Tuesday, 9 August, 2022
HomeMedico-LegalFounder of blood-test startup convicted of fraud

Founder of blood-test startup convicted of fraud

Elizabeth Holmes, founder of the US blood-testing company Theranos, has been convicted of defrauding investors after a months-long landmark trial in California.

Prosecutors said Holmes knowingly lied about technology that she said could detect diseases with a few drops of blood, and jurors found her guilty of four charges, including conspiracy to commit fraud against investors and three counts of wire fraud. She denied the charges, which carry a maximum prison term of 20 years each.

She faced 11 charges in total and was found not guilty of four charges relating to defrauding the public.

BBC News reports that Holmes was not taken into custody, with no date confirmed yet for sentencing and a further hearing scheduled next week.

The split verdict came after the judge said the jury, having deliberated for seven days, could deliver a partial verdict after being unable to reach consensus on another three counts.

Theranos, at one point valued at $9bn, was once the darling of Silicon Valley. She founded Theranos as a teenager, shortly after dropping out of chemical engineering at Stanford University. She was able to raise more than $900m from billionaires like media magnate Rupert Murdoch and tech mogul Larry Ellison.

The firm officially ceased operations in 2018 after the scandal.

For nearly four months at trial, the jury of eight men and four women were presented with two starkly different accounts of the former self-made billionaire and her downfall.

Calling some 30 witnesses, the prosecution sought to prove that Holmes knew the product she was selling to investors was a sham. In court, multiple lab directors testified that they told Holmes about the flaws in Theranos’ technology but were instructed to downplay their concerns. At the same time, they said, Holmes told investors the technology was operating as planned.

Testifying in her own defence, Holmes, who has just had a baby, acknowledged mistakes in Theranos’ operation, but maintained she never knowingly defrauded patients or investors.

The defence also laid blame on Ramesh “Sunny” Balwani, her former business partner and long-term boyfriend, adds the BBC. Holmes accused Balwani, 19 years her senior, of emotional and sexual abuse, allegations he denies.

Balwani will face trial next month in the same court for similar charges. It’s likely Holmes will not be sentenced until after that case has concluded.

 

BBC News article – Elizabeth Holmes: Theranos founder convicted of fraud (Open access)

 

See more from MedicalBrief archives:

 

Founder of ‘breakthrough’ blood-testing technology gives evidence

 

Medical startup founder on trial for duping US investors out of millions

 

 

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