employees lost their jobs, including both Facteau & Fabian, when Johnson & Johnson terminated them early from their two year retention contract. Again, fraud is not a sustainable sales model. Weingarten, also stated at Acclarent made roughly 50 people millionaires but neglected to mention they weren’t any of the employees that were lied to, threatened or intimidated or executed fraud on behalf of investors.
Look for the #RedFlags when looking for employment, especially in venture capital-funded startups, or before making a purchase (and yes, medical devices & testing is not only purchased by hospitals & facilities they’re also purchased by consumers and their private health insurance companies. )
Theranos CEO Elizabeth Holmes should be held legally accountable just like former Johnson & Johnson Acclarent executives William (Bill) Facteau and Patrick (Pat) Fabian should grab their seats federal prison during their November sentencing, and they should save a seat for Holmes and all the venture capital #BoardWhores who knowingly & willingly fund fraud.