Experts say Theranos 'too good to be true'

SAN JOSE, Calif. (KGO) -- Many critics of Theranos have been waving the red flag about the tech startup's promises and practices for a while, including one journalist who claimed the company was too good to be true.

"She refused to stop overpromising to investors," said Pulitzer Prize-winning Wall Street Journal reporter John Carreyrou. He says he isn't surprised that Theranos founder Elizabeth Holmes is facing federal fraud charges.

VIDEO: Journalist who broke Theranos fraud story walks through investigation

John Carreyrou spent more than three years reporting on Theranos. He spoke with ABC7 in the hours after Elizabeth Holmes was indicted on wire fraud by the U.S. Justice Department.Carreyrou said, "They basically waged a scorched earth campaign against me and my sources." Holmes ignored repeated requests from Carreyrou to be interviewed.

"It's a fraud that not only defrauded investors but put patients in harm's way," he added.

Carreyrou's new book, "Bad Blood: Secrets and Lies in a Silicon Valley Startup" details the rise and fall of the blood testing company. He said that he was threatened with lawsuits while doing his research. Holmes allegedly asked Wall Street Journal owner and Theranos investor Rupert Merdoch to intervene.

"She had met with him and tried to persuade him to kill the story," said Carreyrou.

Murdoch refused.

Stanford University Medical School Professor Phyllis Gardner was an early critic of Holmes and her blood testing idea. "I tried to tell her the idea wouldn't work. She wouldn't listen. For me, a vindication, I was right," she said.

"Unfortunately it was too good to be true," said Professor Christine Rosen of the Haas School of Business. She had high hopes for Holmes and Theranos. "She, as a cutting edge pioneering woman in this area -- it was a big fizzle."

For more on the Theranos fraud case, visit this page.