Former Theranos CEO Elizabeth Holmes was convicted on four counts of fraud and conspiracy Monday, ending a lengthy trial that has captivated Silicon Valley.
The jury found her not guilty of four other felony charges. On the three remaining charges, the jury was deadlocked.
Holmes remained seated and expressed no emotion as the verdicts were read. Her partner, Billy Evans, likewise remained still.
A once-celebrated entrepreneur, Holmes was accused of duping investors and patients about a flawed blood-testing technology that she hailed as a medical breakthrough.
Nine of the 11 counts against her were fraud charges and two revolved around a conspiracy to commit fraud from 2010 to 2015. During that time, Holmes became a Silicon Valley sensation worth $4.5 billion US on paper, based on her promise that Theranos’ technology would revolutionize health care.
Compelling concept — which failed
She could face more than 20 years in federal prison.
“For all intents and purposes, the government only needs a guilty verdict on one count,” said Keri Curtis Axel, a former federal prosecutor now working as a trial lawyer at the Los Angeles law firm Waymaker, ahead of the verdict.
After starting Theranos in 2003 as a 19-year-old college dropout, Holmes began working on a technology that she repeatedly promised would be able to scan for hundreds of health issues with just a few drops of blood taken with a finger prick. Conventional methods require a needle inserted into a person’s vein to draw a vial of blood for each test, which must then be carried out at large laboratories.
Holmes said she believed she could provide more humane, convenient and cheaper blood tests with “mini-labs” in Walgreens and Safeway stores across the U.S., using a small testing device dubbed “Edison” in homage to the famous inventor.
The concept proved to be compelling. Theranos raised more than $900 million US from a long list of elite investors, including savvy billionaires such as media mogul Rupert Murdoch and software magnate Larry Ellison.
But most people didn’t know that the Theranos blood-testing technology kept producing misleading results that led the company to secretly rely on conventional blood testing. Evidence presented at the trial also showed Holmes lied about purported deals that Theranos had reached with big drug companies, such as Pfizer, and with the U.S. military.
In 2015, a series of explosive articles in The Wall Street Journal and a regulatory audit of Theranos’ lab uncovered potentially dangerous flaws in the company’s technology, leading to the company’s eventual collapse.