Elizabeth Holmes Found Guilty on 4 Counts in Criminal Fraud Trial

Elizabeth Holmes
Elizabeth Holmes at her federal trial in California.Getty

The former Theranos chief faced 11 criminal charges, alleging she defrauded investors and duped patients over blood-testing technology.

Former Theranos chief executive Elizabeth Holmes has been found guilty on four federal charges that she bilked investors with wild claims that her firm's blood-testing technology would revolutionize the medical world. 

The 37-year-old faced nine counts of wire fraud and two counts of conspiracy to commit wire fraud in connection with her Silicon Valley start-up, Theranos, which dissolved in 2018 after Holmes agreed to a settlement of "massive fraud" charges brought by the Securities and Exchange Commission.

She was convicted Monday of three counts of wire fraud and one count of conspiracy to commit wire fraud by lying to investors. Holmes was acquitted on four other counts related to defrauding patients who had used her firm's blood tests. Jurors were unable to reach a verdict on three counts of deceiving investors. Judge Edward J. Davila said he would declare a mistrial on those charges.

The San Jose jury of eight men and four women began deliberating Dec. 20, tasked with deciding whether the one-time billionaire lied to physicians, investors and patients about the capabilities of her company in order to take their money.

San Francisco U.S. Attorney Stephanie Hinds said the guilty verdicts showed Holmes’ “culpability in this large-scale investor fraud.”

The former executive showed no emotion as the verdicts were read. She left the courthouse without speaking to reporters outside.

The trial, which started more than three months ago, garnered global attention, driven by fascination with Holmes, who founded Theranos as a 19-year-old college dropout. In the following years, she received glowing publicity for cracking Silicon Valley's male-dominated culture with tantalizing claims and exceptional fundraising skills.

But it all fell apart after a series of stories began appearing in 2015 in The Wall Street Journal that disclosed the company’s blood-testing technology was flawed and often produced false results that could endanger patients.

Three years later, the company was in ruins and the Justice Department filed 11 felony counts of fraud and conspiracy. The federal trial was delayed until this year because of COVID-19 and Holmes' pregnancy with her first child.

Holmes spent seven days on the witness stand, testifying in her own defense. She acknowledged making mistakes and said she regretted some decisions she made while leading the defunct firm. But she maintained she never doubted that Theranos was on the verge of revolutionizing health care.

The core claims of Theranos were assertions that its blood-testing technology could scan for hundreds of diseases and medical problems with only drops of blood from a finger prick instead of vials taken from a vein with a needle.

Theranos raised more than $900 million and cemented partnerships with retail giants Walgreens and Safeway. 

The firm's investors included media mogul Rupert Murdoch, the billionaire family of former Secretary of Education Betsy DeVos and the Walton family, heirs to the Walmart fortune.

Federal prosecutors spent 11 weeks walking jurors through a complex trail of evidence alleging Holmes deliberately misled investors and patients for financial gain.

The government called 29 witnesses, including former Theranos employees, retail executives, investors, patients, and a former Secretary of Defense who once served on the company's board. The testimony contained claims that Theranos hid its blood-testing procedures, overstated its finances and duped media outlets into perpetuating those false assertions.

Holmes faces a maximum punishment of 20 years for each guilty count. A sentencing hearing date is expected to be set next week.

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