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 was charged with nine counts of wire fraud as well as two counts of conspiracy for wire fraud in connection to her Silicon Valley startup, Theranos. Holmes settled the case in 2018. “massive fraud”Securities and Exchange Commission brought charges.
Monday saw her convicted of wire fraud three times and conspiracy to deceive investors one time. Holmes was also acquitted of four other charges related to defrauding patients that had used her firm’s blood tests. Three counts of deceiving investors were not decided by jurors. Judge Edward J. Davila stated that he would declare a mistrial for those three 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.”
As the verdicts of the jury were read, the ex-executive showed no emotion. She left the courthouse and did not speak to reporters.
The trial began more than three months ago and was largely covered by global media. This was due to the fascination Holmes has with Theranos, founded as a college dropout at 19 years old. 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 was on the witness stand for seven days, giving evidence in her own defense. Holmes acknowledged her mistakes and admitted she regretted certain decisions she made during her time leading the defunct business. But, she said she didn’t doubt that Theranos was about to revolutionize healthcare.
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 $900 million in capital and formed partnerships with 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.
The federal prosecutors spent eleven weeks leading jurors through a trail of evidence that alleges Holmes intentionally misled investors, patients and others 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 government claimed that Theranos overstated its finances, hid its blood-testing procedures and deceived media outlets into publishing those false statements.
Holmes is subject to a maximum sentence of 20 years per conviction. The date for the sentencing hearing is set for next week.