Elizabeth Holmes Has Been Found Guilty Of Defrauding Investors With False Promises About Theranos’s Blood-Testing Technology
Theranos founder Elizabeth Holmes, who sought to revolutionize healthcare with a device she claimed could make medical diagnoses using just a fingerprick of blood, has been found guilty of engaging in a multimillion-dollar scheme to defraud investors by making misleading and false statements about the technology’s capabilities.
The jury reached the verdict on Monday after deliberating for more than 50 hours over seven days following a lengthy trial that featured testimony from more than 30 witnesses, including former employees, investors, doctors, and patients who used Theranos’s laboratory services.
Jurors needed to determine that Holmes intentionally defrauded investors and doctors and patients who used Theranos’s laboratory services in order to convict. The jury decided that Holmes conspired to defraud and defrauded investors, finding her guilty of four counts. She was found not guilty on four charges of conspiring to defraud and defrauding paying patients. The jury could not reach a verdict on three charges.
“The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacles,” US Attorney Stephanie Hinds said in a statement. “I thank the jurors for their thoughtful and determined service that ensured verdicts could be reached. 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.”
Now it will be up to a judge to determine her sentence at a later date. Each guilty count carries a maximum of 20 years in prison, plus a fine of $250,000. Holmes could also be ordered to pay restitution. One of the investment firms she was convicted of defrauding belongs to the DeVos family.
Holmes didn’t immediately react to the verdict as it was read, according to reporters in the courthouse.
Holmes will likely receive a sentence that’s much shorter than what the law allows because she is a mother with a young child and does not have a criminal history, Diane Birnholz, a former federal prosecutor and lecturer in law at the UCLA School of Law, told BuzzFeed News.
A Stanford University dropout who was once hailed as the next Steve Jobs, Holmes, 37, captivated investors — and the public — with her vision to make critical lab tests more accessible so that, as she famously repeated in interviews and appearances, “less people have to say goodbye too soon to people they love.”
The device that Theranos developed was supposedly faster, cheaper, and more accurate than all other lab equipment on the market and capable of running hundreds of tests on just a few drops of blood. But as a Wall Street Journal investigation revealed in 2015, in reality, the machine, which was much smaller than other blood analyzers, could run only a small number of the tests, and its results were rife with inaccuracies. Instead, Theranos relied on commercially available machines to run most of its tests, diluting the drops of blood to increase volume for some tests and using much larger samples drawn from patients’ arms for others.
The company eventually dissolved in 2018 after the Department of Justice indicted Holmes and her ex-boyfriend, Ramesh “Sunny” Balwani, who was Theranos’s president and chief operating officer, on two counts of conspiracy to commit wire fraud and nine counts of wire fraud each. Balwani is set to face a separate trial this year.
The case had drawn fascination among people who watched the very public rise and fall of Holmes, whose deep voice, unflinching stare, and uniform of black turtlenecks and red lipstick were captured in a variety of promotional materials and interviews, as well as in documentaries and podcasts. A scripted series featuring actor Amanda Seyfried is in the works, as is a movie starring Jennifer Lawrence. At the core of many of these projects are similar questions: How far should a Silicon Valley startup go as it seeks to disrupt an industry? How could so many wealthy, powerful people buy into a failing business? And was Holmes a delusional dreamer or simply a person running a scam?