Same Theranos Fraud. A Decade Later.
Texas "revolutionary" cancer blood-testing company run by an ex-VC bro who likes to party hard at strip clubs and (allegedly) spend company money at an "elite social club" has been charged with fraud.
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The playbook for healthcare technology fraud hasn’t changed…
Two founders, almost exactly a decade apart, Elizabeth Holmes and Sumit Rai, faced consequences for eerily similar fraud schemes: promising “revolutionary” blood tests, exploiting regulatory gaps, and captivating investors who failed to ask basic questions. The parallels between Theranos and Cancer Check Labs are so striking that anyone who has read “Bad Blood“ (or, at a minimum, has heard Taylor Swift’s song 😉) should have seen this coming.
Holmes claimed 200+ tests from one drop of blood. Rai claimed detection of 200+ cancer types from 40ml of blood. Both bypassed FDA approval through the same regulatory loophole. Both lacked peer-reviewed publications. Both had founders with zero medical backgrounds. Both used celebrity glamour as a substitute for scientific validation. The formula is so consistent it could be a template—and that’s precisely the problem.
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Alright. Back to the health tech fraud…
It especially upsets me when people play with things like cancer. It is a painful topic for so many people in this country and around the world. Yet it seems to me that for VCs and other financial professionals, this is just another risk-return analysis. Cancer has become a business. Claiming you are in cancer research certainly opens a lot of doors. But eventually people will figure you out. What these VCs are not considering, and let’s be honest, do not give a sh*t about, is the damage and the carnage they create across communities when they calmly move on to their next investment opportunity as if nothing happened.
Plus, in this case, the fraud. Sumit Rai, the founder and CEO of Cancer Click Labs, a Dallas based cancer blood testing company, is apparently a regular at strip clubs and what he calls an “elite social club”. He seems to like spending company money on his personal entertainment.
And that is why, on January 15, 2026, the SEC filed a civil complaint in the U.S. District Court in Massachusetts, charging Sumit Rai and his entities with a $10.6M fraud.
Honestly, I am surprised the lawsuit was not brought by the DOJ. Usually they start with the criminal charge, and then the SEC piggybacks by copying and pasting the DOJ statements. The charges seem serious enough for the DOJ to look at. But what do I know. Maybe charging protesters in Minnesota is higher on the priority list for the DOJ right now now.
There is also a hint of Madoff and FTX here, to be frank. Madoff’s $65B Ponzi scheme and FTX’s $8B crypto fraud are the number 1 and number 2 largest frauds in history, respectively. For example, one of Rai’s companies, Cancer Click Labs, was named a relief defendant. That means the company itself was not charged with fraud, but some of the fraud proceeds were funneled to the company from Rai’s other entities, SVN Med LLC, NVS Med Inc., and Onco Filtration, Inc.
Anyway, it is a weird story. And because it is a civil lawsuit, ironically, Mr. Rai and his co defendants could just walk away with a fine. Welcome to the American legal system.
By the way, it is so icky when I read the terms “diagnosing cancer” and “strip clubs” in the same SEC complaint. Ugh.
TL;DR:
1. The $10.6M Strip Club Fraud Wore a Lab Coat
2. Two Playbooks, One Template: The Theranos Formula Repeats
3. The Board Problem: Politicians and Celebrities Ain’t Scientists
4. Investor Due Diligence: From FOMO to Fraud Victim
5. The Same Warnings That Should Have Stopped Walgreens
6. Why These Frauds Keep Working: the CTC Detection Impossibility
7. Media Complicity: From Cover Stories to Cautionary Tales
8. The Detection Checklist: Red Flags That Should Never Be Missed
9. Conclusion: The Inexcusable Failure to Learn From History
