The Theranos deception

A company with a blood-testing machine that could never perform as touted went from billion-dollar baby to complete bust. 60 Minutes reports, this Sunday at 7 p.m. ET/PT

Norah O'Donnell reports on the spectacular collapse of Theranos and its blood-testing device that fell miles short of the claims made by company founder Elizabeth Holmes. Former company employees Tyler Shultz, in his first television interview, and Doug Matje, in his first ever interview, tell O'Donnell the inside story of how the company defrauded investors and endangered the public with claims her blood analyzer could perform all the tests of traditional labs from just a finger-prick's worth of blood. O'Donnell's story will be broadcast on 60 Minutes, Sunday, May 20 at 7:00 p.m. ET/PT on CBS.

O'Donnell spoke about her report on CBS this Morning and previewed an excerpt of the story. A transcript of the excerpt is below.

Tyler Shultz:  I had a personal relationship with Elizabeth. She was close to my family. And I felt like she was deceiving my family. And the public.

And almost every media outlet, including us here at CBS, bought into the Theranos myth.

Norah O'Donnell: She's on the cover of magazines. Ink calls her the next Steve Jobs. Do you think the board of Theranos believed she could be also that kind of revolutionary leader?

Tyler Shultz: Yeah. Definitely. The board was completely sold.

Norah O'Donnell: Did your grandfather, George Shultz, think that too?

Tyler Shultz: Definitely. Yeah.

As her wealth and reputation soared, Elizabeth Holmes took on the trappings of power. She bragged bullet-proof windows were installed in her office and she traveled with a full-time security detail. Theranos employees told us they were closely watched and required to sign non-disclosure agreements, all reinforced, they said, by a threatening team of lawyers and private investigators. That's why, when Tyler Shultz alerted authorities in the spring of 2014, he used a fake name.

Norah O'Donnell: Why did you come up with an alias?

Tyler Shultz:  I knew how seriously Theranos protected their trade secrets. I knew they would not take it well if they knew that I was talking to regulators.