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Elizabeth Holmes: What’s Next for Theranos Founder After Her Conviction for Fraud

Elizabeth Holmes: What’s Next for Theranos Founder After Her Conviction for Fraud
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Elizabeth Holmes, founder of Theranos Inc. , pleaded guilty Jan. 3 to four of 11 counts of criminal fraud against investors. She was acquitted of four counts linked to two patients. The jury was unable to reach a unanimous verdict on the three remaining charges linked to the investors.

Ms. Holmes is sure to appeal, a process that could take years. On appeal, Ms. Holmes can challenge aspects including evidence allowed by the judge to the defense’s objections or any sign of juror misconduct, though none has yet come to light.

Theranos founder Elizabeth Holmes became emotional on the podium on November 30 when Attorney General Robert Leach asked her to read romantic scripts between her and ex-boyfriend and Theranos deputy Ramesh “Sunny” Balwani.


Vicki Behringer/Reuters

The judge said he plans to hold a conference in about a week to discuss the three charges on which the jury could not reach a unanimous decision and any plans by the government to retrial on those charges.

Prosecutors can choose to pursue a new trial on the pending charges, although legal experts have said such a course is unlikely. The timing of any new US action against Ms Holmes is likely to be influenced by an upcoming trial of Ramesh “Sunny” Balwani, Ms Holmes’ former friend and deputy at Theranos who faces similar charges of defrauding investors and patients over the startup’s blood – an ability test he denies.

Ms. Holmes, 37, could face up to 20 years in prison for each charge she was convicted of, but previous prosecutors have said such harsh punishment is rare in white-collar fraud cases. Former prosecutors said acquitting Holmes of any charges would likely reduce the overall sentence she would face. Judgment will follow.

What possible prison time would Mrs. Holmes face?

The convictions against Elizabeth Holmes mean the founder of Theranos could go to prison for years. Sentencing is a complex and time-consuming process, and judges have discretion within guidelines to decide what punishment they think is appropriate. Several steps remain between Ms. Holmes and any possible time in prison.

Sentencing experts said she will likely be allowed to remain free on bail until sentencing, which could be six months or more from now.

The first step is to have the conduct officer look into the facts of the case and make a detailed report before punishment. The report must be submitted to each side at least 45 days prior to the sentencing hearing.

What was the rule for count after count in the Elizabeth Holmes trial?

1. Plot to commit wire fraud against Theranos investors: sinner

2. Conspiracy to commit wire fraud against patients paying for Theranos: not guilty

3. Electronic Fraud Against Theranos Investors: Bank Transfer of $99,990 from Alan Jay Eisenman: no judgment

4. Electronic Fraud Against Theranos Investors: $5,349,900 Wire Transfer from Black Diamond Ventures: no judgment

5. Electronic fraud against Theranos investors: $4,875,000 wire transfer from Hall Phoenix Inwood Ltd: no judgment

6. Electronic Fraud against Theranos Investors: Wire Transfer of $38,336,632 from the PFM Healthcare Master Fund: sinner

7. Electronic fraud against Theranos investors: wire transfer of $99,999,984 from Lakeshore Capital Management LP: sinner

8. Wire Scam Against Theranos Investors: $5,999,997 Wire Transfer From Mosley Family Holdings LLC: sinner

9. Prosecutors dropped the charge in November, after they made the mistake of endangering the account.

10. Telegraph fraud against patients paying for Theranos: Wire transfer of patient ET blood test results: not guilty

11. Wired fraud against patients paying for Theranos: Wire transfer of patient ME blood test results: not guilty

12. Wire fraud against patients paying for Theranos: $1,126,661 wire transfer used to purchase ads for Theranos Wellness Centers: not guilty

How did the jury reach its verdict?

Defense rested on December 8, 2021. Closing arguments took place on December 16 and December 17. The jury delivered the case on December 17 and began deliberating in earnest the following Monday. On January 3, the seventh day of deliberations, the jury informed the judge that it was unable to reach a unanimous verdict on three of the 11 charges. The judge gave them additional instructions to continue deliberating. The instructions also urged them not to change their beliefs solely because of the opinions of their fellow jurors.

The jury then continued its deliberations and returned later in the day to inform the judge again that it was still unable to reach a unanimous verdict on all three counts. At that point, the judge polled the jury to confirm the deadlock on the three counts, then returned it to the jury room to fill out a sentencing form on the remaining eight counts.

What was the main issue raised by the defense?

The defense placed a large and potentially risky bet by putting Mrs. Holmes on the podium to testify over the course of seven days.

Through it all, she told her story in a clear, confident voice that followers of Theranos might remember from the company’s heyday. Mrs. Holmes seldom falters while being questioned by her attorney or the government, answering briefly and making eye contact with the questioner, and only occasionally speaking directly to the jury. She was smiling a lot and laughing a little. Her composure only exploded when she broke down in tears as she testified about what she described as an abusive personal relationship with Mr. Balwani.

Ms. Holmes has regretted some business decisions and admitted mistakes, but she has also sought to blame others: her ex-boyfriend and first deputy, Mr. Balwani. laboratory managers, staff scientists; and its marketing agency. The defense approached the trial through several axes.

The first pillar is that her knowledge of the company came from her employees she trusts. She said the reports she received from subordinates led her to believe that the company’s technology elements were working successfully.

Second, Ms Holmes targeted what lawyers after the trial saw as the prosecution’s strongest evidence: Theranos documents that had been altered to include the names and logos of drug companies, including Pfizer Inc. , which incorrectly indicates that companies have validated Theranos technology. Ms Holmes has admitted manipulating the reports but said it was not done maliciously.

Third, Ms Holmes said Theranos started using commercial blood analyzers because the company couldn’t handle a large volume of patients’ blood samples on its own devices, and not because the company was trying to mislead anyone.

Fourth, Ms Holmes lamented how Theranos handled complaints from lab staff and said she wished they had. Legal observers said the business decisions are different, and it’s the moments that made them seem even more relatable.

Fifthly, Ms. Holmes claimed that Mr. Balwani was emotionally and sexually abused. She described a relationship in which she was forced to have sex against her will and spent more than a decade trying to live up to his strict standards at the expense of her friends, family, and personal agency.

What is the main issue raised by the prosecution?

The plaintiffs provided an account of a CEO who repeatedly fabricated the successes of her technology while building a startup that ultimately failed. They aimed to convince the jurors that Mrs. Holmes’ behavior had risen to the level of criminal fraud, which would require proof of intent.

The case included testimony from investors, former employees, scientists and a retired four-star general. It featured information that had not been captured by the extensive media coverage of Theranos: forged documents, a previously unknown lab manager who had never visited the lab, exaggerated revenue expectations for investors, and audio clips from a recording of a call Ms. Holmes was promoting the company to investors.

Investors told the story of how they were persuaded to back Theranos by claims of financial and technological success that turned out to be untrue. Previous employees witnessed how Ms. Holmes and her deputies rejected their efforts to raise alarms about the inaccuracy of Theranos’ tests and to prevent the company from using its devices on patients. Patients testified about receiving blood test results from Theranos that incorrectly led them to believe they had serious health conditions.

Write to Sara Randazzo at, Heather Somerville at and Anthony DeRosa at

Theranos and the trial of Elizabeth Holmes

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