Youngest self-made female billionaire and Theranos founder Elizabeth Holmes convicted of fraud

By Rek Hanibal Published on January 04, 2022
Youngest self-made female billionaire and Theranos founder Elizabeth Holmes convicted of fraud

Prosecutors said Holmes knowingly lied about technology she said could detect diseases with a few drops of blood. Jurors found Holmes guilty of four charges, including conspiracy to commit fraud against investors and three counts of wire fraud.

She denied the charges, which carry a maximum prison term of 20 years each. Holmes was not taken into custody, with no date confirmed yet for sentencing and a further hearing scheduled next week. She faced 11 charges in total and was found not guilty of four charges relating to defrauding the public.

The split verdict came after the judge said the jury, having deliberated for seven days, could deliver a partial judgment after reaching a consensus on another three counts. Theranos, at one point valued at $9bn (£6.5bn), was once the darling of Silicon Valley.

The firm promised it would revolutionise the healthcare industry. Still, its claims began to unravel in 2015 after a Wall Street Journal investigation reported that its core blood-testing technology did not work. For nearly four months at trial, the jury of eight men and four women were presented with two starkly different accounts of the former self-made billionaire, whose downfall shook Silicon Valley.

Calling some 30 witnesses, the prosecution sought to prove that Ms Holmes knew the product she was selling to investors was a sham but remained hell-bent on the firm's success.

At trial, multiple lab directors testified they told Holmes about Theranos' technology flaws but were instructed to downplay their concerns. At the same time, they said, Holmes told investors the technology was operating as planned.

Holmes "chose fraud over business failure. She chose to be dishonest with investors and patients", said prosecutor Jeff Schenk in closing arguments. "That choice was not only callous, but it was also criminal."

The defence countered with descriptions of a dedicated and driven businesswoman, making waves in a male-dominated industry. Testifying in her defence, Holmes acknowledged Theranos' operation mistakes but maintained she never knowingly defrauded patients or investors.

The defence also blamed Ramesh "Sunny" Balwani, Holmes' former business partner and long-term boyfriend. At trial, Holmes accused Mr Balwani, 19 years her senior, of emotional and sexual abuse - allegations he denies.

Rek Hanibal

Rek Hanibal

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