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Former Theranos CEO Elizabeth Holmes Found Guilty of Fraud

Elizabeth Holmes Theramos
Elizabeth Holmes, the disgraced CEO of blood-testing company Theranos, was found guilty of defrauding investors. Credit: Fortune, CC BY-NC-ND 2.0

Elizabeth Holmes, the former CEO of blood-testing company Theranos, was found guilty of four out of eleven charges in court on Wednesday night.

Holmes was found guilty on one count of conspiracy to defraud investors and three wire fraud counts linked to individual investors. The disgraced former CEO could face up to 20 years in prison and a quarter of a million-dollar fine in addition to restitution for each count.

The jury decided she was not guilty on three charges of defrauding patients and one charge of conspiracy to defraud patients. They also returned no verdict on three charges related to defrauding investors. Judge Edward Davila is anticipated to call a mistrial on these charges.

Holmes left the courthouse after the verdict was read with her partner, Billy Evans, and her family by her side. She did not offer any response to the press.

U.S. Attorney Stephanie Hinds celebrated the decision:

“The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacles,” she said, in a statement read by a spokesperson in front of the courthouse. “The guilty verdicts, in this case, reflect Ms. Holmes’ culpability in this large-scale investor fraud, and she must now face sentencing for her crimes.”

The rise and fall of Elizabeth Holmes

In 2003 — when Holmes was just 19 — she dropped out of Stanford University and created Theranos. Holmes started up the company out of the desire to transform blood testing, telling the public that her technology would be able to test for serious conditions like cancer with only a single drop of blood.

The blood samples were gleaned from a finger prick and transferred to a miniaturized vessel dubbed the “nanotainer.” The blood was then analyzed by a machine called the “Edison.” The patent for the Edison claimed the technology would take the sample and run blood tests on it based on instructions it received from the internet, cycling the results back through the internet and comparing them to other medical data.

After Holmes began a retail partnership with Walgreens in 2013, Theranos caught the eye of a slew of high profile political figures, including former Secretaries of State Henry Kissinger and George Shultz, and future Defense Secretary James Mattis. Holmes was quickly embraced as an innovator, gracing the cover of Forbes’s 2014 “Forbes 400” with a headline that read “Elizabeth Holmes Leads the Class of 2014.”

Holmes was wearing a black turtleneck, a reference to Apple’s founder and former CEO Steve Jobs, a figure to whom she quickly garnered comparisons. At one point, Theranos was valued at $9 billion.

But Holmes’ fall was as sudden as her rise.

In 2015 the Wall Street Journal had published a bombshell investigation shattering the visionary image of Theranos that Holmes and its board had cultivated. The report alleged that the technology was faltering, and that the Edison was highly inaccurate. The technology had not been peer reviewed, and Theranos claimed it had its own data that justified the company’s claims about its blood testing ability.

The exposé led to an avalanche of backlash. One of the company’s investors, Partner Fund Management, sued them for their $96 million investment. The U.S. government then revoked the company’s blood-testing license and banned Holmes from owning or operating a laboratory for two years. Theranos ultimately settled charges of massive fraud with the Securities and Exchange Commission before its dissolution in 2018.

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