Theranos founder Elizabeth Holmes walked into her criminal trial in federal court in San Jose in September 2021 charged with 12 counts of fraud in connection with her now-defunct Palo Alto blood-testing startup. Four months later, she walked out guilty on four counts, after a jury found her liable for defrauding some, but not all investors, and acquitted her of defrauding patients. One charge was dropped because federal prosecutors erred.
Holmes, who gave birth to a son in July 2021 weeks before the start of her trial, and is pregnant again, is to be sentenced Friday, with legal experts predicting Judge Edward Davila, who presided over her four-year felony case and her trial that ended Jan. 3, will send her to prison for several years.
Here’s what the jury decided:
Count 1: Conspiracy to commit wire fraud against Theranos investors
Verdict: Guilty
What happened: Jurors found that Holmes schemed with her former romantic partner and Theranos’ chief operating officer Sunny Balwani — who was tried separately and convicted in July — of using false statements about the company, its business partnerships and its finances to “knowingly and intentionally” deceive investors into putting hundreds of millions of dollars into Theranos.
Count 2: Conspiracy to commit wire fraud against Theranos’ paying patients
Verdict: Not guilty
What happened: Jurors declined to hold Holmes responsible for deceiving patients into paying for unreliable blood tests. Federal prosecutors put forward a handful of examples of patients who received inaccurate test results, but were hampered by the loss of a patient-test database that Theranos had given them in an unusable format before the original version was dismantled. Holmes’ lawyers emphasized to jurors that the few documented cases of inaccurate test results referenced in the charges paled in comparison to Theranos’ millions of patient test results.
Count 3: Wire fraud involving investor Alan Eisenman
Verdict: No verdict
What happened: Retired Texas money manager Eisenman testified bitterly that after he put $1.1 million into Theranos in 2006 because Holmes touted its success, he became frustrated with her unwillingness to provide information. Still, he put another $100,000 into the company in 2013, and admitted he knew he was making risky investments.
Count 4: Wire fraud involving Black Diamond Ventures, a Los Angeles venture capital firm
Verdict: No verdict
What happened: Black Diamond put $5,349,900 into Theranos. The firm’s managing director Christopher Lucas testified that Holmes told him her blood analyzers were being used to treat soldiers in the field — a false claim — and that he trusted her assertion that she could not provide standard investor information because competitors could use it to “crush” her company. A Holmes lawyer argued Lucas failed to conduct proper diligence before investing in Theranos.
Count 5: Wire fraud involving Texas investment firm Hall Group
Verdict: No verdict
What happened: Hall Group in 2013 put $4,875,000 into Theranos. Senior Hall Group executive Bryan Tolbert testified that he was convinced to invest by Holmes’ statements suggesting her technology was doing military-related work in Afghanistan, and her claims that Theranos could “run any combination of lab tests” from “tiny” blood samples. Instead, Theranos often relied on vein-drawn blood, rather than its touted finger-stick droplets, and its own machines could run only a dozen tests of often-dubious accuracy, jurors were told. Tolbert admitted Hall Group were sophisticated investors, and that he had seen “a lot of potential for the future” in Theranos.
Count 6: Wire fraud in connection with PFM Health Sciences of San Francisco
Verdict: Guilty
What happened: PFM invested $38,336,632 in Theranos in 2014. Brian Grossman, PFM’s chief investment officer, testified that his team was told the startup had brought in more than $200 million in revenue, “mostly from the Department of Defense.” Theranos’ former head of accounting testified earlier that 2011 revenue came in at $518,000 and that the company had no revenue in 2012 or 2013. Holmes lawyer Lance Wade told the jury Theranos had $25 million in revenue in 2013. Grossman testified that Holmes had been “very clear” that her company could “match every test” performed by competitors Labcorp and Quest, a false claim.
Count 7: Wire fraud involving the family of former U.S. Education Secretary Betsy DeVos
Verdict: Guilty
What happened: The DeVos family invested $99,999,984 in Theranos in 2014. The family’s investment manager Lisa Peterson testified that Holmes’ claims about her machines were “validated” by a rosy report about the technology that bore the logo of pharmaceutical giant Pfizer, and that Theranos had sent to the family. Holmes herself, when on the witness stand, admitted she stole pharma-firm logos and affixed them to internal Theranos reports, and said, “I wish I had done it differently.”
Count 8: Wire fraud in connection with an investment by Daniel Mosley, a long-time lawyer for former U.S. Secretary of State and Theranos board member and investor Henry Kissinger
Verdict: Guilty
What happened: Mosley personally invested $5,999,997 in Theranos in October 2014. Mosley testified that Kissinger told him about Theranos, and Mosley put money into the firm after meeting Holmes. Mosley testified that materials Theranos sent him, with Pfizer’s logo on every page, were important to his decision to invest. Holmes had also testified to swiping pharmaceutical company Schering-Plough’s logos in addition to Pfizer’s and putting them on internal Theranos reports. Mosley called the doctored report sent to him “the most extensive evidence supplied regarding the reliability of the Theranos technology and its applications.”
Count 9: Wire fraud in connection with a patient’s test results
Verdict: None
What happened: Count 9 was dropped because of an error by the prosecution. The Theranos test the patient took was not among those the prosecution claimed were unreliable.
Count 10: Wire fraud in connection with a patient’s test result
Verdict: Not guilty
What happened: Erin Tompkins of Phoenix testified that she received a Theranos test result incorrectly showing antibodies for HIV, suggesting possible infection. Tompkins testified that she called Theranos the same day or the next, asking to speak to someone who could explain the results, but the woman who answered was of no help. Further testing showed no sign of the virus, Tompkins said. She testified that she received a refund check for the test about two years later.
Count 11: Wire fraud in connection with a patient’s test results
Verdict: Not guilty
What happened: Count 11 related to results from two Theranos lab tests of an Arizona patient that falsely indicated possible prostate cancer. The patient’s doctor testified about the 2015 testing at a Walgreens drug store, which showed results for a cancer-linked antigen at 10 times the man’s actual levels established by subsequent testing. The doctor acknowledged under cross-examination that he knew lab errors occasionally occur, and that he had experienced an issue unrelated to Theranos with patients’ test results being mixed up.
Count 12: Wire fraud against Theranos patients in connection with payment to a marketing and advertising company
Verdict: Not guilty
What happened: Theranos paid Horizon Media $1,126,661 in August 2015 for marketing and advertising, for the launch of Theranos’ services at Walgreens drug stores. Former Theranos controller Denise Yam testified that Theranos paid Horizon for marketing and ads for TV, radio and print publications. But Yam, who also goes by So Han Spivey, said she did not know if any of the ads ran.
