On Monday, a jury convicted Theranos founder Elizabeth Holmes of four counts of fraud. Holmes greatly exaggerated the merits of her blood-testing machine to investors.
She also overstated how much money the company could earn. She also made false claims about how many machines are in use at the time.
Elizabeth Holmes Found Guilty of Four Counts of Fraud
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Elizabeth Holmes faced 11 counts of fraud for the Theranos debacle. She was found guilty on four charges, all relating to how she misrepresented her blood testing machines to investors.
In addition, the jury absolved her from guilt on three other charges related to defrauding patients. She also went scot-free on a conspiracy charge.
The jury deadlocked on the three remaining charges of defrauding investors. She initially faced 12 fraud counts. However, the judge dismissed the ninth due to a prosecutor’s error.
As a result, Elizabeth Holmes now faces a maximum of 20 years of prison time for each guilty charge. The judge has yet to set the actual length of the sentences in an upcoming hearing.
Being a first-time offender, Holmes will unlikely face maximum terms. However, the judge may compel her to pay fines and give restitution to investors.
Elizabeth Holmes Defrauded Investors More Than $140 Million
In total, the jury found Holmes guilty of defrauding investors of more than $140 million. This includes nearly $100 million from Lakeshore Capital Management.
Lakeshore is an investment entity frequented by former Education Secretary Betsy DeVos and her family.
During the verdict announcement, Holmes did not display any emotion. Once the court adjourned, she approached her parents and her partner, Bill Evans.
As Elizabeth Holmes remains free on bond, they left the courthouse altogether.
Modern Blood Test Machine Was a Fake
A few years ago, Elizabeth Holmes and her revolutionary blood-testing machine was the talk of the entire country.
Theranos ads touted a small, computer-sized machine that can do the work of an entire blood testing lab. With a simple prick on the finger to draw blood, the machine can run diagnostics faster and cheaper than labs.
However, investigations subsequently showed that the machines often displayed inaccurate data. By the end, Theranos was testing blood samples using other companies’ machines.
It took the jury around seven days to finish deliberations. A recorded phone call showed that Holmes often lied to her audience about her machine’s effectiveness.
During the call, she told investors that her device can perform any blood test. She also said that Theranos will earn over a billion dollars.
Finally, she claimed that the military carries her blood test devices on medevac helicopters. None of these statements were true.
Elizabeth Holmes Knew Her Machine Didn’t Work
Meanwhile, federal prosecutors said Holmes was fully aware that she was selling a product that didn’t work as advertised. She doubled down when the company she founded began to head toward bankruptcy.
Assistant US Attorney Robert Leach opened the prosecutor’s argument by saying Holmes was only after the money. “This is a case about fraud, about lying and cheating to get money,” he said.
Watch the Bloomberg Markets and Finance News video reporting that Elizabeth Holmes found guilty in Theranos fraud trial:
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