Elizabeth Holmes verdict: Theranos founder convicted of fraud and conspiracy

Jury was asked to consider whether she intentionally mislead investors, doctors and patients while collecting impressive investments for what promised to be a healthcare breakthrough

Alex Woodward
New York
Tuesday 04 January 2022 20:32
Elizabeth Holmes Testifies in Theranos Criminal Trial

A jury has found once-ascendant Silicon Valley star Elizabeth Holmes guilty of defrauding investors in her former blood-testing start-up company Theranos, which promised a revolutionary advancement in healthcare while raising millions of dollars.

Holmes, who founded Theranos in 2003 as a 19-year-old student at Stanford University, faced nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

On 3 January, Holmes was found guilty on four counts, including conspiracy against Theranos investors and wire fraud involving Theranos investors. She was found not guilty on four other counts, and jurors did not return a verdict in three other counts.

Jurors told Judge Edward Davila that they were unable to reach a unanimous verdict on three counts during the seventh full day of deliberations, then returned to the courtroom that afternoon to deliver the verdicts in the remaining charges.

She will be sentenced at a separate hearing.

The jury – which included eight men and four women – deliberated more than 50 hours after arguments concluded in the California courtroom in December following three months of proceedings and testimony from 32 witnesses.

Theranos, which shut down in 2018 following a Wall Street Journal investigation and heightened criminal and media scrutiny, promised to map patients’ health with just a small amount of blood.

It was heralded as a woman-led breakthrough in healthcare in a male-dominated Silicon Valley, raising nearly $1bn from venture capitalists and other powerful investors, including Rupert Murdoch. At one point, the company was valued at $9bn.

Central to her trial was the question of whether Holmes intentionally mislead investors, doctors and patients as she collected impressive investments.

She was ultimately found guilty of wire fraud in connection with three wire transfers totalling more than $143m.

Holmes also was found guilty of conspiring to commit wire fraud against investors between 2010 and 2015.

Assistant US attorney Jeffrey Schenk told the jury that Holmes “chose fraud over business failure”.

“She chose to be dishonest with her investors and patients. That choice was not only callous, it was criminal,” he said in his arguments.

Holmes, who testified in her defense during the trial, argued that the company’s failure did not necessarily mean she committed fraud, and its failure was not solely her doing – she pointed to Theranos CEO Ramesh “Sunny” Balwani, who is also a former boyfriend. He faces a trial on similar charges later this year.

She also alleged that he had abused her and maintained a powerful influence over her actions, allegations that he has denied.

Attorney Kevin Downey told the jury that Holmes “believed that she built a technology that could change the world” and “went down with the ship when it went down”.

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