Theranos founder Elizabeth Holmes found guilty in landmark Silicon Valley fraud case

A federal jury found Theranos founder Elizabeth Holmes guilty on four counts of wire fraud and conspiracy to commit fraud against investors Monday, in the most high-profile test of whether Silicon Valley’s “fake it until you make it” ethos could withstand legal scrutiny. The decision — delivered by a jury of eight men and four women after seven days of deliberations — cements what multiple media investigations, podcasts and documentaries have highlighted over the past six years: that Holmes knowingly misled investors about her company’s blood-testing technology. It was a landmark conviction in one of the few prosecutions of a tech executive during Silicon Valley’s rise to global dominance. The jury convicted Holmes of four counts related to interactions with investors, marking a big win for the government’s years-long probe into the entrepreneur. However, Holmes was acquitted on four counts related to patients, and the jury was deadlocked on three other counts related to defrauding investors.

“She chose fraud over business failure. She chose to be dishonest with investors and with patients,” prosecutor Jeff Schenk said in his closing argument. Holmes faces the possibility of prison time over the convictions as each count carries a maximum sentence of 20 years, although a sentencing hearing had not been set at the time of the verdict. Holmes was not taken into custody Monday following the verdict, and a mistrial was likely to be declared over the three outstanding counts. “The guilty verdicts in this case reflect Ms. Holmes’s culpability in this large-scale investor fraud, and she must now face sentencing for her crimes,” said Stephanie Hinds, U.S. attorney for the Northern District of California. Following the verdict, Holmes walked out of the courtroom holding hands with her mother and partner, and did not respond to questions. The trial opened a window into the secretive world of Silicon Valley start-ups, granting a rare peek into a place where CEOs rarely stand for trial and companies often skirt regulatory consequences. The industry is known for its “fake it until you make it” adage, which leads some founders to overhype their products. But Holmes’s story stood out as an oft-cited extreme example of that culture due to the high-profile investors she attracted and Theranos’s direct involvement in patient health care.