The former Silicon Valley darling was convicted of one count of conspiring to commit wire fraud against Theranos investors and three counts of fraud in connection to wire transfers. The jurors found her not guilty on four other counts — three of which related to defrauding patients — and failed to reach a verdict on three others.
Reporters in the courtroom said Holmes, 37, maintained a stoic demeanor as the judge read the verdict, then she gave her partner, parents and two friends hugs before leaving the room. Her attorneys are expected to appeal the decision.
Each count carries a penalty of hundreds of thousands of dollars in fines and a maximum sentence of up to 20 years in prison, which she would likely serve concurrently.
The decision comes after jurors told Judge Edward Davila on Monday — seven days after they began deliberations — that they were deadlocked on three of the 11 counts Holmes was facing for wire fraud and conspiracy to commit wire fraud. Davila, who sits on the federal court in the Northern District of California, asked the jurors to continue deliberating and said they should “not hesitate to reexamine your own views and change your opinion if you become persuaded that it is wrong.”
Davila will likely declare a mistrial on the three undecided charges.
Holmes pleaded not guilty to all charges in 2018 after a federal grand jury elected to indict her for misleading investors and customers about the functionality of her blood-testing machines. She claimed the devices could diagnose a wide range of conditions from just a single drop of blood, completely overhauling a practice that typically takes many vials of blood and much more time.
Holmes launched Theranos in 2003, when she was just 19, and quickly became a hot commodity in Silicon Valley, attracting a litany of high-profile investors and business partners eager to put her devices in their stores. Holmes styled herself as the next Steve Jobs, and by 2015 her company was valued at a staggering $9 billion.
“We were being deprived of fundamental issues,” said Mattis, who invested $85,000 in Theranos and served on its board from 2013 to 2016.
“There became a point when I didn’t know what to believe about Theranos anymore,” he said. “Looking back now, I’m disappointed at the level of transparency from Ms. Holmes.”
Mattis also disputed Holmes’ past claims that Theranos devices were used in military operations.
Suspicions around Theranos began to emerge after whistleblowers within the company began speaking with reporters in 2015. The Wall Street Journal’s John Carreyrou did much of the investigating, finding that Theranos was allegedly running all of its blood tests on standard machines produced by outside companies and that many of the results the company produced were inaccurate and putting users at risk.
When Holmes took the stand in November, she pointed to positive reports about the machines’ effectiveness in the early days of the company. She also accused her former business partner and boyfriend Ramesh “Sunny” Balwani ― who will soon face the same counts of fraud in a separate trial ― of abusing her and wielding control over her as they ran the company.
However, others testified that Balwani typically deferred to Holmes at work, and his lawyers vehemently deny claims of abuse.
In a separate settlement she reached in 2018 with the U.S. Securities and Exchange Commission over additional fraud allegations, Holmes was barred from serving as a director or officer of any public company for a decade.