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Elizabeth Holmes: Theranos founder convicted of fraud

BY: BBC
Holmes (centre) remains on bail before sentencing at a later date
Holmes (centre) remains on bail before sentencing at a later date

Theranos founder Elizabeth Holmes has been convicted of defrauding investors after a months-long landmark trial in California.

Prosecutors said Holmes knowingly lied about technology she said could detect diseases with a few drops of blood.

Jurors found Holmes guilty of conspiracy to commit fraud against investors and three charges 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.

Journalists inside the courtroom said the 37-year-old, who gave birth to her first child last year, showed little emotion when the verdicts were read out, and hugged her husband, Billy Evans, and her parents before leaving the courtroom.

Holmes 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 verdict after being unable to reach consensus on another three counts.

The three wire fraud charges she was found guilty of are tied to specific investors in her failed company. Wire fraud is a relatively wide-ranging federal crime in the US, which involves using electronic communications, such as emails, to make false statements to get something from another person - usually money.

Theranos, at one point valued at $9bn (£6.5bn), was once the darling of biotech and Silicon Valley.

Holmes was able to raise more than $900m from billionaires such as media magnate Rupert Murdoch and tech mogul Larry Ellison.

The firm promised it would revolutionise the healthcare industry with a test that could detect conditions such as cancer and diabetes with only a few drops of blood.

But these 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 Holmes knew the product she was selling to investors - a machine called the Edison - was a sham, but remained hell-bent on the firm's success.

Her company secretly relied on commercially available machines to run the tests, prosecutors said.

At trial, multiple lab directors testified to telling Holmes about the flaws in Theranos' technology but being instructed to downplay their concerns. At the same time, they added , 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, it was criminal."

The defence countered with descriptions of a dedicated and driven businesswoman, making waves in a male-dominated industry.