Elizabeth Holmes, once a darling of Silicon Valley, vowed to disrupt health care with inexpensive, accessible finger-prick blood tests.

Now the 34-year-old founder of the biotech startup Theranos is facing federal criminal charges. On Friday, the US attorney’s office in San Francisco wrapped up a two-and-a-half-year investigation of Theranos by indicting Holmes and her ex-boyfriend Sunny Balwani, Theranos’s former president and CEO, for alleged fraud. The federal prosecutors allege Holmes and Balwani defrauded doctors, patients, and investors of hundreds of millions of dollars.

According to a press release about the indictment, the duo “used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’s blood testing laboratory services, even though the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests.”

The criminal charges follow civil fraud charges in March against Holmes and Balwani from the Securities and Exchange Commission.

Related How Silicon Valley got played by Theranos

At its peak, Theranos was valued at $9 billion and employed 800 people. Yet according to John Carreyrou, the Wall Street Journal reporter whose investigations exposed Theranos’s fraud, the company is down to just 20 employees who are trying to close up shop. Holmes also announced she stepped down as CEO earlier Friday.

The story of Theranos increasingly looks like a cautionary tale about hype in Silicon Valley. The FBI special agent in charge of the investigation, John Bennett, warned, “This office, along with our other law enforcement partners in the Bay Area, will vigorously investigate and prosecute those who do not play by the rules that make Silicon Valley work.”

And in the Journal, Carreyrou also called the charges a “warning shot for Silicon Valley”:

As money has gushed into the Valley’s ecosystem in recent years, hundreds of private tech startups valued at more than $1 billion have sprouted, embracing a culture of disruption of incumbent industries and a cavalier attitude toward regulations.

Here’s a quick primer on how the house of Theranos slowly crumbled until it crashed, and what it means for Silicon Valley health tech.

Theranos claimed to offer faster, cheaper, painless blood tests

The first big sign of trouble at Theranos came from a Wall Street Journal investigation published in October 2015. In it, Carreyrou showed that the company’s claims of a health care revolution were overblown. Contrary to Holmes’s public statements, Theranos had allegedly been collecting blood samples using traditional methods and then diluting them so they could be run on machines made by other companies — not their much-hyped Edison technology (more on that below).

What’s more, the Journal’s investigation, as well as a follow-up story, suggested there were major concerns about the accuracy of Theranos’s test results.

Theranos had claimed it had the technology to take blood from a simple, painless prick and run multiple tests on that raindrop-size sample rather than the multiple vials usually required. The sample would be sent to a lab in a “nanotainer” and tested on Theranos’s proprietary technology, known as Edison machines.

Theranos also promised to deliver results in a few hours, to eliminate anxiety-inducing waits. Holmes said the tests would cost about half of current Medicare and Medicaid reimbursement rates.

It seemed promising. In 2013, Theranos opened 42 “wellness centers” in Walgreens pharmacies in Arizona, two in California, and one in Pennsylvania. Holmes had also started lobbying state governments to allow patients to order Theranos tests without having to go through the cumbersome process of getting a doctor’s note — a step that, in theory, would further cut down on time and cost to patients.

By 2015, Holmes had persuaded Arizona’s legislature to pass a law allowing patients to go right to her labs and order up whatever menu of testing they wanted, without doctors’ approval.

So not only was Holmes trying to upend the way blood testing is done, she was also trying to change how people interact with the health care system. Considering that every person gets blood tests at some point, the changes she promised were a big deal.

Many of Theranos’s claims were never validated, raising suspicions

Even before the Journal investigation, critics had begun asking for proof that Theranos’s technology actually worked and that its results were accurate. After all, the evidence on this wasn’t public: The Food and Drug Administration hadn’t cleared Theranos’s tests. And Holmes had never published her claims in peer-reviewed journals at that point.

Holmes and Theranos’s PR team deflected these critics by citing intellectual property concerns and suggesting that any complaints were being planted by rival testing companies such as Quest and Laboratory Corporation. Here’s how Ken Auletta of the New Yorker described Holmes’s stonewalling:

What exactly happens in the machines is treated as a state secret, and Holmes’s description of the process was comically vague: “A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.” [Holmes] added that, thanks to “miniaturization and automation, we are able to handle these tiny samples.”

Then in October 2015 came the massive Wall Street Journal investigation. Carreyrou eventually discovered and reported that it appeared Theranos rarely even used its much-hyped Edison technology in its tests. Instead, the startup allegedly relied mostly on older technology by companies like Siemens for the bulk of its testing. (This was in contrast to the company’s claims that it used older machines only for “certain esoteric and less commonly ordered tests.”)

Carreyrou raised real concerns that the company’s signature Edison machines — the ones that had garnered all the hype — weren’t nearly as accurate as claimed. On this point, he cited former employees, internal emails, and doctors. One Theranos employee even complained to regulators that Theranos had been gaming the system, “failing to report test results that raised questions about the precision of the Edison system.”

After the Journal’s story, more critics came forward and claimed that their blood test results from Theranos didn’t quite match those from standard labs. In a follow-up, the Wall Street Journal confirmed that the FDA had pressured Theranos to stop using its Edison technology on almost all of its blood tests save for one (a test for Type 1 herpes simplex) because of concerns about the machines’ accuracy.

So how did Theranos get so much hype with such weak claims?

There’s no shortage of Silicon Valley companies that claim to be changing the world, but Theranos stood out for a few reasons: It had an amazing origin story, it was led by a young woman in a mostly male tech industry, and it promised to solve a problem that was relevant to most people.

Holmes, the company’s founder, dropped out of Stanford as a sophomore in 2004. She said she’d started the company to address her phobia of needles — one that she realized many people shared — and out of the desire to help people diagnose potential diseases faster and at more accessible prices. Her message that billion-dollar lab companies were ripping people off with costly, outdated, and unnecessarily painful technology resonated deeply.

Here’s how Carreyrou described Holmes’s outsize appeal to me earlier this week:

She was going to be the first tech founder billionaire who is a woman. It was also that her product and her company were going to do good, as opposed to just being a smartphone app that you can use to hail a taxi. The two parts of that proposition combined were very potent.

Over the next decade, Holmes managed not only to get her own Stanford professor and mentor on board but also to attract $400 million from venture capitalists and assemble a star-studded board that included former US Secretaries of State Henry Kissinger and George P. Shultz.

In this context, it’s not surprising that favorable press followed: Holmes could be found, always in Steve Jobs–esque black, on the cover of Forbes and Fortune, and was even the subject of that in-depth New Yorker profile by Auletta. She was named “the world’s youngest self-made female billionaire” by Forbes and “America’s coolest billionaire” by Inc. magazine, and even made Time magazine’s list of the “100 most influential people.”

Holmes was also borrowing from a classic Silicon Valley playbook — the “fake it till you make it adage” so many tech founders have had success with. But as Carreyrou noted, health tech is different from other areas of technology:

It’s a reminder that your consumer isn’t just someone sitting at home or on the go, disappointed if their Twitter feed has an outage. It’s someone who is going to be making an important health decision based on how your product works. They should bear that in mind — lives are at stake.

This whole episode should be a cautionary tale: If a secretive tech company is claiming to revolutionize an entire industry with technology that still hasn’t been validated, be skeptical.