Elizabeth Holmes Found Guilty of Four Charges of Fraud


Ms. Holmes, the founder of the blood testing start-up Theranos, was convicted of four of the 11 charges of fraud for lying to investors, patients and others.CreditCredit…Jim Wilson/The New York Times

SAN JOSE, Calif. — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, was found guilty of four of 11 charges of fraud on Monday, in a case that came to symbolize the pitfalls of Silicon Valley’s culture of hustle, hype and greed.

Ms. Holmes, who had once promised to revolutionize health care, was the most prominent executive to field fraud accusations in a generation of high-flying, money-losing start-ups. A jury of eight men and four women took 50 hours over seven days of deliberations to reach a verdict, convicting her of three counts of wire fraud and one count of conspiracy to commit wire fraud by lying to investors to raise money for her company.

Ms. Holmes was found not guilty on four other counts related to defrauding patients who had used Theranos’s blood tests. The jury was unable to reach a verdict on three counts of deceiving investors, for which Judge Edward J. Davila of California’s Northern District said he planned to declare a mistrial.

Each count carries a maximum sentence of 20 years in prison, terms that are likely to be served concurrently. Ms. Holmes, 37, is expected to appeal. A sentencing date is expected to be set at a hearing on the three hung charges next week.

While the verdict was read, Ms. Holmes — who had falsely claimed that Theranos’s blood tests could detect a variety of ailments with just a few drops of blood — sat motionless. Then she gathered her belongings and whispered to her lawyer. She went down the row of family and friends in the court gallery behind her, hugging each one before leaving through a side door.

“It’s been a long case,” Judge Davila told the jury. “We collectively have been through many things.”

Stephanie Hinds, a U.S. attorney, said in a statement that the guilty verdicts reflected Ms. Holmes’s “culpability in this large-scale investor fraud.”

The verdict stands out for its rarity. Few technology executives are charged with fraud and even fewer are convicted. If sentenced to prison, Ms. Holmes would be the most notable female executive to serve time since Martha Stewart did in 2004 after lying to investigators about a stock sale. And Theranos, which dissolved in 2018, is likely to stand as a warning to other Silicon Valley start-ups that stretch the truth to score funding and business deals.

The mixed verdict suggested that jurors believed the evidence presented by prosecutors that showed Ms. Holmes lied to investors about Theranos’s technology in the pursuit of money and fame. They were not swayed by her defense of blaming others for Theranos’s problems and accusing her co-conspirator, Ramesh Balwani, the company’s chief operating officer and her former boyfriend, of abusing her. They were also not swayed by the prosecutor’s case that she had defrauded patients.

On Monday, jurors told the court that they were deadlocked on three of the charges of defrauding investors. Judge Davila pushed them to continue deliberating, but they were unable to agree.

The verdict arrived in a frenzied period for the tech industry, with investors fighting to get into hot deals and often ignoring potential red flags about the companies they were putting money into. Some have warned that more Theranos-like disasters loom.

In recent years, tales of start-up chicanery, from the bungled initial public offering of WeWork to the aggressive boundary-pushing tactics of Uber, have not slowed the flow of money toward charismatic founders spinning tales of business success. Those downfalls captured the public’s attention, but did not result in criminal charges.

Yet the Justice Department under President Biden has renewed its focus on white-collar crimes. “We will urge prosecutors to be bold,” Lisa O. Monaco, the deputy attorney general, recently said in a speech. “The fear of losing should not deter them.”

Ms. Holmes’s conviction sends a message to other founders and executives to be careful about their statements to investors and the public, said Jessica Roth, a law professor at Cardozo School of Law and former federal prosecutor in the Southern District of New York.

It “shines a light on the importance of drawing a distinction between truth and optimistic projections — and keeping that clear in one’s mind,” she said.

Ms. Holmes rose to prominence by mimicking the disruptive change-the-world chutzpah of Silicon Valley heroes like Steve Jobs — a playbook that has turned companies like Apple, Tesla, Google and Facebook into some of the most valuable in the world.

In the process, she captured the attention of heads of state, top business leaders and wealthy families with idealistic plans to revolutionize the health care industry. She traveled the world on private jets, was feted with awards and glowing magazine cover stories and lauded as the world’s youngest self-made female billionaire.

But she crossed into fraud when she lied about the accuracy, types and number of tests Theranos’s machines could do to raise funding and secure business deals.

“That’s a crime on Main Street and it’s a crime in Silicon Valley,” Robert Leach, an assistant U.S. attorney, said in opening statements at the trial’s start.

The verdict concludes nearly four months of proceedings that alternated between exhilarating and plodding. There were delays because of a coronavirus scare, a burst water pipeline, technology problems in the courtroom and juror travel. One juror was dismissed for playing Sudoku and another for her Buddhist faith. Crowds of spectators, many of whom followed the Theranos saga via podcasts, documentaries, books and news articles, waited for hours for a spot in the courtroom’s limited seats.

Inside, jurors heard from dozens of witnesses and viewed hundreds of pieces of evidence used in support of prosecutors’ argument that Ms. Holmes knowingly misled investors and patients on her rise to fame and fortune.

Witnesses included James Mattis, the former defense secretary who sat on Theranos’s board, as well as Lisa Peterson, who managed money for the wealthy family of a former education secretary, Betsy DeVos, and invested $100 million in Theranos. Prominent investors including Rupert Murdoch and Larry Ellison, as well as two former secretaries of state, George Shultz and Henry Kissinger, who sat on its board, were discussed but never called to the stand.

The case’s evidence outlined Ms. Holmes’s role in faked demonstrations, falsified validation reports, misleading claims about contracts, and overstated financials at Theranos. Jurors heard recordings and watched videos of Ms. Holmes making inflated or misleading claims about Theranos.

Before it shut down in 2018, Theranos voided two years’ worth of its blood tests. It paid to settle several investor lawsuits, as well as fraud charges by the Securities and Exchange Commission.

But prosecutors argued that Ms. Holmes’s actions went beyond those punishments — they were criminal. She led investors to lose hundreds of millions of dollars and patients to get unreliable test results, they said.

“At so many of the forks in the road, she chose the dishonest path,” John Bostic, an assistant U.S. attorney, said in closing arguments.

In her defense, Ms. Holmes’s lawyers tried to discredit testimony from whistle-blowers, attacked investors for not doing more research into Theranos and said Ms. Holmes’s failures were not a crime.

Ms. Holmes capped the proceedings by taking the stand. Over seven days of testimony, she alternated between accepting responsibility for certain missteps and deflecting blame for other problems to colleagues.

She said she believed that Theranos’s tests worked and had relied on the expertise of more qualified people running the company’s lab. And she used her charisma to sell jurors on the same vision of the future that, years earlier, had helped her win over investors, world leaders and the press.

“I wanted to talk about what this company could do a year from now, five years from now, 10 years from now,” Ms. Holmes said. “I wanted to talk about what was possible.”

Ms. Holmes’s argument that her optimistic projections were no different than that of other Silicon Valley companies contradicted the government’s evidence, which was consistent with traditional fraud cases, Ms. Roth said.

“If other founders and executives are engaged in the kinds of deceit that was alleged and proven by considerable evidence in this case, then they should be concerned,” she said.

Most strikingly, Ms. Holmes accused Mr. Balwani of emotional and sexual abuse. The pair dated in secret for more than a decade, even owning an estate in Atherton, Calif., together. Ms. Holmes said Mr. Balwani, who is around 20 years older, controlled every aspect of her life, including her schedule, self-presentation and time spent with her family. She also accused him of forcing her to have sex with him. Mr. Balwani has denied the allegations.

That testimony, delivered through tears, threatened to turn the tide against the prosecutor’s case by appealing to the jury’s emotions and painting Ms. Holmes as a victim. But it was a risky strategy, experts have said, particularly since Ms. Holmes did not provide an expert witness to put her accusations in context of the wire fraud charges.

Mr. Balwani, known as Sunny, will stand trial this year. He has also pleaded not guilty.

Ms. Holmes left the courthouse after dark on Monday, holding hands with her mother and partner. Cameras surrounded them, lighting up the dark sidewalk. As reporters shouted questions, Ms. Holmes avoided eye contact and stared straight ahead.

Elizabeth Holmes, right, with her attorney, Kevin Downey, after the first day of federal court hearings in May.Credit…Kate Munsch/Reuters

The fraud trial of Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, began with jury selection on Aug. 31 and opening statements on Sept. 8. In the weeks that followed, jurors heard from 32 witnesses, including Ms. Holmes, in proceedings that featured dramatic allegations of abuse and long days discussing scientific terminology.

Here were three of the key moments from the trial.

Faked pharmaceutical validation reports

On Oct. 12, prosecutors showed a key piece of evidence: Theranos’s technology validation reports, which bore the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline.

Theranos had used the reports to solicit investors and woo commercial partners, even though the drug companies had neither prepared nor approved the reports. Prosecutors repeatedly pointed to the documents as a clear-cut example of fraud.

On Nov. 23, Ms. Holmes, 37, said on the stand that she had added the logos to the reports. It was the first time she acknowledged any personal involvement in the documents.

But Ms. Holmes said she had not intended to deceive anyone. She said that she added the logos to the reports “because this work was done in partnership with those companies and I was trying to convey that.”

Accusations of abuse

Ms. Holmes teared up and her voice shook as she accused Ramesh Balwani, Theranos’s former chief operating officer and her ex-boyfriend, of emotional and physical abuse in her testimony on Nov. 29.

The bombshell accusations came at the end of her direct examination. Ms. Holmes said Mr. Balwani, who is 20 years older than her, controlled her schedule, criticized her mannerisms and forced her to have sex with him. Mr. Balwani, who faces his own fraud trial next year and has pleaded not guilty, has denied the accusations.

Ms. Holmes also testified that Mr. Balwani did not control her interactions with investors, journalists or executives. But, she said, “he impacted everything about who I was, and I don’t fully understand that.”

Prosecutors later told jurors to put the abuse accusations out of their minds and focus on the fraud charges instead.

“The case is about false statements made to investors and false statements made to patients,” Jeff Schenk, an assistant U.S. attorney and a lead prosecutor, said. “You do not need to question whether that abuse happened.”

Dueling narratives in closing arguments

For Ms. Holmes, everything came down to how the jury interpreted her intent.

During prosecutors’ closing argument on Dec. 16, Mr. Schenk argued that Ms. Holmes deliberately deceived investors, patients and advertisers with the pharmaceutical validation reports, faked technology demonstrations and inaccurate marketing materials.

“She chose fraud over business failure,” Mr. Schenk said.

But Kevin Downey, a lawyer for Ms. Holmes, countered in the defense’s closing argument that she had acted in good faith. He said that Ms. Holmes had believed her employees’ positive feedback about Theranos’s technology, that investors had known their bets were risky and that her statements had been misunderstood.

“She believed she was building a technology that would change the world,” Mr. Downey said.

Ms. Holmes leaving the courthouse in San Jose, Calif., on Monday.Credit…Jim Wilson/The New York Times

Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, now awaits sentencing after being found guilty of four of 11 charges of fraud on Monday.

Ms. Holmes, 37, left the San Jose, Calif., courtroom through a side door after the verdict was read in the case, which was closely scrutinized as a commentary on Silicon Valley. She was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty on four other counts. The jury was unable to reach a verdict on three counts, which were set aside for later.

After the verdict was read, defense and prosecution lawyers discussed plans for Ms. Holmes’s sentencing, the status of her probation and the fate of the three hung charges. Judge Edward J. Davila of the Northern District of California, who oversaw the case, said he planned to declare a mistrial on those charges, which the government could choose to retry. The parties agreed that Ms. Holmes would not be taken into custody on Monday.

A sentencing date is expected to be set at a hearing on the three hung charges next week.

Ms. Holmes can appeal the conviction, her sentence or both. She will also be interviewed by the U.S. Probation Office as it prepares a pre-sentence report. A conference will be held next week on the three counts in which the jury could not reach a verdict.

Each count of wire fraud carries up to 20 years in prison, though Ms. Holmes is unlikely to receive the maximum sentence because she has no prior convictions, said Neama Rahmani, the president of the West Coast Trial Lawyers and a former federal prosecutor.

But he said her sentence was likely to be on the higher end because of the amount of the money involved. Ms. Holmes raised $945 million for Theranos during the start-up’s lifetime and those investments were ultimately wiped out.

Elizabeth Holmes, the founder of the blood testing start-up Theranos, faced 11 counts of fraud for lying to investors, patients and others to raise money and the profile for her company. (An additional charge of wire fraud against a patient was dropped during the trial.)

Here’s what jurors decided:

Count one of conspiring to commit wire fraud against investors in Theranos between 2010 and 2015: Guilty.

Count two of conspiring to commit wire fraud against patients who paid for Theranos’s blood testing services between 2013 and 2016: Not guilty.

Count three of wire fraud in connection with a wire transfer of $99,990 on or about Dec. 30, 2013: No verdict.

Count four of wire fraud in connection with a wire transfer of $5,349,900 on or about Dec. 31, 2013: No verdict.

Count five of wire fraud in connection with a wire transfer of $4,875,000 on or about Dec. 31, 2013: No verdict.

Count six of wire fraud in connection with a wire transfer of $38,336,632 on or about Feb. 6, 2014: Guilty.

Count seven of wire fraud in connection with a wire transfer of $99,999,984 on or about Oct. 31, 2014:Guilty.

Count eight of wire fraud in connection with a wire transfer of $5,999,997 on or about Oct. 31, 2014: Guilty.

Count nine was dropped.

Count 10 of wire fraud in connection with a patient’s laboratory blood test results on or about May 11, 2015: Not guilty.

Count 11 of wire fraud in connection with a patient’s laboratory blood test results on or about May 16, 2015: Not guilty.

Count 12 of wire fraud in connection with a wire transfer of $1,126,661 on or about Aug. 3, 2015: Not guilty.

Theranos’s headquarters in Palo Alto, Calif., in 2015.Credit…Jim Wilson/The New York Times

For years, the blood testing start-up Theranos was a darling of Silicon Valley.

Its founder, Elizabeth Holmes, started the company in 2003, dropping out of Stanford a year later. The promise of Theranos was simple: The start-up would revolutionize health care with cheaper, easier blood tests that took only a few drops of blood to diagnose conditions as varied as prostate cancer and pregnancy.

Based on that promise, Ms. Holmes raised $945 million from investors and Theranos signed partnerships with Walgreens and Safeway. At its peak, Theranos was valued at $9 billion. That made Ms. Holmes, who owned a substantial portion of the company, a billionaire on paper.

Then in 2015, The Wall Street Journal revealed that Theranos relied on third-party machines for many of its blood tests rather than using its own technology. The implication: Theranos was built atop wildly misleading claims.

At first, Ms. Holmes stuck by Theranos. She went on “Mad Money” on CNBC in 2015 and told the host Jim Cramer: “First they think you’re crazy, then they fight you, then you change the world.”

But in January 2016, the Centers for Medicare and Medicaid Services, a federal agency within the Department of Health and Human Services, notified Theranos that a November 2015 lab inspection had uncovered “deficient practices” that posed “immediate jeopardy to patient health and safety.” In June 2016, Walgreens ended its Theranos partnership, suing the company for $140 million and eventually voiding two years of blood tests.

In 2018, Ms. Holmes settled with the Securities and Exchange Commission over fraud charges. She was then indicted by the federal government on charges of wire fraud and conspiracy to commit wire fraud.

Later that year, with Ms. Holmes no longer at the helm, Theranos officially shut down.

Elizabeth Holmes with her partner, Billy Evans, for her trial on Sept. 8 in San Jose, Calif.Credit…Mike Kai Chen for The New York Times

As Elizabeth Holmes, the founder of the blood testing start-up Theranos, arrived in court for each day of her fraud trial, she was accompanied by an entourage of supporters, including family members and former sorority sisters from her time at Stanford University.

Along with her mother, Noel Holmes, another person was a consistent presence for Ms. Holmes at the trial: Billy Evans, her partner.

Mr. Evans’s family founded the Evans Hotel Group, a hotel chain in Southern California. He graduated from the Massachusetts Institute of Technology in 2015 and worked at a tech start-up until early 2019, according to his public LinkedIn page.

Not much is publicly known about Ms. Holmes’s relationship with Mr. Evans. The two were first seen together at the Burning Man festival in 2018, the year that Theranos shut down. Mr. Evans and Ms. Holmes, 37, had a child together in July; she often toted a diaper bag in court.

Mr. Evans often sat with the rest of Ms. Holmes’s family in their reserved row in the courtroom in San Jose, Calif., occasionally leaning over to confer with Noel Holmes during testimony. He and the other members of Ms. Holmes’s entourage kept to themselves and did not interact with the press or the public. He has declined to comment on the trial.

Elizabeth Holmes at the Theranos Lab in 2015.Credit…Carlos Chavarria for The New York Times

It was Silicon Valley’s trial of the decade.

Since opening statements began on Sept. 8, Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, has been standing trial in federal court in San Jose, Calif., for 11 counts of fraud (a 12th count was removed). She was found guilty on four counts.

Her case has captivated the public — and spawned books, documentaries and even a fan club for Ms. Holmes, 37 — because she was a young female entrepreneur in heavily male Silicon Valley and because she appeared to push the boundaries of start-up culture and hubris to the limit.

Her story initially seemed like the stuff dreams are made of. Ms. Holmes dropped out of Stanford University at 19 and founded Theranos, which promised to decipher people’s health problems with just a drop of their blood. The company raised $945 million from famous venture capitalists and from powerful tech and media moguls such as Larry Ellison and Rupert Murdoch. At its peak, Theranos was valued at $9 billion. Ms. Holmes was lauded as one of the youngest self-made female billionaires.

But it all came crashing down after a 2015 investigation from The Wall Street Journal found that Theranos’s blood-testing technology didn’t work. Theranos shut down in 2018.

Ms. Holmes was on trial over a central issue: Did she intentionally mislead doctors, patients and investors as she sought investments and partnerships?

The prosecution spent weeks arguing that she purposely deceived investors and others while knowing that Theranos’s blood tests were often inaccurate and that the company relied on third-party commercial machines. In opening statements, Ms. Holmes’s lawyers asserted that she was simply a hardworking entrepreneur whose failure to achieve lofty aims did not constitute a crime.

Ms. Holmes vocally defended herself in the media after The Wall Street Journal’s revelations about Theranos. She continued that stance during her testimony in court.

The trial played out inside a courtroom presided over by Judge Edward J. Davila of the U.S. District Court for the Northern District of California, with no live broadcast of the proceedings.

Elizabeth Holmes entering federal court in San Jose, Calif., this month.Credit…Justin Sullivan/Getty Images

After more than three months of testimony, a jury of eight men and four women has decided the fate of Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, who faces 11 counts of fraud.

The jury was chosen over three days in September when nearly 200 Northern California residents were winnowed down into a pool of 12 jurors and five alternates. Given the prominence of this case, prosecutors and defense lawyers had a difficult time selecting an impartial jury.

Potential jurors were quizzed about their familiarity with Theranos and its rise and fall, which had been widely covered by the news media and had spawned a book, a documentary and two podcasts. One potential juror, who was a producer at a radio news show, was excused because his job exposed him to the news, while another was excused for having seen a Theranos documentary.

Lawyers also screened out jurors whose experiences with domestic abuse could sway their view of Ms. Holmes’s case. The defense had indicated in pretrial filings that Ms. Holmes would accuse Ramesh Balwani, Theranos’s former chief operating officer and her former boyfriend, of emotionally and physically abusing her.

The final jury was made up of seven men and five women. But once the trial began, that composition changed.

One juror was excused on the second day of the trial because she was not able to change her work schedule. Another was excused in the fifth week because she said her Buddhist faith would not allow her to vote to convict Ms. Holmes. A third was excused after another juror reported her for playing Sudoku while the court was in session.

All three dismissals were women. That left the jury at eight men and four women.

The largely male composition could work in Ms. Holmes’s favor, legal experts said. That dynamic may be compounded by Ms. Holmes’s testimony of domestic abuse, the experts said.

“Women tend to be more judgmental of other women,” said Christina Marinakis, a jury consulting adviser at the trial services firm IMS Consulting & Expert Services. “The men, especially given her age and young appearance, may take more of a fatherly approach.”

Elizabeth Holmes and her partner, Billy Evans, leaving court after she testified last month.Credit…Jim Wilson/The New York Times

For seven days, Elizabeth Holmes took the stand to defend herself.

Nearly three months into her fraud trial, Ms. Holmes, the founder of the blood testing start-up Theranos, got the chance to testify, starting on Nov. 19. Her defense boiled down to two major themes: Her actions were misunderstood, she said. Others around her — most notably Ramesh Balwani, Theranos’s former chief operating officer and her former boyfriend — were responsible for the company’s failure, she said.

And finally, she implied, just because Theranos failed did not mean she had committed fraud.

Ms. Holmes’s testimony was among the first times she had told her side of the story about Theranos’s rise and fall. The Silicon Valley company raised $945 million from investors by touting supposedly revolutionary blood-testing technology, but collapsed after those claims were shown to be false. Ms. Holmes, 37, was charged with 11 counts of wire fraud and conspiracy to commit wire fraud. She was found guilty on four of the charges.

Under direct examination, Ms. Holmes reframed what prosecutors had said were examples of fraud. She said she had personally added the logos of pharmaceutical companies to reports that seemingly validated Theranos’s devices, when in reality the drug makers had recommended against using Theranos’s technology. But she said she had added the logos “because this work was done in partnership with those companies” and had not tried to deceive anyone.

She also said she had concealed Theranos’s use of third-party blood-testing devices — but to protect the modifications her company had made to them, so other companies could not copy them.

Ms. Holmes also blamed others for Theranos’s problems. She said others had overseen Theranos’s clinical lab and its commercial partnerships. She highlighted positive reports from her senior scientists, saying she had thought the devices “performed well.” Ms. Holmes could not have deceived others about the technology’s shortcomings because she herself believed it worked, her lawyers implied.

She especially pointed the finger at one person: Mr. Balwani, who faces trial on similar charges later this year. Ms. Holmes said he had emotionally and physically abused her during their decade-long secret relationship, allegations that he has denied. Ms. Holmes said he had controlled her schedule and diet, kept her from her family and forced her to have sex.

Ms. Holmes conceded that Mr. Balwani had not controlled her interactions with investors or others she is accused of defrauding, but said his influence over her had been so deep that she did not know how to quantify it.

“He impacted everything about who I was, and I don’t fully understand that,” she said.

Sunny Balwani leaving federal court in San Jose, Calif., in 2019.Credit…Stephen Lam/Reuters

Who is Sunny Balwani, Elizabeth Holmes’s former right hand at Theranos and her former boyfriend? In her testimony, Ms. Holmes has accused Mr. Balwani of emotionally abusing her and controlling her, suggesting that she was manipulated.

Very little is known of Mr. Balwani, including why he is called “Sunny.” His given name is Ramesh, which was what he was called in a handful of stories and news releases in 1999, when he was a dot-com guy. It was also on his divorce papers from a Japanese artist in 2002. By the time he was co-authoring patents at Theranos a decade later, he was simply Sunny.

Mr. Balwani’s early career was in software. He was a Northern California sales manager for Microsoft, selling the company’s products to executives at other firms. On Oct. 4, 1999, when the dot-com boom was roaring, he joined a start-up called CommerceBid.com as president.

CommerceBid built platforms that enabled businesses to pit suppliers against each other to drive down costs. That idea seemed to have unlimited potential, and CommerceBid did not even make it to its first birthday before it was bought by another company in the space, called Commerce One, for $225 million. A few weeks later, Commerce One, whose shares were publicly traded, was worth $20 billion.

Then the collapse came. A recession forced businesses to cut spending, and executives wondered if maybe the technology did not work well in any case. By 2004, Commerce One was worth nothing. It was a routine dot-com rags-to-riches-to-rags story, hardly even remembered among the bigger flameouts of the era.

Failure in Silicon Valley has been considered a virtue because it teaches valuable lessons. But it often can be rewarding in its own right. Mr. Balwani made it out with a reported $40 million.

He later became the chief operating officer at Theranos and had a romantic relationship with Ms. Holmes, which has been detailed in emails submitted to the court. Mr. Balwani also faces fraud charges, and his case is scheduled to go trial next year. Like Ms. Holmes, he has pleaded not guilty.

The government’s case against Elizabeth Holmes, the founder of Theranos, featured several key pieces of evidence that showed she intentionally deceived doctors, patients and investors in the blood testing start-up.

They included:

A fraudulent report

In 2010, Theranos created a 55-page report that prominently displayed the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline. Investors such as Lisa Peterson, who manages investments for the wealthy DeVos family, and Walter Mosley, whose clients include the Walton family, testified that the report had helped persuade them to invest in Theranos.

The problem? Pfizer, Schering-Plough and GlaxoSmithKline had not prepared or signed off on the report. While prosecutors did not establish that Ms. Holmes created the report, witnesses like Daniel Edlin, a former Theranos senior product manager, testified that she had signed off on all investor material.

A Theranos report implied endorsements from pharmaceutical companies including Schering-Plough and Pfizer.

An investor letter and a shareholder call

Theranos spent years discussing with the Department of Defense the possible deployment of its technology in the battlefield, but no partnership materialized.

Yet Ms. Holmes told potential investors in a letter that Theranos had signed contracts with the U.S. military — claims that helped persuade them to invest, the investors testified.

“We really relied on the fact that they had been doing work for pharma companies and the government for years,” Ms. Peterson said.

Jurors got to hear those claims for themselves in a taped shareholder call.

“We built the business around our partnerships with the pharmaceutical companies and our contracts with the military,” Ms. Holmes said in the recording.

A Theranos letter about the start-up’s work with pharmaceutical companies and the military.

Internal emails

Emails between Theranos employees made up the bulk of the prosecution’s exhibits. Some of the emails showed when Theranos hid device failures, removed abnormal results from test reports and fudged demonstrations of its blood testing.

In one case, Mr. Edlin asked a colleague for advice on how to demonstrate Theranos’s technology for potential investors.

Michael Craig, a Theranos software engineer, recommended that Mr. Edlin use the demo app, a special setting on Theranos’s devices that said “running” or “processing” if an error had taken place, rather than display the mistake.

The app would hide failures from the client, Mr. Craig wrote in an email.

“Never a bad thing,” Mr. Edlin replied. “Let’s go with demo, thanks.”

Emails between Theranos employees as they prepared to show the company’s technology.

Adam Rosendorff, former lab director at Theranos, left, arriving at court in October.Credit…David Paul Morris/Bloomberg, via Getty Images

From the start, prosecutors have argued that Elizabeth Holmes intentionally deceived investors, doctors and patients as she sought investments and partnerships for Theranos, her once highflying blood testing start-up.

In opening statements on Sept. 8, Robert Leach, the assistant U.S. attorney who is a lead prosecutor in the case, laid out the government’s central thesis: that Ms. Holmes courted investors and commercial partners with false claims about her company’s technology and its relationships with pharmaceutical companies and the military.

“Out of time and out of money, Elizabeth Holmes decided to lie,” he repeatedly declared.

To make that case, prosecutors called 29 witnesses to the stand. They included eight former Theranos employees, six investors, three commercial partners, two doctors and three patients. From a star-studded list of nearly 200 people the government had listed as potential witnesses, the highest-profile person to appear was former Defense Secretary James Mattis, who had served on Theranos’s board.

Prosecutors presented evidence to show that Ms. Holmes perpetrated deceit, including that she knew of technology demonstrations that hid Theranos’s failures and was aware the company made false claims of working with the military. They also showed that Theranos had used a report with a pharmaceutical company’s logo to imply it had that company’s backing, even though the firm had not signed off on the report. Investors and partners testified that those claims had helped persuade them to give Theranos their business and money.

The prosecution also detailed the dysfunction within Theranos’s lab, which handled the blood tests. Theranos had trumpeted its claim that its tests could discern various illnesses in patients with just a drop of blood.

But Adam Rosendorff, one of Theranos’s former lab directors, spent six days on the stand explaining that the tests repeatedly produced inaccurate and irregular results. Other lab directors testified that they had essentially been figureheads; one spent just five to 10 hours at Theranos over his tenure.

Daniel Edlin, a former senior product manager and Holmes family friend, testified that Ms. Holmes had signed off on Theranos’s marketing and investor materials. He also said Ramesh Balwani, the chief operating officer and Ms. Holmes’s onetime boyfriend, who is known as Sunny, had deferred to her when the two of them disagreed.

“Generally, she was the C.E.O., so she had the final decision-making authority,” Mr. Edlin said.

Ms. Holmes leaving the courthouse on Monday.Credit…Jim Wilson/The New York Times

The trial of Elizabeth Holmes had everything: a charismatic, attractive and youthful female defendant; celebrities; sex; vast sums of money; the long shadow of Steve Jobs; lives of real people at risk.

If it’s one of the most famous criminal cases ever to come out of Silicon Valley, it also sometimes seems like the only one. Prosecutors in Northern California brought 57 white-collar crime cases in fiscal year 2020. Even after accounting for the effect of Covid, cases have plunged from the peak of 350 in 1995.

Not every white-collar case is a tech case or related to start-ups, which means there are only a handful of times each year when someone in Silicon Valley is accused of a crime.

There are a lot of complicated reasons for this shortage of courtroom action.

A frequent explanation is that it is the fault of a lackluster U.S. attorney’s office in San Francisco. Few prosecutors come to the Bay Area to make their reputations, and those that do — like Robert Mueller 20 years ago — soon move on to better jobs. Mr. Mueller took over the F.B.I.

It’s not just a local issue. Fighting white-collar crime has been less of a priority for the Department of Justice since the Sept. 11 attacks brought fears of widespread terrorism.

And for all the growing awareness of the power of tech companies, there is little public demand to hold them accountable. When David Anderson stepped down as U.S. attorney for the Northern District of California early this year, he did an interview with a radio station. None of the questions from the host or from callers dealt with Silicon Valley.

Mr. Anderson, a Trump appointee, had talked about making Silicon Valley a priority for his prosecutors. His first public appearance was on a panel titled “White Collar Crime in a High-Tech World.” But he was in office for two years, too few to really make an impact. The district has had an acting U.S. attorney, Stephanie Hinds, since March.

Yet another reason is that Silicon Valley is a very rich place. That does not make government prosecutions impossible. But it ensures that top-flight defense attorneys can be brought in, making cases like Ms. Holmes’s neither short nor simple.

Finally, there is a sense in Silicon Valley that failure — whether a company that went under or an investment that was lost — is best kept in the family, far away from prosecutors, regulators and the media. Investors are supposed to be sophisticated, and a case like Ms. Holmes’s can reveal just how foolish and na?ve they were. The same is true of employees.

Better to just forget about anything suspicious than allege fraudulent activity. After all, you wouldn’t want to miss out on the next opportunity.

Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, surrounded herself with a constellation of moguls, four-star generals, venture capitalists and others during her time running the company. Ultimately, Theranos was undone after whistle-blowers who were concerned that the company was lying about its technology spoke to the media and to regulators.

Here are some of the central figures in the rise and fall of Theranos and Ms. Holmes’s fraud trial.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Carlos Chavarria for The New York Times

Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, was found guilty of four of 11 charges of fraud.

Here are some key figures in the case ->

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Stephen Lam/Reuters

Holmes founded Theranos in 2003 as a 19-year-old Stanford dropout. She raised $945 million and was crowned the world’s youngest billionaire, but was accused of lying about how well Theranos’s technology worked. She pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Justin Sullivan/Getty Images

Ramesh Balwani, known as Sunny,was Theranos’s president and chief operating officer from 2009 through 2016 and was in a romantic relationship with Holmes. He has been accused of fraud and may stand trial next year. He has pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jefferson Siegel for The New York Times

David Boies, a prominent litigator, represented Theranos as its lawyer and served on its board.

He tried to shut down whistle-blowers and reporters who questioned the company’s business practices.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Getty Images

The journalist John Carreyrou wrote stories exposing fraudulent practices at Theranos.

His coverage for The Wall Street Journal helped lead to the implosion of Theranos.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jeff Kravitz/FilmMagic, via Getty Images

Tyler Shultz and Erika Cheung are former Theranos employees and were whistle-blowers. They worked at the start-up in 2013 and 2014. Shultz is a grandson of George Shultz, a former secretary of state who was on the Theranos board.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Eric Thayer for The New York Times

James Mattis, a retired four-star general, was a member of Theranos’s board.

He went on to serve as President Donald J. Trump’s secretary of defense.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Edward Davila, a federal judge for the Northern District of California, will oversee the case.

Kevin Downey, a partner at the Washington law firm Williams & Connolly, is the lead lawyer for Holmes.

Robert Leach, an assistant United States attorney for the Northern District of California, will lead the prosecution for the government, along with other prosecutors from the U.S. attorney’s office.

Read more about Elizabeth Holmes:

Nov. 15, 2021

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Theranos’s blood testing machine at the company’s headquarters in 2015.Credit…Jim Wilson/The New York Times

In 2018, the United States charged Elizabeth Holmes and her business partner, Ramesh “Sunny” Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

The indictment accused the pair of engaging in a “scheme, plan and artifice to defraud investors as to a material matter.”

In other words, they were accused of lying about Theranos’s business and technology to get money. The lies outlined in the indictment included claims Theranos made about its relationship with the military and the status of its partnership with Walgreens. Prosecutors also said that Theranos faked demonstrations of its technology and falsified validation reports from pharmaceutical companies and the financial health of its business.

Wire fraud is a felony that carries a maximum penalty of 20 years and potential fines. Theranos also paid a $500,000 fine to settle civil securities fraud charges with the Securities and Exchange Commission in 2018. It also settled multiple lawsuits with investors and partners before dissolving that year.

Since the criminal indictment, the cases of Ms. Holmes and Mr. Balwani have been separated. Mr. Balwani faces trial next year. Further, some of the charges against Ms. Holmes have been dropped and others added.

She pleaded not guilty.

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