Theranos founder Elizabeth Holmes convicted of fraud
The month-long Elizabeth Holmes trial has come to a head after a jury found the tech entrepreneur guilty of three counts of wire fraud and one count of attempting to commit wire fraud against investors in a San Jose courtroom in California on Monday.
The prosecutors said Holmes purposely lied about the technology that she claimed could detect diseases on a single drop of blood from a finger prick.
The charges, which Holmes has denied, carry a maximum prison term of 20 years each, although these are likely to be served concurrently.
The trial saw Holmes face eleven charges in total, and she was acquitted of four charges relating to defrauding patients who had paid for and underwent Theranos testing.
The judge agreed to deliver a partial verdict on the remaining three charges after the jury remained inconclusive after seven days of deliberating the charges.
The three wire fraud charges Holmes was found guilty of all relate to specific high-profile investors in her failed company, Theranos, which included business tycoon Rupert Murdoch and former US Secretary of State Henry Kissinger.
In 2003, and at 19, Elizabeth Holmes founded Theranos and quickly rose to fame in Silicon Valley. Her start-up attracted attention from high-profile investors and high-profile board members, making her net worth $4.5 billion, according to a 2015 estimate by Forbes.
The case has brought into light the ‘fake it until you make it’ culture that critics believe still pervades Silicon Valley.
It is not unusual to see a start-up pitching a product that is only an idea to investors and hyping the product can help founders realise their ideas with financial aid they may have not had before.
For Elizabeth Holmes, the issue lied with whether she knew that the idea was already too unrealistic – crossing the line from a businessperson playing into this ‘fake it until you make it culture’ into fraud.
Prosecutors argued that if Holmes had been truthful with investors and patients, Theranos would never have attracted critical funding and revenue.
Assistant U.S. Attorney Jeff Schenk said at the start of closing arguments: “She chose fraud over business failure. She chose to be dishonest. That choice was not only callous, but it was also criminal.”
A sentencing date is expected to be set at a hearing next week. Holmes will be able to appeal the conviction, the sentence, or both. A conference will also be held next week on the three counts in which the jury could not reach a verdict.
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