In California, a federal jury found Elizabeth Holmes, the Theranos founder, guilty of investment fraud. She was charged with nine counts of wire fraud, and two counts of conspiracy to commit wire fraud under an indictment brought 3 ½ years ago. The jury convicted her on four of 11 charges of investment fraud. Each count carries a maximum prison sentence of 20 years. However, the 12 jurors failed to reach a verdict on three counts related to investors and was found not guilty of four charges relating to defrauding the public. A steep fall from grace!
Prosecutors said Elizabeth Holmes knowingly lied about the Theranos technology she said could detect diseases with a few drops of blood. At its peak, Theranos was valued at $9bn and was the darling of Silicon Valley. It promised it would revolutionize the healthcare industry. However, its claims began to unravel in 2015 after the Wall Street Journal reported that its core blood-testing technology did not work.
For nearly four months at trial, the jury of eight men and four women heard the arguments of the prosecutors and the defense lawyers. The prosecutors called some 30 witnesses and sought to prove that Holmes knew the Theranos solution she was selling to investors was a sham.
[Holmes] chose fraud over business failure. She chose to be dishonest with investors and patients. That choice was not only callous, it was criminal.
prosecutor Jeff Schenk in closing arguments
At trial, multiple lab directors testified that they told Holmes about Theranos‘ technology flaws, but she instructed them to downplay their concerns. At the same time, they said, Holmes told investors the technology was operating as planned.
At the 15-week trial, Elizabeth Holmes testified in her defense, showing regret for missteps and saying she never intended to mislead anyone. She maintained she never knowingly defrauded patients or investors. The defense team also laid blame on Ramesh “Sunny” Balwani, Holmes’ former business partner and long-term boyfriend. Holmes accused Balwani, 19 years her senior, of emotional and sexual abuse at trial. He denies the allegations.
Holmes was not taken into custody, with no date confirmed yet for sentencing and a further hearing scheduled next week. She remains on bail.
