Former Theranos CEO Holmes guilty of fraud and conspiracy

In a case that exposed Silicon Valley’s culture of hubris and hype, Elizabeth Holmes was convicted Monday of duping investors into believing her startup Theranos had developed a revolutionary medical device that could detect a multitude of diseases and conditions from a few drops of blood.

A jury convicted the 37-year-old company founder on two counts of wire fraud and two counts of conspiracy to commit fraud after seven days of deliberation. The verdict followed a three-month trial featuring dozens of witnesses — including Holmes herself. She now faces up to 20 years in prison for each count, although legal experts say she is unlikely to receive the maximum sentence.

The jury deadlocked on three remaining charges. The split verdicts are “a mixed bag for the prosecution, but it’s a loss for Elizabeth Holmes because she is going away to prison for at least a few years,” said David Ring, a lawyer who has followed the case closely.

Federal prosecutors depicted Holmes as a charlatan obsessed with fame and fortune. In seven days on the witness stand, she cast herself as a visionary trailblazer in male-dominated Silicon Valley who was emotionally and sexually abused by her former lover and business partner, Sunny Balwani.

The trial also laid bare the pitfalls of one of the go-to moves of Silicon Valley entrepreneurs — conveying a boundless optimism regardless of whether it’s warranted, known as “fake it ‘til you make it.” That ethos helped hatch groundbreaking companies such as Google, Netflix, Facebook, and Apple — the latter co-founded by one of Holmes’ heroes, Steve Jobs.

Her conviction might lower the wattage — at least temporarily — on the brash promises and bold exaggerations that have become a routine part of the tech industry’s innovation hustle.

Holmes remained seated and expressed no visible emotion as the verdicts were read. She bowed her head several times before the jury was polled by US District Judge Edward Davila. After the judge left the courtroom to meet with jurors individually, Holmes got up to hug her partner, Billy Evans, and her parents before leaving with her lawyers.

Holmes did not respond to questions about the verdicts lobbed at her during a walk from the courthouse to the nearby hotel where she has stayed during jury deliberations.

She was to remain free on bond while awaiting sentencing, which will be determined by the judge.

In a written statement, US Attorney Stephanie Hinds thanked the jury for navigating the case through the pandemic and said Holmes must now be held “culpable” for her crimes. Hinds did not mention the jury’s decision to acquit Holmes on the four counts involving patient fraud.

The bold dream Holmes pursued when she founded Theranos in 2003 at the age of 19 had become a nightmare by the time she was indicted on felony charges in 2018.

During that span, Holmes went from an unknown to a Silicon Valley sensation who had amassed a $4.5 billion fortune on paper to a vilified failure. Her downfall was dissected in documentaries, books, podcasts and will soon be rehashed in a Hulu TV series called “The Dropout” starring Amanda Seyfried in the lead role.

Holmes set out to create a less painful, more convenient and cheaper way to scan for hundreds of diseases and other health problems by taking just a few drops of blood with a finger prick instead of inserting a needle in a vein. She aimed to upend an industry dominated by giant testing companies such as Quest Diagnostics and Labcorp, starting with setting up “mini-labs” in Walgreens and Safeway stores across the US that would use a small Theranos device called the Edison to run faster, less intrusive blood tests.

Holmes testified that Balwani let her down by failing to address the laboratory problems that he had promised to fix and, in the most dramatic testimony of the trial, alleged he had turned her into his pawn through a long-running pattern of abuse while exerting control over her diet, sleeping habits and friendships. This all occurred, she said, after being raped by an unnamed assailant while she was still enrolled at Stanford.