Theranos founder Elizabeth Holmes, the enigmatic wunderkind who shot to fame with a supposedly revolutionary blood-testing machine that turned out to be useless, was found guilty on four charges following an epic federal trial in which the jury deliberated for seven days.
Months of testimony in a San Jose courtroom—including by Holmes herself—centered on allegations that she perpetrated a massive fraud at the startup she founded after dropping out of Stanford at age 19. Prosecutors alleged that she misrepresented Theranos’ technology to patients, doctors, and investors, and prematurely deployed blood tests in the field.
Holmes, 37, faced nine counts of wire fraud and two counts of conspiracy to commit wire fraud, carrying a possible sentence of 20 years in prison per count. In the end, jurors were unable to reach a verdict on three of the counts. They found her guilty on four charges and not guilty on the rest.
The four guilty counts all related to investors who were allegedly defrauded, including a hedge fund, a high-powered attorney, and most notably, the family of President Trump’s former Secretary of Education Betsy DeVos.
Holmes was acquitted of the charges directly involving patients, while the jury deadlocked on three of the wire fraud counts.
She is set to be sentenced later this year.
Holmes and Sunny Balwani—Theranos’ former chief operating officer and her ex-lover—were indicted in June 2018. They were initially scheduled to be tried jointly, but the cases were later severed. Holmes’ trial was delayed several times owing to the pandemic and her pregnancy; she gave birth to her first child with the hotel heir Billy Evans in July.
Balwani is expected to stand trial next year.
Part of Holmes’ defense included pinning blame on Balwani, whom she described as an abusive lover who undermined her “capacity to make decisions.”
In documents filed before the trial began, Holmes’ attorneys argued that Balwani—who is 19 years her senior—“controlled what she ate, how she dressed, how much money she could spend, [and] who she could interact with.”
She echoed many of those claims when she unexpectedly testified during the trial and alleged that Balwani had bullied her and forced her to have sex with him.
“He told me that I didn’t know what I was doing in business, that my convictions were wrong, that he was astonished at my mediocrity,” she said.
Balwani vehemently denied wrongdoing in his own pre-trial legal filings.
Prosecutors sought to keep the focus on Holmes’ business transgressions. Holmes and Balwani’s indictment alleged that they had used “advertisements and solicitations to encourage and induce doctors and patients to use Theranos’s blood testing laboratory services,” even though they knew the tests were not consistently accurate.
The company’s former lab director Dr. Adam Rosendorff testified that Theranos modified blood testing devices made by competitors in order to disguise its faulty technology, and that Holmes launched the startup’s machines in Walgreens before they were ready.
When he confronted her over his concerns, Rosendorff said, Holmes began “trembling a little bit, her voice was shaky, it was breaking up… She didn’t seem surprised, just nervous and upset, she wasn’t her usual self.
“I came to believe the company cares more about PR and fundraising than it cares about patient care,” he added.
Some patients have alleged that they received inaccurate results after Theranos tested their blood. One woman claimed she received results while pregnant that falsely indicated she had miscarried, leading her to alter her medications.
Theranos allegedly curtailed scrutiny into its technology through a culture of secrecy and fear. That caused harm inside the company, too. Theranos’ former chief scientist Ian Gibbons died by suicide in 2013, just before he had been slated to testify in a patent dispute involving the business.
“It was hell for him to work there. It was complete hell,” his widow, Rochelle Gibbons, told The Daily Beast earlier this year. “I think that he was very confused about why he was being treated so badly.”
Holmes acknowledged during the trial that she had made some mistakes, like participating in a now-infamous Fortune cover story, which claimed that Theranos’ blood analysis machines were comparable to others in the industry. But she insisted that she believed the technology would work.
Investors had also bought into her vision. The company raised more than $700 million, including from Rupert Murdoch, Trump’s former education secretary Betsy DeVos, and members of the Walton family.
In 2015 Forbes labeled Holmes the world’s youngest self-made female billionaire, with a net worth of $4.5 billion, and placed her on its cover in her signature black turtleneck, a la Steve Jobs.
That ascent abruptly collapsed following a series of investigative reports from The Wall Street Journal, which Theranos had fought aggressively to obstruct. Holmes acknowledged in her testimony that she tried to enlist Rupert Murdoch, executive chairman of the Journal’s owner, to kill the piece.
Holmes’ decision to testify was just one of the trial’s wild turns. In one instance, she broke down while reading bizarre, intimate texts she and Balwani had exchanged, including one in which he wrote, “U r God’s tigress and warrior. You are extraordinary.”
“Coming from my tiger means the whole universe to me,” she replied.
The trial generated immense attention both from the media and the general public. Several women even showed up dressed as Holmes look-alikes.
Holmes’ attorneys tried to emphasize throughout the trial that their client sincerely believed in her mission to democratize healthcare.
“Elizabeth Holmes did not go to work every day intending to lie, cheat and steal,” her lawyer Lance Wade told the jury.
Evidently, they didn’t fully buy that pitch.