A California jury on Monday found Theranos founder Elizabeth Holmes guilty in a case in which she was accused of covering up lies about her company’s blood-testing technology to dupe investors out of hundreds of millions of dollars.
Holmes, 37, was charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud in 2018 after her Silicon Valley start-up buckled under the weight of falsified claims it could scan for hundreds of diseases and other health problems using just a few drops of blood from a tiny finger prick.
The jurors found Holmes guilty on one count of conspiracy to commit wire fraud against investors and three counts of wire fraud. Each count carries a maximum sentence of 20 years in prison.
Holmes was found not guilty of another count of conspiracy to commit wire fraud against patients and three other counts of wire fraud. One count was dropped, and the jury was unable to come to a verdict on three additional counts of wire fraud.
If the technology was sound, as she said it was, it would have dramatically improved the conventional method of drawing vials of blood from needles, shipping them off to a lab, and waiting for results, which would often take up to days.
The Theranos pitch was so compelling that Holmes and her business partner Ramesh Balwani were able to quickly secure $945 million in funding and ink lucrative deals with Pfizer, Walgreens, and Safeway.
JURY BEGINS DELIBERATIONS IN CRIMINAL FRAUD CASE OF THERANOS FOUNDER ELIZABETH HOLMES
Holmes became the sweetheart of Silicon Valley and was featured on numerous magazine covers. She was likened to Apple founder Steve Jobs and even wore the same black-colored turtlenecks Jobs donned when giving a presentation. She’s also been accused of lowering her voice an octave or two to impress her male business associates, slipping back to her natural tone around family.
Holmes’s trial stretched on for nearly four months. Dozens of scientists, chief executives, and even a four-star general were called as witnesses.
Prosecutors spent most of their case painting Holmes as a desperate con artist who brazenly lied to make money. The defense claimed she was a misunderstood woman under the thumb of a controlling co-owner and Svengali, who manipulated her at every turn.
The trial’s most riveting testimony came from the defendant herself, who said she was raped at Stanford University, dropped out of college, and moved in with Balwani. She testified Balwani let her down by failing to fix problems the company was having in the lab.
Balwani, who is scheduled to go on trial in February, has vehemently denied those accusations.Â
During her testimony, Holmes also acknowledged she had made some bad decisions and big mistakes. She told jurors that she never stopped believing Theranos was on the verge of a major technological breakthrough that would revolutionize healthcare.
But that hope never materialized.
Theranos’s technology turned out to be severely flawed and produced wildly unreliable results. Prosecutors said even though Holmes knew this, she continued with press tours and hailed it as a success.
All that came to a screeching halt when a 2015 Wall Street Journal report started to poke holes in the company’s claims. Their report was followed by an audit by the Centers for Medicare & Medicaid Services, and soon thereafter, the U.S. Justice Department got involved and filed charges against Holmes and Balwani.
The company dissolved in 2018 after facing several civil and criminal federal investigations and reached an undisclosed settlement with the Securities and Exchange Commission. Holmes separately settled with the SEC in a deal that stripped her from being an officer or director of any public company for 10 years and required her to pay a $500,000 penalty. Holmes agreed to the settlement without admitting or denying the charges against her.
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Holmes was scheduled to go on trial much earlier — she was charged three years ago — but her fraud trial was delayed by COVID-19 and a pregnancy. Holmes gave birth to a boy on July 10 with her partner Billy Evans.
