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Theranos Faces Criminal Probe

Embattled blood-testing firm Theranos is the subject of a federal criminal investigation, the Wall Street Journal reports.

Theranos has been under fire lately as a string of WSJ articles have cast doubt on the accuracy of its proprietary lab testing platform and the extent to which the company uses that platform. They also raise concerns about its proficiency testing. In addition, an investigation by the Centers for Medicare & Medicaid Services uncovered issues with the company's testing, including one problem that it said posed "immediate jeopardy" to patients. After being unsatisfied with the company's plan to correct those issues, CMS has proposed banning Theranos CEO Elizabeth Holmes from the lab-testing industry for two years, though that has not gone into effect.

Federal prosecutors are looking into whether the company misled investors and federal regulators about the state of its technology, the Journal says. Both Walgreens Boots Alliance and the New York State Department of Health have received subpoenas that seek documents and testimony regarding what Theranos told them about its technologies.

Walgreens partnered with Theranos in 2013 to include Theranos wellness centers in 40 of its drugstores in Arizona. It has threatened to end its relationship with Theranos if these regulatory issues are not addressed. New York, meanwhile, received an application from the company for a laboratory license, and the Journal says that the application only mentioned using traditional lab machines, not a proprietary platform. The Journal adds that Theranos did not receive a New York license.

In a statement to its investors, Theranos says that although those WSJ articles touched off a number of investigations, some of them have ended. According to that statement, which the Verge has posted, investigations initiated by the Pennsylvania and Arizona health departments and the Food and Drug Administration have been closed, while the CMS, Securities Exchange Commission, and the US Attorney's Office for the Northern District of California investigations are ongoing.

 "The company continues to work closely with regulators and is cooperating fully with all investigations," company spokesperson Brooke Buchanan tells the New York Times.

The Journal notes that the investigations are in their early stages and that that the issuing of subpoenas does not mean that there will be any indictments.

On the Today show this week, CEO Holmes said she was "devastated" that the issues at the company's California lab weren't caught and addressed earlier, according to the Times.

She added that the company would persevere. "I know what we've built and I know what we've created and I know what it means to people," she said. "And it is a change that needs to happen in the world."