Jury finds Theranos founder Elizabeth Holmes guilty on four charges in fraud case

by mcardinal

Chris Lange, FISM News


A jury on Monday found Theranos founder Elizabeth Holmes guilty on four of 11 charges that she faced for defrauding investors with misleading claims about the efficacy of her blood-testing technology.

Holmes, 37, was found guilty on three counts of wire fraud against Theranos investors and one count of conspiracy to commit wire fraud, according to the Wall Street Journal. She was acquitted on three counts of defrauding patients who paid Theranos for blood test results and a related count of conspiracy to commit wire fraud.

Holmes, who pleaded not guilty to all charges, appeared stoic as the verdict was read, according to CNBC reporters present inside the courtroom. She faces up to 80 years in prison but will likely receive a much lower sentence. 

During the four-month-long trial, former Theranos employees testified that they resigned from the company after realizing that its technology was deeply flawed. Former patients also took the stand telling the jury they would not have relied on Theranos’ tests had they been aware its efficacy claims were false. Holmes’ attorneys argued that the prosecution lacked statistical evidence of a high error rate and denied their claim that Holmes was aware of inaccuracies.

According to prosecutors, Holmes conned wealthy investors and high-profile board members into backing Theranos by persuading them that the company’s compact machines could run a gamut of health tests using only a small droplet of blood, a claim she knew to be false.

“She chose fraud over business failure. She chose to be dishonest,” Assistant U.S. Attorney Jeff Schenk said. “That choice was not only callous, it was criminal.”

Holmes took the stand in her defense, testifying that she never meant to mislead anyone and claimed that Theranos’ lab directors were the ones responsible for quality testing. Her defense team argued that Holmes thought she was “building a technology that would change the world” and denied the prosecution’s claim that she was solely motivated by money. They are likely to appeal the verdict.

Holmes founded Theranos in 2003, when she was just 19 years old. By 2015, she had skyrocketed to Silicon Valley fame, achieving a staggering net worth of $4.5 billion, according to Forbes

Holmes cleverly modeled herself as the next Steve Jobs, often sporting the Apple founder’s signature black turtlenecks while peddling her company’s purported revolutionary lab-testing capabilities to a litany of rich investors who eagerly took the bait.

In reality, Theranos was secretly running patient tests through existing lab equipment manufactured by Siemens. Powerful backers like Rupert Murdoch and former Defense Secretary Jim Mattis were, no doubt, impressed with Holmes’ fabricated claim that Theranos lab-testing devices were being used by the U.S. military.  

The elaborate facade began to crumble, however, in the wake of a series of blistering articles published by the Wall Street Journal citing whistleblowers who said Theranos’ devices were ineffective. The company collapsed under mounting scrutiny and Holmes was indicted in 2018, along with Theranos’ former chief operating officer Ramesh Balwani with whom Holmes was romantically involved. Balwani has also pleaded not guilty to the charges and will face trial at a later date.