Sam Brusco, Associate Editor01.04.22
Former Theranos CEO and founder Elizabeth Holmes was found guilty on four charges of defrauding investors late last night, according to a CNN report. She was also found not guilty on three charges of defrauding patients and conspiracy to defraud patients. No verdict was the ruling on three charges for defrauding investors and three wire fraud counts attached to certain investors.
For each count, Holmes could see up to 20 years in prison and a $250,000 fine plus restitution per count.
"The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacles," U.S. Attorney Stephanie Hinds said in a statement a spokesperson read aloud outside the courthouse. "The guilty verdicts in this case reflect Ms. Holmes' culpability in this large-scale investor fraud, and she must now face sentencing for her crimes."
The jury determined Holmes was guilty on investor-related charges, but none around defrauding patients. Deliberating for 50 hours, the jury could not reach unanimous verdict on three of the eleven counts—despite presiding Judge Edward Davila’s issue of an Allen charge.
The trial, hosted at a San Jose, Calif. federal courthouse, lasted over three months with over 30 witnesses testifying during the trial. Holmes was the last to testify, and took the stand for seven days in her own defense.
Holmes was first indicted in 2018, along with former Theranos president and COO Ramesh “Sunny” Balwani. However, the COVID-19 pandemic and the birth of her child delayed the trial. Public interest in Holmes has stayed strong since then with documentaries, podcasts, an upcoming TV miniseries, and planned film.
At its apex, Theranos was valued at $9 billion and Holmes was heralded as an innovator and entrepreneur of the Steve Jobs caliber, even sporting the signature black turtleneck. Homes and other Theranos executives claimed the company’s Edison device could test for multiple diseases with one blood draw. But the extent of Theranos’ fraud came to light after the infamous 2015 Wall Street Journal investigation, which found the company only performed a dozen of the hundreds of tests it offered, with dubious accuracy. Instead, the company relied on third-party manufactured devices from blood testing companies.
In her defense, Holmes shifted the blame to Balwani, testifying that he abused her and aimed to control almost every facet of her life in order to help her become successful. Balwani faces the same charges, and has denied abuse allegations in court filings. He is set to be tried early this year.
The jury’s task was not an easy one—to determine whether Homes was a well-meaning founder who made a few mistakes (as her defense claimed) or she intentionally misled investors and patients (as prosecutors alleged).
"This is a verdict that should matter not just to Silicon Valley but to the people who celebrate it, invest in it and use its products," Margaret O'Mara, a historian of the tech industry and professor at the University of Washington, told CNN. "She was made possible by a Valley business culture that celebrated and encouraged very young, marginally experienced people."
For each count, Holmes could see up to 20 years in prison and a $250,000 fine plus restitution per count.
"The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacles," U.S. Attorney Stephanie Hinds said in a statement a spokesperson read aloud outside the courthouse. "The guilty verdicts in this case reflect Ms. Holmes' culpability in this large-scale investor fraud, and she must now face sentencing for her crimes."
The jury determined Holmes was guilty on investor-related charges, but none around defrauding patients. Deliberating for 50 hours, the jury could not reach unanimous verdict on three of the eleven counts—despite presiding Judge Edward Davila’s issue of an Allen charge.
The trial, hosted at a San Jose, Calif. federal courthouse, lasted over three months with over 30 witnesses testifying during the trial. Holmes was the last to testify, and took the stand for seven days in her own defense.
Holmes was first indicted in 2018, along with former Theranos president and COO Ramesh “Sunny” Balwani. However, the COVID-19 pandemic and the birth of her child delayed the trial. Public interest in Holmes has stayed strong since then with documentaries, podcasts, an upcoming TV miniseries, and planned film.
At its apex, Theranos was valued at $9 billion and Holmes was heralded as an innovator and entrepreneur of the Steve Jobs caliber, even sporting the signature black turtleneck. Homes and other Theranos executives claimed the company’s Edison device could test for multiple diseases with one blood draw. But the extent of Theranos’ fraud came to light after the infamous 2015 Wall Street Journal investigation, which found the company only performed a dozen of the hundreds of tests it offered, with dubious accuracy. Instead, the company relied on third-party manufactured devices from blood testing companies.
In her defense, Holmes shifted the blame to Balwani, testifying that he abused her and aimed to control almost every facet of her life in order to help her become successful. Balwani faces the same charges, and has denied abuse allegations in court filings. He is set to be tried early this year.
The jury’s task was not an easy one—to determine whether Homes was a well-meaning founder who made a few mistakes (as her defense claimed) or she intentionally misled investors and patients (as prosecutors alleged).
"This is a verdict that should matter not just to Silicon Valley but to the people who celebrate it, invest in it and use its products," Margaret O'Mara, a historian of the tech industry and professor at the University of Washington, told CNN. "She was made possible by a Valley business culture that celebrated and encouraged very young, marginally experienced people."