Jury Finds Theranos Founder Holmes Guilty Of 3 Fraud Charges And 1 Charge Of Conspiracy
(Photo : David Odisho/Getty Images)
SAN JOSE, CA - JANUARY 3: Theranos founder and former CEO Elizabeth Holmes (C) walks with her partner Billy Evans (L) and her mother Noel Holmes as they leave the Robert F. Peckham Federal Building on January 3, 2022 in San Jose, California. A jury found Elizabeth Holmes guilty on three counts of wire fraud and one count of conspiracy to defraud investors.

Elizabeth Holmes, former CEO and founder of blood testing technology company Theranos, was found guilty on four out of 11 charges.

Holmes, 37, was found guilty of one count of conspiracy to defraud investors and three wire fraud counts tied to specific investors.

The former self-made billionaire faces up to 20 years of imprisonment and a fine of $250,000 plus restitution for each count

Years ago, Theranos was admired for its claims to revolutionize the healthcare sector through its core blood-testing technology. However, it failed.

In the three-month trial, federal prosecutors presented 29 witnesses composed of former Theranos employees, executives, and a former US Defense Secretary to prove the alleged fraud that included Theranos's attempts to conceal its use of third-party manufactured machines for blood testing and misrepresenting its work with pharmaceutical companies and using the media to misinform the public, as per The Guardian.

During the closing arguments, Prosecutor Jeff Schenk said that Holmes had chosen "fraud over business failure."

"She chose to be dishonest with investors and patients. That choice was not only callous, it was criminal," said Schenk.

Holmes's Downfall

Holmes started Theranos in 2003 at the age of 19 while studying at Stanford. Eventually, she dropped out to manage her company full time. She attracted media attention with claims that Theranos had the breakthrough technology that could accurately test for a range of health conditions by using a few drops of blood, according to CNN.

The tech company was able to attract high-profile investors including Oracle founder Larry Ellison, media mogul Rupert Murdoch, Walton family of Walmart, and the family of former Education Secretary Betsy De Vos.

At its peak, Theranos was valued at $9 billion; and Holmes became a darling of the press being a visionary entrepreneur.

But a Wall Street Journal investigation in 2015 uncovered that the company only performed "roughly a dozen" of the hundreds of tests using its blood-testing equipment, with results that have suspicious precision.

Investigations also found that Theranos's claims were just overhyped as it was relying on third-party manufactured devices from traditional blood testing companies.

Read Also: Federal Authorities Bar Theranos Founder Elizabeth Holmes Barred From Operating a Lab

A Landmark Case

One University of Washington history professor dubbed the Holmes's trial as "blockbuster," wherein a rare female Silicon Valley CEO and youngest self-made female billionaire on paper makes history as the first of the Valley to be convicted of crime.

"What a blockbuster end to a blockbuster trial. Elizabeth Holmes made history as a rare female Silicon Valley CEO and the youngest self-made female billionaire [at least on paper]. Now she makes history again as the first Silicon Valley CEO to be convicted of a white-collar crime," said Professor Margaret O'Mara, author of "The Code: Silicon Valley and the Remaking of America."

Robert Dugdale, a former federal prosecutor who specializes in white-collar defense, considers the trial as a "significant win" for the government. "

"The investor counts she was convicted of were the most serious counts in the case. On top of that, the judge can take the other conduct charged in the case into account when Ms. Holmes is sentenced, regardless of the fact that the jury acquitted her of that conduct or did not return a verdict concerning that conduct in the government's favor," Dugdale commented, per Washington Post.

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