After seven days of deliberation, a jury found Holmes guilty of two counts each of wire fraud, and two of conspiracy to commit fraudulent conduct. The jury also acquitted Holmes, 37, on four additional counts of fraud and conspiracy. These included the allegations that she deceived patients who had paid for Theranos blood testing.
After three months of sitting through a complicated trial with 32 witnesses and reams upon reams, the jury voted in Holmes' favor. Although she could face up to 20 years imprisonment for each charge, legal experts believe that she will not receive the maximum sentence.
A federal judge expects to dismiss three of the remaining charges that were pending before the jury. This could be part of a mistrial ruling, which could happen as soon as next week. David Ring, a lawyer who closely followed the case, said that the split verdicts were "a mixed bag by the prosecution, but it is a loss for Elizabeth Holmes since she is going away prison for at least several years."
Federal prosecutors described Holmes as a charlatan, obsessed with fame and money. She presented herself in seven days as a witness and claimed that she was a visionary and trailblazer in Silicon Valley, which is male-dominated. Sunny Balwani, her ex-lover and business partner, also abused her emotionally and sexually.
The trial exposed the dangers of a swaggering strategy that many Silicon Valley entrepreneurs used -- conveying an inexplicable optimism regardless of its validity, also known as "fake IT 'til it makes it." This ethos helped to create groundbreaking companies like Google, Netflix and Facebook -- which was co-founded by Steve Jobs, one of Holmes' heroes.
Her conviction could lower the heat, at least temporarily, on the bold exaggerations and brazen promises that have become part of the tech industry’s innovation hustle.
Ellen Kreitzberg, Santa Clara University law professor and participant in the trial, predicted that the outcome of the trial "will send a signal to CEOs there are consequences for overstepping the bounds." She also believes that Silicon Valley's hyperbole will be sustained by greed.
Kreitzberg stated that investors will still want to make more on a promising idea. They will always seek the golden ring.
Holmes remained still and did not show any emotion during the reading of the verdicts. Before U.S. District Judge Edward Davila surveyed the jury, Holmes bowed several times. Holmes hugged her partner, Billy Evans and her parents after the judge had left the courtroom for individual meetings with jurors. She then left with her lawyers.
Evans, visibly shaken, entered the courthouse hallway after the verdict was read. He tried to regain his composure while taking a drink from the water fountain.
Holmes didn't respond to questions regarding the verdicts she received during her three-block walk to the courthouse from the hotel where she stayed during jury deliberations.
The judge will decide her sentencing. She was allowed to stay free on bail while she awaits that decision. The judge indicated that he would delay the sentencing of Balwani until the conclusion of another trial involving similar fraud charges. This separate trial involves Balwani's chief operating officer between 2009 and 2016. Balwani's trial will begin next month in San Jose's same courtroom that Holmes' legal story unfolded.
U.S. Attorney Stephanie Hinds, in a written statement thanked the jury for their help with the case during the pandemic. She stated that Holmes must now be held "culpable".
Holmes was convicted of embezzling investors but she was granted a reprieve by the jury regarding fraud allegations involving patients who submitted incorrect blood tests which could have endangered their health.
Ring stated that the charges against the patients were more difficult to prove because Holmes did not communicate directly with the patients as she did with investors.
The bold dream Holmes had when she founded Theranos at 19 years old was turned into a nightmare when she was arrested in 2018 on felony charges.
Holmes, who was a Silicon Valley star and had amassed $4.5 billion in paper wealth, became a public figure. Her fall from grace was documented in books, podcasts, and documentaries. It will be retold in "The Dropout," a Hulu TV series starring Amanda Seyfried as the main role.
Holmes wanted to make it easier, quicker, and more affordable to test for hundreds of illnesses and other problems. Holmes used a finger prick to take a few drops from blood instead of inserting needles into veins. Her goal was to disrupt an industry that is dominated by large testing companies like Quest Diagnostics or Labcorp. She started with "mini-labs" at Walgreens and Safeway across the U.S., which would use a small Theranos device called Edison to run faster and more intrusive blood tests.
The idea and Holmes' presentation enticed wealthy investors who wanted to purchase an early stake in this game-changing company. It enabled Theranos to raise over $900 million from smart billionaires like Rupert Murdoch, software magnate Larry Ellison and well-to-do families like the Waltons of Walmart or the DeVos clan behind Amway.
Holmes was also attracted to a highly connected board, which included Henry Kissinger, the late U.S. secretary of state, and Richard Kovacevich, former CEO of Wells Fargo. In an on-stage presentation, she charmed former President Bill Clinton and impressed Joe Biden who extolled her during a 2015 visit to a Theranos laboratory.
Theranos' blood testing technology was producing false results, something that most people didn't know. Patients were forced to have regular blood draws, instead of the promised fingersticks. This led to Theranos secretly testing those samples with conventional machines in a traditional laboratory setting. The trial evidence also revealed that Holmes lied about alleged deals Theranos had made with large drug companies like Pfizer, and the U.S. Military.
After explosive articles in The Wall Street Journal, and a regulatory audit by Theranos, the deception was exposed in 2015. This led to Theranos' eventual collapse.
Holmes admitted that she sometimes regretted her handling of certain issues. However, she frequently claimed that she had forgotten about key events. She maintained that she believed Theranos was at the point of improving its technology and never gave up on it.
Instead, she blamed Balwani who she had secretly lived with when they ran Theranos.
Holmes testified that Balwani failed to correct laboratory problems. In the most dramatic testimony of trial, Holmes claimed that he had made her his pawn by a long-running pattern and abuse, while also controlling her diet, sleeping patterns, and friendships. She claimed that she was raped in her Stanford classroom by an unknown assailant.