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Elizabeth Homes, the former CEO and founder of Theranos, has been found guilty on charges of wire fraud and conspiracy to commit wire fraud. Holmes faces up to 20 years in prison for defrauding investors in her blood testing startup. The verdict comes after a months-long trial, and more than three years after she was first charged and forced to step down as CEO in 2018.
Of the 11 total charges, Holmes was found guilty on four: conspiracy to defraud investors and three counts of wire fraud against individual investors. She was found not guilty on four additional charges, including one count of conspiracy to defraud patients, two counts of fraud against individual patients, and one count of wire fraud stemming from ads Theranos ran in Arizona. The jury was deadlocked on three other counts of wire fraud and returned no verdict on those charges.
During the trial, Holmes’ lawyers tried to portray her as a young and inexperienced entrepreneur. “Elizabeth Holmes worked herself to the bone for 15 years trying to make lab testing more affordable,” one of Holmes’ attorneys said in opening arguments. “She failed … but failure is not a crime.”
Holmes, who testified during the trial, said she hadn’t intended to mislead the public or investors, and had been advised to protect the company’s “trade secrets.” As The New York Times pointed out, she “spent much of her testimony arguing that others at Theranos were responsible for the company’s shortcomings.”
The prosecution alleged that Holmes knew about serious flaws in the company’s technology and hid the issues from investors. Former patients who had received inaccurate blood tests also testified, including an Arizona woman who received an incorrect result for an HIV test, and a woman who was misdiagnosed with a miscarriage.
Holmes’ story has been a source of widespread fascination even for those outside of Silicon Valley. At its peak, Theranos was valued at more than $9 billion, and had a board of directors filled with former high-ranking government officials, including two former Secretaries of State, Henry Kissinger and George Shultz. Holmes, who had dropped out of Stanford to start the company, regularly appeared on magazine covers and was often compared to Steve Jobs and other iconic founders. (Holmes herself was reportedly infatuated with Jobs and adopted his signature black turtlenecks.)
Former Wall Street Journal reporter John Carreyrou was the first to report on issues with Theranos’ technology in 2015, and his coverage prompted multiple investigations and lawsuits that ultimately resulted in criminal charges for Holmes and former COO Ramesh “Sunny” Balwani. On the stand, Holmes testified that her romantic relationship with Balwani had been abusive. Balwani’s trial is scheduled to begin in February.
There has been no shortage of pop culture depictions of Holmes. After Carreyrou’s best seller, Bad Blood, there was an HBO documentary and several podcasts about Theranos’ rise and ultimate downfall. Hulu is set to debut a new miniseries about the saga, with Amanda Seyfried starring as Holmes, in March. And Apple recently nabbed the Jennifer Lawrence-led film adaptation of Bad Blood.
Holmes, who will likely appeal the charges, could face up to 20 years in prison, though it's not yet clear when she will be sentenced. Following the verdict, the judge in the case said Holmes would be allowed to remain free on bail for the time being, though a new hearing "to discuss any change in the conditions of Holmes' liberty" could come as soon as next week, according to Mercury News reporter Ethan Baron. Prosecutors also asked for Holmes bail conditions to be changed, which would require her "to put up cash or property, rather than just her signature, to cover her $500,000 bail."
The judge also declared a mistrial on the three wire fraud charges that had left the jury deadlocked. The mistrial leaves open the possibility of a new trial, though the prosecutors haven't said whether they would pursue such an action.
Correction: Holmes was found not guilty on two counts of defrauding individual patients, not investors.