Elizabeth Holmes, founder and former CEO of Theranos, is standing trial for fraud. Pictured: Holmes leaving the San Jose courthouse.

Photo: Jane Tyska/Digital First Media/The Mercury News via Getty Images
Elizabeth Holmes guilty of Theranos fraud

Elizabeth Holmes guilty of Theranos fraud

The months-long trial was a reckoning for Holmes, for Silicon Valley, and for faking it till you make it.

Former Theranos CEO Elizabeth Holmes' fraud trial in San Jose started in earnest in September. After four months of testimony from witnesses, the judge sent the case to the jury on Dec. 17. She was found guilty on four charges and not guilty on another four, with the jury deadlocking on three other charges. Sentencing is now scheduled for September. Over the course of the trial, many reflected on what the Theranos scandal has meant for tech.

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Sentencing set

Jan. 12, 2022

Elizabeth Holmes is expected to be sentenced on Sept. 26, according to the latest court documents. The government will also dismiss the three counts of investor fraud on which the jury was deadlocked.

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Guilty

Jan. 3, 2022

After more than four months in court, a jury of eight men and four women found Elizabeth Holmes guilty on four counts for defrauding investors, but not guilty on four counts related to defrauding patients.

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Deadlock

Jan. 3, 2022

Shortly after starting its seventh full day of deliberations, the jury in Elizabeth Holmes' fraud trial informed the court that it cannot reach an unanimous verdict on 3 of the 11 counts. It is not known which of the 11 charges of fraud and conspiracy to commit fraud against patients and investors that the jury is deadlocked on.

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The lessons of Theranos

Dec. 20, 2021

Elizabeth Holmes has long been convicted in the court of public opinion. But after four long months, a jury of her peers will decide whether the Theranos founder is criminally guilty of defrauding investors and patients.

For Holmes, the verdict will have obvious personal consequences, including the threat of up to 20 years of prison. But for the rest of tech, experts outside the Silicon Valley bubble say it’s unlikely there will be some dramatic revelation or change in behavior, regardless of the outcome.

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The defense's last word

Dec. 17, 2021

Kevin Downey, one of Holmes’ lawyers, hammered home the point that the entrepreneur couldn’t have intentionally defrauded investors, because she believed in the company every step of the way. He returned to the fact that Holmes never sold a share of her stock in Theranos, while contending that there wasn’t evidence that she held onto her stake to maintain control and avoid scrutiny, as the government had argued.

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The prosecution's closing argument

Dec. 16, 2021

Elizabeth Holmes had a choice.

That’s what Assistant U.S. Attorney Jeff Schenk argued in a federal courthouse in San Jose Thursday as the government’s fraud case against the former Theranos CEO drew to a close.

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The defense rests

When asked by her attorney if she ever intentionally misled investors in failed blood-testing startup Theranos, Elizabeth Holmes confidently responded, "Never."

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What Holmes didn't say

Dec. 7, 2021

During its cross-examination on Tuesday, the government pointed out times Holmes could have disclosed the whole truth to investors, but chose not to. As CEO of the blood-testing startup, Holmes was known for mesmerizing audiences with her passionate pitches for revolutionizing health care. But as the months-long fraud trial of the former Theranos CEO drew near its end with the defendant on the stand, the case against her appeared to hinge as much as on when she held her tongue as when she spoke.

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Control issues

Nov. 30, 2021

At Theranos, Elizabeth Holmes was the boss. At least that’s what prosecutors in her ongoing fraud trial argued Tuesday.

Robert Leach, the lead prosecutor in the Holmes case, began his cross-examination of Holmes by questioning her on the control she had over the failed blood-testing startup.

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Nov. 29, 2021

Elizabeth Holmes has blamed many people along the way for the swift downfall of her blood-testing startup, Theranos. But on the fourth day of her testimony in the fraud case against her, she pointed the finger at the man who was once her close professional and personal partner: Sunny Balwani.

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What Elizabeth Holmes regrets

Theranos founder Elizabeth Holmes sits in the backseat of a car after leaving the Robert F. Peckham Federal Building.

Elizabeth Holmes has been called to the stand in her fraud trial.

Photo: Ethan Swope/Getty Images

Nov. 23, 2021

Elizabeth Holmes intentionally hid the use of third-party testing devices from Walgreens, its biggest partner, in order to protect "trade secrets," she testified in her third day on the stand.

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Holmes also admitted she wished she'd done things "differently" when questioned about placing the logos of drugmakers on reports she sent Walgreens.

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Elizabeth Holmes wanted to believe

Nov. 22, 2021

"We thought this was a really big idea," Elizabeth Holmes said Monday as she testified in her own defense against fraud charges in a San Jose courtroom.

That was the essence of the former Theranos CEO's legal strategy as she began her first full day of testimony.

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Elizabeth Holmes takes the stand

Nov. 19, 2021

Theranos CEO Elizabeth Holmes took the stand in a San Jose courtroom on Friday, beginning her testimony in the criminal fraud case against her. Her testimony comes after 11 weeks of prosecution with 29 witnesses called by the U.S. government.

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Why a Theranos backer invested despite the warning signs

Nov. 17, 2021

PFM Health Sciences partner Brian Grossman invested in Theranos despite red flags were raised during diligence, according to evidence presented Wednesday in the ongoing fraud trial of former CEO Elizabeth Holmes.

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A Theranos investor tried to vet the company's claims

PFM Health Sciences partner Brian Grossman PFM Health Sciences partner Brian Grossman leaves the courthouse in San Jose Tuesday. Photo: Biz Carson / Protocol

Nov. 16, 2021

PFM Health Sciences partner Brian Grossman had a laundry list of due diligence questions for the latest investment he was considering.

"How does your accuracy and speed stack up against your traditional tests?"

"What are the limitations of the technology? What tests are not feasible?"

The answers he got back from the company — Theranos — obfuscated the truth, he testified on Tuesday in the ongoing criminal fraud trial of Elizabeth Holmes, the blood-testing startup's co-founder and former CEO.

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The government is almost done with its case against Elizabeth Holmes

Nov. 10, 2021

The U.S. government is entering the home stretch of its case against Elizabeth Holmes. In court on Wednesday, prosecutor Jeff Schenk reportedly told Judge Edward Davila that he thought it was likely that the government's case will wrap up next week.

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Theranos trial reveals the DeVos family invested $100 million

Oct. 27, 2021

Lisa Peterson, a wealth manager for the DeVos family, testified in Elizabeth Holmes's criminal fraud trial Tuesday, as prosecutors continued to highlight allegations about how the Theranos CEO courted investors in the once-high-flying blood-testing startup.

An email presented by the defense revealed that the family committed to doubling their investment in Theranos to $100 million "on the spot" during a 2014 visit to company headquarters.

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Theranos' investor pitches go on trial

Oct. 22, 2021

The Theranos trial continued this week with testimony from Daniel Edlin, a former product manager at the blood-testing startup, and Shane Weber, a scientist from Pfizer. Their testimonies appeared to bolster the government's argument that Holmes intentionally defrauded investors and patients.

The fresh details about audacious and unproven claims made about the viability of Theranos' blood tests and efforts to conceal errors when demonstrating testing equipment added to the evidence against Holmes, who is accused of fraud in her role leading the company.

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Safeway thought it was getting Theranos tech. Instead it got a mess.

Oct. 6, 2021

Former Safeway CEO Steve Burd had big visions for how Theranos' blood testing would fit into his grocery store empire. With results promised within 30 minutes, he could imagine customers getting a blood test, doing their grocery shopping and maybe even having a prescription from their doctor filled at the pharmacy based on the readings before they even left the store.

"This notion of getting results and getting a prescription possibly before leaving the store, we knew it would be appealing to customers," the former CEO testified in a San Jose courtroom Wednesday as part of Elizabeth Holmes' ongoing fraud trial.

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Theranos' former lab director turns out to be a key whistleblower

Oct. 5, 2021

The witness list at the Theranos trial is stuffed with high-powered names from Henry Kissinger and James Mattis to known whistleblowers Erika Cheung and Tyler Shultz. But the most important witness to come out of the Elizabeth Holmes fraud case so far is a name most people didn't know: Adam Rosendorff.

The former lab director has turned into a key witness for the prosecution. He's spent the most days on the stand of any witness so far, including an aggressive four-day cross-examination from Elizabeth Holmes' attorney Lance Wade who the judge said was "grilling" Rosendorff. Holmes is facing 10 counts of wire fraud and 2 counts of conspiracy to commit wire fraud in connection with her leadership of the now-defunct medical diagnostics startup.

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Theranos 'valued PR and fundraising' over patients, a former lab director says

Sept. 24, 2021

Former Theranos lab director Adam Rosendorff testified Friday that he repeatedly raised the alarm about bad blood tests to then-CEO Elizabeth Holmes, ultimately concluding that the company valued press and funding more than the patients.

"I was very enthusiastic working at Theranos in the beginning. Over time, I came to realize that the company really valued PR and fundraising above patient care, and I became very disillusioned," Rosendorff said on the witness stand inside the San Jose courtroom where Holmes' trial on fraud charges began this month.

The testimony of the Theranos lab director repeatedly tied Holmes to the problems at the Theranos lab, showing the CEO was well aware of the issues and included directly in complaints about the quality of the tests.

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A Theranos lab worker says blood tests were like "flipping a coin"

Did Theranos' blood-testing technology work? That was the key question prosecutors hammered away at as the fraud trial of former CEO Elizabeth Holmes continued Wednesday in a San Jose courtroom.

The company's proprietary Edison machines routinely failed quality control tests to the point that former lab employee Erika Cheung said she sometimes refused to run patient samples on the devices, she testified in court.

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Theranos by the numbers: Do forecasts show fraud or failure?


Elizabeth Holmes and her mother leave the courthouse in San Jose on Tuesday, Sept. 14, 2021. | Photo: Biz Carson/Protocol

Sept. 14, 2021

Theranos inflated its revenue projections when, behind the scenes, insiders knew the startup had widening losses and dwindling revenue, prosecutors argued on the second day of the Elizabeth Holmes trial.

The testimony was the first glance under the hood of Theranos, a blood-testing company which once promised to revolutionize the detection of disease. Holmes, its former CEO, is standing trial for wire fraud and conspiracy to commit wire fraud in San Jose.

One of the prosecution's key arguments is that Theranos wildly inflated its revenue projections to attract investors.

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Fraud or mistakes? Opening trial arguments debate how much Elizabeth Holmes knew

Holmes has pleaded not guilty to 12 counts of fraud and conspiracy to commit fraud. | Photo: Nick Otto/AFP via Getty Images

Sept. 8, 2021

To the U.S. government, Elizabeth Holmes is a fraudster bent on lying and cheating to get money for her company while deceiving investors and the public on how little its lab work could actually do.

But Holmes' lawyers argue that she isn't a villainous CEO who purposefully deceived everyone. Rather, she's a young Silicon Valley founder who believed so much in her vision and product that she never sold a share and thought that the company's challenges could eventually be overcome.

"Elizabeth Holmes did not go to work every day intending to lie, cheat and steal," said Lance Wade, Holmes' attorney from Washington D.C.-based firm Williams & Connolly. "The government would have you believe her company, her entire life, is a fraud. That is wrong. That is not true."

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The Theranos trial is underway. Here's what it looks like at the court.


TV cameras surround former Theranos CEO Elizabeth Holmes as she enters the San Jose courthouse for her fraud trial. | Photo: Biz Carson/Protocol

Sept. 8, 2021

Spectators arrived in the middle of the night to get their place in line for the start of Elizabeth Holmes fraud trial. There were 30 people in line by 5:45 a.m. and a line snaked out the front gates of the courthouse before it even opened at 7:30.

Here to watch the trial is a mix of curious onlookers who have followed John Carreyrou's "Bad Blood" work, law students wanting to observe the trial, and a large mix of press including tech publications and international outlets from the U.K. and Norway. Seating is limited in the courtroom with only 34 seats open to the public and another 45 in an overflow room.

One of the more puzzling sights was three blonde women dressed in Holmes' typical style as CEO, with hair pulled back and a black turtleneck.

Silicon Valley wants to forget Elizabeth Holmes

Sept. 7, 2021

When Elizabeth Holmes stands trial this week, her defense could involve a few options. Her lawyers might argue she was abused by former Theranos COO and boyfriend Sunny Balwani and believed what he said was true, according to newly unsealed documents. (He denies it.)

Then there's another tack that's been hotly contested in the run-up to the trial: the "This is just how Silicon Valley works" defense.

Inevitably, it's not just Holmes on trial for the alleged fraud that vaporized a lab-testing company once worth nearly $10 billion. Silicon Valley's culture will be examined for its habit of enthusiastically embracing visionaries and supporting those who took a "fake it till you make it" approach that has let a lot of companies grow.

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For former employees, the stain of Theranos is hard to wash away

Theranos logo outside office building


Theranos headquarters. | Photo: Andrej Sokolow via Getty Images

Aug. 31, 2021

The first time Charlie realized that his time at Theranos might become a scarlet letter on his resume was in May of 2016.

It was a full seven months after reporter John Carreyrou published his first explosive exposé on the company, accusing Theranos' leaders of covering up serious accuracy issues with its widely hyped blood-test machines. Until that point, Charlie, a pseudonym for a former Theranos employee who agreed to speak with Protocol on the condition of anonymity, says he was "sipping the Kool-Aid," believing the company's CEO Elizabeth Holmes and COO Sunny Balwani when they said the Journal's accusations were bogus.

In the spring of 2016, though, Charlie saw for himself for the first time how the company's top brass was exaggerating its device's capabilities to outsiders — just like Carreyrou said they were. Charlie had just begun interviewing with other companies when the CEO of the very first startup he applied to stopped him short. "I was told by the CEO that their investors advised him not to hire anybody from Theranos, given what was going on in the media," Charlie said. "That was a wake-up call for me."

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