Both Holmes and Balwani appeared before US Magistrate Judge Susan van Keulen today where they were arraigned on nine counts of wire fraud and two counts of conspiracy to commit wire fraud.
David Taylor, Theranos' general counsel, has been named CEO.
Elizabeth Holmes has left her role as CEO of Theranos and has been charged with wire fraud, CNBC and others report. She remains chair of the board.
Blood testing company Theranos Inc said on Friday its founder, Elizabeth Holmes, would step down as chief executive officer, amid fraud charges leveled against the privately held firm. They now each face a maximum of 20 years in prison and up to $2.7 million in fines, a figure that doesn't include any cash the government might demand as restitution for the alleged fraud.
Earlier this month, a USA judge ruled investors who claimed that Theranos defrauded them into investing indirectly in the company by touting revolutionary blood-testing technology that never existed could not pursue their claims as a class action.
While Theranos touted the technology as revolutionary, the blood analyzer had only been successfully tested a few times, the Securities and Exchange Commission concluded. Theranos claimed its product could test a small drop of blood for a number of diseases, but it was never able to back that up.
Holmes and Theranos were charged with raising more than $700 million from investors through a fraudulent scheme that took place over the course of years. As part of a settlement, Holmes paid a fine and can not be a director or officer of a publicly traded company for 10 years.
It also alleges that Holmes and Balwani knew that their claims were false and that they knew that their analyzer technology had problems with accuracy and couldn't run as many tests as they claimed to run.