An incident back in 2006 shows just how far back Theranos' deception went in the company's history

Blood-testing company Theranos had been around for 12 years before questions started getting raised. However, the company had a long history of deceptive practices.In Wall Street Journal investigative reporter John Carreyrou's new book,"Bad Blood:Secrets and Lies in a Silicon Valley Startup,"he describes a demonstration of the technology in 2006, in which recorded blood-testing results were presented as real-time results.While in Switzerland for the demonstration, one of the readers had malfunctioned, and a fake result was sent over from California.While Theranos was founded in 2003, questions didn't start getting raised about the company until nearly 12 years later when Wall Street Journal investigative reporter John Carreyrou started poking holes into its claims about its new blood tests.The tests, which used a much smaller amount of blood than a normal blood test, had been touted as being able to work across hundreds of tests from potassium levels to diagnosing herpes.But, as Carreyrou outlines in his book "Bad Blood:Secrets and Lies in a Silicon Valley Startup,"trouble was brewing years earlier.Back in 2006, about three years after the company got off the ground, Theranos founder Elizabeth Holmes gave a demonstration to the pharmaceutical giant Novartis in Switzerland. The demonstration, by all accounts was a success. But the Theranos employees who had been on the trip didn't seem too excited, noticed Theranos' former chief financial officer Henry Mosley.That's because the blood-testing system the team had demonstrated in Switzerland didn't always work. To mask the problem, the team had recorded results that could be displayed during a demo to investors. Mosley wanted to know if that happened at the Novartis meeting.Here's how Carreyrou recounts it in the book:"Mosley couldn't get a straight answer from anyone, but he now suspected some similar sleight of hand. And he was right. One of the two readers Elizabeth took to Switzerland had malfunctioned when they got there. The employees she brought with her had stayed up all night trying to get it to work. To mask the problem during the demo the next morning, Tim Kemp's team in California had beamed over a fake result."After Mosley learned this, he brought it up to Holmes, who admitted there had been an issue, but didn't seem bothered by it. But when he brought up that he suspected the tests may have malfunctioned during meetings with investors, Holme's tone changed, and he was fired.SEE ALSO:Theranos appears to be running out of money ' here are the investors who stand to lose the mostJoin the conversation about this storyNOW WATCH: Google's new AI can impersonate a human to schedule appointments and make reservations
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