After hearing 32 witnesses over a three-month trial and seven days of deliberation, a jury found former Theranos CEO Elizabeth Holmes guilty on three counts of wire fraud and one count of conspiracy to commit fraud Monday. She was acquitted on four other counts of fraud and conspiracy. The video above shows her leaving the courthouse after the verdict, and includes reaction from prosecutors and a legal expert.
With the partial guilty verdict, Holmes was found to have duped investors into believing Theranos had developed a revolutionary medical device that could detect a multitude of diseases and conditions from a few drops of blood. The counts Holmes was found not guilty on alleged she deceived patients who paid for Theranos blood tests, too.
“The guilty verdicts in this case reflect Miss Holmes’ culpability in this large scale investor fraud,” U.S. Attorney Stephanie Hinds said in a statement. “She must now face sentencing for her crimes.”
Holmes faces up to 20 years in prison for each count. Legal experts say she is unlikely to receive the maximum sentence. A federal judge indicated he is likely to hold off on Holmes’ sentencing until the completion of a separate trial involving similar fraud charges against Sunny Balwani, who was Theranos’ chief operating officer from 2009 to 2016.
The jury deadlocked on three remaining charges. The judge anticipates dismissing the charges as part of a mistrial ruling that could come as early as next week.
“I think it’s a pretty significant movement in the case by the jury letting us know that they’re unable to reach a verdict on three of the counts,” legal analyst and former prosecutor Michele Hagans said Monday. “Clearly, this jury is being very cautious and they want to make sure they’re doing the right thing.”
The collapse of Theranos and the guilty verdict for Holmes are expected to serve as an indictment against a popular marketing strategy among Silicon Valley entrepreneurs, known as “fake it ’till you make it.” The strategy involved brash promises, bold exaggerations and boundless optimism, regardless of whether it’s warranted.
A Santa Clara University law professor who attended the trial said Holmes’ guilty verdict “will send a message to CEOs that there are consequences in overstepping the bounds.”