THERANOS’ FOUNDER ELIZABETH HOLMES received four convictions out of 11 charges in her blockbuster trial, which likely means a federal prison sentence for the former CEO.
The guilty verdicts arrived Jan. 3 after months of testimony and jury deliberations that lasted more than 50 hours.
Holmes was convicted on the following charges, as outlined by technology news site Ars Technica:
- Defrauding Lakeshore Capital Management of $100 million. The firm is owned by the family of Betsy DeVos, the former U.S. Secretary of Education.
- Defrauding PFM Health Sciences of $38 million. The healthcare investment firm is led by Brian Grossman.
- Defrauding a company associated with Daniel Mosley of $6 million. Mosley is the former estate attorney for former U.S. Secretary of State Henry Kissinger.
- Conspiracy to commit wire fraud against various investors.
Holmes was found not guilty of four charges that involved defrauding patients who took Theranos blood tests. Finally, the jury deadlocked on three other charges of wire fraud against investors.
No Evidence of Patient Fraud
It’s interesting to note that the trial results favored the losses to investors who poured millions of dollars into Theranos and its flawed technology, as opposed to patient complaints. Bobby Allyn, a reporter for NPR who covered the trial, commented that the jury was not convinced there was enough evidence about patients who claimed fraud in the trial.
“The jury … acquitted Holmes of separate charges connected to the allegation that she intentionally deceived patients who went into Walgreens in Palo Alto, California, or in Arizona, got a Theranos blood test, and got a bad result,” Allyn said on the Jan. 4 edition of NPR’s podcast, Up First. “The jury didn’t think there was enough evidence to convict Holmes of defrauding those patients.”
Theranos had initially struck a deal with Walgreens Boots Alliance in 2012 to offer specimen collections services in some stores in those states.
Lab Director Testimony
For clinical laboratory and pathology leaders, the trial’s conclusion ends a voyeuristic journey into a high-tech lab’s collapse amid accusations of false test data and defrauded investors. But it also uncovered the need for regular, everyday laboratories to carefully consider their responsibilities under the Clinical Laboratory Improvement Amendments of 1988 (See TDR, Nov. 8, 2021, and Nov. 29, 2021.)
Key to the convictions was testimony from numerous witnesses, including four former Theranos laboratory directors who knew the company’s Edison finger-prick blood analyzer did not work as touted. (See TDR, Oct. 18, 2021, and Nov. 8, 2021.)
Holmes’ sentencing date has not been set. She faces up to 20 years on each conviction, although the judge could reduce those sentences and make them run concurrently. Some court watchers believe factors that could lighten the sentence might be the not guilty verdicts in the case as well as the fact that Holmes has a baby at home.