Theranos founder Elizabeth Holmes has been indicted on federal wire fraud charges, the office of the United States Attorney for the Northern District of California announced Friday. 
 
 Holmes and former Theranos COO and president Ramesh "Sunny" Balwani allegedly engaged in a multi-million dollar scheme to defraud investors, as well as a scheme to defraud doctors and patients, according to a release from the US Attorney's office. 
 
 Holmes and Balwani are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. The indictments happened Thursday and were unsealed on Friday. If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each count of wire fraud and each conspiracy count, according to the US Attorney's office. 
 
 Holmes and Balwani were accused of knowingly misrepresenting the capabilities of Theranos' proprietary blood testing technology. The two allegedly knew there were "accuracy and reliability problems," and that it "could not compete with existing, more conventional machines," the US Attorney's office said. 
 
 Minutes before the charges were made public, Theranos announced that Holmes has stepped down as CEO. The company's general counsel, David Taylor, will take over as CEO. Holmes will stay on as chair of the company's board. 
 
 An attorney for Holmes did not immediately respond to requests for comment. 
 
 Balwani's attorney, Jeffrey B. Coopersmith, said in a statement his client is innocent. "Mr. Balwani committed no crimes. He did not defraud Theranos investors, who were among the most sophisticated in the world. He did not defraud consumers, but instead worked tirelessly to empower them with access to their own health information. Mr. Balwani is innocent, and looks forward to clearing his name at trial," the statement said. 
 
 A lawyer for Theranos said the company had no comment. 
 
 Theranos was once valued at as much as $9 billion. 
 
 Holmes dropped out of Stanford University to launch Theranos in 2003 with a plan to offer cheaper, more efficient alternative to traditional medical tests. It promised patients the ability to test for conditions like cancer and diabetes with just a few drops of blood. 
 
 Related: 'Bad Blood' explores the culture inside disgraced startup Theranos 
 
 Holmes was once lauded as the youngest self-made female billionaire. But her net worth was revised down to nothing after Wall Street Journal investigative reporter John Carreyrou started digging into the technology behind her blood testing startup. Carreyrou's first expose on the company ran in October 2015 and Theranos voided two years of its blood tests just seven months later. 
 
 In March, the SEC announced "massive fraud" charges of $700 million against Theranos, Holmes and Balwani. The SEC said Theranos, Holmes and Balwani misled partners and investors about the company's technology, misrepresented revenue projections and falsely claimed it didn't need regulatory approval for its testing technology. 
 
 Theranos founder Elizabeth Holmes charged with massive fraud 
 
 Holmes and Theranos reached a settlement with the SEC, while the SEC said it would take its case against Balwani to court. 
 
 Coopersmith called the SEC action against his client "unwarranted." 
 
 "Sunny Balwani accurately represented Theranos to investors to the best of his ability," Coopersmith said in a statement. 
 
 Investors in Theranos included Oracle founder Larry Ellison, venture capital firm Draper Fisher Jurvetson, now Secretary of Education Betsy DeVos and media mogul Rupert Murdoch. ||||| Image copyright Reuters Image caption Theranos founder Elizabeth Holmes 
 
 The founder of a US start-up that promised to revolutionise blood testing has been hit with criminal charges. 
 
 US prosecutors said Theranos founder Elizabeth Holmes engaged in a multi-million dollar scheme to defraud investors, doctors and patients. 
 
 The charges come three months after Ms Holmes settled charges from financial regulators that she lied about the capabilities of her firm's blood tests. 
 
 Theranos earlier said Ms Holmes would step down as chief executive. 
 
 Federal prosecutors said Ms Holmes encouraged doctors and patients to use the firm's blood tests even though she knew the tests were not consistently accurate. 
 
 Theranos's former president Ramesh "Sunny" Balwani was also charged. 
 
 Theranos, founded in 2003 when Ms Holmes was 19, had claimed its devices could test for conditions such as cancer and cholesterol with only a few drops of blood from a finger-prick, rather than taking full blood samples by needle from a vein. 
 
 "This conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives," said John F Bennett of the Federal Bureau of Investigation (FBI). 
 
 They charged Ms Holmes, 34 and Mr Balwani, 53, with wire fraud. 
 
 Theranos earlier on Friday said its general counsel David Taylor had been named chief executive. At the time, it said Ms Holmes would remain on the board of the company.
– Federal prosecutors have charged Theranos Inc. founder Elizabeth Holmes and former president and COO Ramesh Balwani with two counts of conspiracy to commit wire fraud and nine counts of wire fraud, reports the Wall Street Journal. They allege Holmes and Balwani defrauded investors, doctors, and patients out of millions of dollars. The indictments are the culmination of a 2½ year investigation into the blood-testing company. Theranos is a cautionary tale for red-hot startups. Once lauded as the youngest self-made female billionaire, Holmes sold investors on unproven claims that the company’s devices could test for conditions such as cancer and cholesterol with just a pinprick of blood, reports BBC. If convicted Holmes and Balwani face up to 20 years in prison, a fine of $250,000, and restitution, per CNN. The Wall Street Journal first sounded an alarm about the company in a series of articles beginning in October 2015. They found that Theranos’s much-hyped blood-testing technology was unreliable, and in fact the company relied mostly on commercial products purchased from other companies. Compounding the problem, the company altered the products they purchased in ways that compromised the accuracy of the testing results. Prosecutors say Holmes, 34, and Balwani, 53, knew their product was faulty. Eventually, the company was forced to void or correct nearly a million test results and reimburse tens of thousands of customers. Theranos is nearing the liquidation stage. Fortress Investment Group, which loaned Theranos $65 million last year, is expected to seize the company’s assets soon.