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The founder of US tech unicorn Theranos has been hit with criminal charges for her role in a multi-million dollar scheme to defraud investors.

The US Department of Justice said it had filed criminal charges against Elizabeth Holmes and Ramesh “Sunny” Balwani, her former chief operating officer, for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

If convicted they face a maximum of 20 years in prison.

The Silicon Valley-based company was hailed as a game changer in the blood testing industry, offering devices that could test for conditions such as cancer through a finger-prick rather that drawing blood through needles.

However, US prosecutors found that Theranos enticed investors to use this method while knowing they were not 100 per cent reliable or accurate.

"This conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives," said John F Bennett of the FBI.

The company's fall from grace began when Holmes and Balwani were hit with civil charges by the US Securities and Exchange Commission (SEC) in March, which found they had fraudulently raising more than $700m (£502m) from investors.

Holmes agreed to settle the charges against her, accepting a $500,000 fine, returning the 18.9m shares she received during the alleged fraud and agreeing to be barred from serving as an officer or director of a public company for 10 years.

Theranos said yesterday its general counsel David Taylor would take over as chief executive.

Read more: Founder of former tech unicorn Theranos charged with massive fraud

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