Holmes guilty of fraud and conspiracy — faces up to 20 years in prison

Elizabeth Holmes, center, walks into federal court in San Jose this morning. AP photo.

A jury in San Jose this afternoon found former Theranos CEO Elizabeth Holmes guilty of four counts of fraud and conspiracy for duping investors with a flawed blood-testing technology that she hailed as a medical breakthrough.

The jury found her innocent of four felony charges related to defrauding patients. On the three remaining charges, the jury was deadlocked.

Holmes could now face up to 20 years in prison for each count. No sentencing date has been set yet.

The former Palo Alto entrepreneur, who had bowed her head several times before the jury was polled by the judge, remained seated and expressed no visible emotion as the verdicts were read.

Her partner, Billy Evans, showed agitation in earlier moments but appeared calm during the verdict reading.

After the judge left the courtroom to meet with jurors individually, Holmes got up to hug Evans and her parents before leaving with her lawyers. Evans later emerged in the hallway outside the courtroom, looking visibly shaken and emotional.

“For all intents and purposes, the government only needs a guilty verdict on one count,” said Keri Curtis Axel, a former federal prosecutor now working as a trial lawyer at the Los Angeles law firm Waymaker.

The jury found Holmes guilty of one count of conspiracy to commit wire fraud and three counts of defrauding Theranos investors, including a $100 million investment by the family of former Secretary of Education Betsy DeVos, a $38 million investment by a hedge fund and a $6 million investment by a former attorney at Cravath, Swain & Moore.

The jury found Holmes innocent of conspiracy to commit wire fraud against patients and not guilty of two charges related to erroneous results received by two patients who took Theranos blood tests at Walgreens.

The jury also acquitted Holmes on a charge of wire fraud based on Theranos’s ad purchases for its Walgreens services.

The jury, sworn in on Sept. 2, began deliberations on Dec. 20 and continued for multiple days during the holiday weeks before reaching its verdict this afternoon.

After starting Theranos in 2003 as a 19-year-old college dropout, Holmes began working on a technology that she repeatedly promised would be able to scan for hundreds of health issues with just a few drops of blood taken with a finger prick. Conventional methods requires a needle inserted into a person’s vein to draw a vial of blood for each test, which must then be carried out at large laboratories.

Holmes believed she could provide more humane, convenient and cheaper blood tests with “mini-labs” in Walgreens and Safeway stores across the U.S., using a small testing device dubbed “Edison” in homage to the famous inventor.

The concept proved to be compelling. Theranos raised more than $900 million from a long list of elite investors, including savvy billionaires such as media mogul Rupert Murdoch and software magnate Larry Ellison.

But most people didn’t know that the Theranos blood-testing technology kept producing misleading results that led the company to secretly rely on conventional blood testing. Evidence presented at the trial also showed Holmes lied about purported deals that Theranos had reached with big drug companies such as Pfizer and the U.S. military.

In 2015, a series of explosive articles in The Wall Street Journal and a regulatory audit of Theranos’ lab uncovered potentially dangerous flaws in the company’s technology, leading to the company’s eventual collapse. — From the Post’s wire services.

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