Elizabeth Holmes repeatedly lied to a wide variety of different people about the capabilities of her technology.
It's fine to have an ambitious plan that might not work out. It's fine to have a dream so crazy you have no idea how to achieve it. It's not fine to lie about what technology you have today or its capabilities. It's one thing to make forward-looking statements that are optimistic, and another thing to misrepresent where you are right now, or what you have already done, or to deliberately mislead people. Elizabeth Holmes has done this repeatedly.
Here are some examples of the lies that Holmes told, according to the SEC (1):
1) Holmes lied about how many blood tests her technology could perform. It could at best perform a dozen or so, but she lied and claimed it could perform hundreds.
2) Theranos gave fake demonstrations of its technology to major partners such as Walgreens. Holmes made it look like blood test demonstrations given to Walgreens were being performed on Theranos technology, when in fact third party commercial technology was being used.
3) Theranos gave investors fake demonstrations and fake information about its clinical trials. When investors visited Theranos, they frequently had their blood tested, and were given the impression these tests were run on Theranos machines. In fact, Theranos often ran these blood tests on third party commercial machines.
4) Holmes lied about military contracts. She told multiple investors as well as journalists that Theranos technology had been deployed by the Department of Defense on the battlefield in Afghanistan, and on medevac helicopters that transported casualties. Completely untrue.
5) Theranos made ridiculously unreasonable financial projections. In a year when Theranos had on the order of $100 thousand in revenue, she told investors that Theranos was on track to make $100 million in revenue.
It would be fine for her to say that she planned to do all of these things. It is not fine for her to lie to investors claiming that these things had already happened when they had not.
Lying is never OK, and lying like this is fraud. No sane investor would trust Holmes after what happened.
(1) https://www.sec.gov/litigation/complaints/2018/comp-pr2018-4...