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Jury Finds Theranos' Founder Elizabeth Holmes Guilty Of Fraud And Conspiracy

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by Tyler Durden
Tuesday, Jan 04, 2022 - 10:44 AM

(Update 7:15pm ET) - The jury (of 8 men and 4 women) has returned a verdict at about 7:15 pm ET, finding Holmes guilty on "multiple" counts. The verdict comes after "seven days of deliberations spanning more than 50 hours", according to CNBC.

Holmes has been found guilty on 4 charges, including one count of conspiracy and 3 wire fraud charges that can cost Holmes up to 20 years in prison (as well as a fine of $250,000 plus restitution), per count. 

The jury found her not guilty of four other felony charges. On the three remaining charges, the jury was deadlocked.

1. Conspiracy to commit wire fraud against Theranos investors: Guilty

2. Conspiracy to commit wire fraud against Theranos paying patients: Not guilty

3. Wire fraud against Theranos investors: wire transfer of $99,990 from Alan Jay Eisenman: No verdict

4. Wire fraud against Theranos investors: wire transfer of $5,349,900 from Black Diamond Ventures: No verdict

5. Wire fraud against Theranos investors: wire transfer of $4,875,000 from Hall Phoenix Inwood Ltd.: No verdict

6. Wire fraud against Theranos investors: wire transfer of $38,336,632 from PFM Healthcare Master Fund: Guilty

7. Wire fraud against Theranos investors: wire transfer of $99,999,984 from Lakeshore Capital Management LP: Guilty

8. Wire fraud against Theranos investors: wire transfer of $5,999,997 from Mosley Family Holdings LLC: Guilty

9. Prosecutors dropped this count in November, after making an error that put the count in peril.

10. Wire fraud against Theranos paying patients: wire transmission of patient E.T.’s blood-test results: Not guilty

11. Wire fraud against Theranos paying patients: wire transmission of patient M.E.’s blood-test results: Not guilty

12. Wire fraud against Theranos paying patients: wire transfer of $1,126,661 used to purchase advertisements for Theranos Wellness Centers: Not guilty

Holmes remained seated and expressed no emotion as the verdicts were read. Her partner Billy Evans likewise remained still.

"She chose fraud over business failure. She chose to be dishonest with investors and with patients," prosecutor Jeff Schenk said in his closing statement.

*  *  *

(Update 6:35pm ET) - It appears that the judge's instructions to the jury to iron out their differences and come to a unanimous decision on all 11 counts have failed to inspire agreement, and moments ago the jurors told the court that "after considering all evidence and given instruction we have conclude that we cannot reach a unanimous verdict on 3 charges."

So what happens next? Apparently, the the judge has indicated he’ll allow the jury to reach a verdict on eight of the 11 charges she’s facing, and on which the jury can agree on.

As Bloomberg notes, U.S. District Judge Edward Davila made his comments in court on the seventh full day of deliberations by the jury, which heard evidence from dozens of witnesses over the three-month trial. Jurors told the judge earlier on Monday that they were struggling to reach consensus on three charges.

The panel of eight men and four women must decide whether Holmes, 37, is guilty of fraud and conspiracy charges filed in 2018, the same year that her blood-testing startup collapsed after previously reaching a valuation of $9 billion.

Holmes is facing a maximum sentence of 20 years in prison if convicted.

And now we wait for the jury's verdict on the 8 counts in which it could reach a decision.

* * *

It looks as though the Elizabeth Holmes saga is nowhere close to over, and certainly not short of suspense. 

In a note jurors sent to the judge overseeing the Holmes trial on Monday morning, jurors said that they had been unable to reach a unanimous verdict on 3 of the 11 counts against Holmes, the WSJ reported, raising the specter of a hung jury.

The judge has reportedly encouraged the jury to work through their stalemate, advising the jury they can take as much time as they'd like, according to Bloomberg headlines mid-day Monday. The judge also reportedly asked jurors to "re-examine their own views" while lawyers for both sides have been "arguing" over what the next step for the trial should be.

The note was delivered to the judge just before 10AM local time, the WSJ continued. “Take as much time as you need to discuss things. There is no hurry,” Judge Davila told the jury. He also told the jury to tell the court if they had additional questions. 

Upon hearing the news, WSJ reports that Holmes "hugged her mother and partner". Here is the slew of headlines that hit around 2PM EST:

  • HOLMES JUDGE WILL ASK JURY TO KEEP DELIBERATING ON 3 COUNTS
  • HOLMES JUDGE READS TO JURY INSTRUCTIONS AGREED ON BY LAWYERS
  • HOLMES LAWYER, PROSECUTORS ARGUING OVER NEXT STEP FOR JURY
  • HOLMES JUDGE READS TO JURY INSTRUCTIONS AGREED ON BY LAWYERS
  • HOLMES JUDGE ENCOURAGES 12-PERSON JURY TO WORK THROUGH IMPASSE
  • HOLMES JUDGE ADVISES JURORS: `RE-EXAMINE YOUR OWN VIEWS' 
  • HOLMES JUDGE CAUTIONS JURORS: `THERE IS NO HURRY' 

Closing arguments were made in Holmes' criminal trial in late December and the jury received its final instruction from the presiding judge before beginning deliberations during the last week of December.

The jury deciding her fate consists of eight men and four women. They are tasked with trying to decide whether or not Holmes is guilty of both fraud and conspiracy charges that were leveled against her in 2018.

If convicted, she faces up to 20 years in prison. 

As we have noted in previous writeups, Holmes' defense has been that her company failed and she made a series of business mistakes. Prosecutors portrayed Holmes as "exaggerating the capabilities and reliability of Theranos testing machines she pitched as revolutionary," Bloomberg reported.

Throughout the trial, jurors heard from lab partners, former employees and patients. 

Holmes also took the stand in her own defense for seven days. She spent her time "deflecting blame", "failing to remember" things and "accepting responsibility" for some mistakes, the report says.

The defense claimed that Holmes never intended to deceive anyone.

Assistant U.S. Attorney Jeff Schenk said during closing arguments that she “made the decision to defraud her investors and then to defraud patients.” 

“She chose fraud over business failure,” Schenk continued.

Holmes' attorneys have claimed there is a “fundamental disconnect” between allegations of intentionally deceiving investors and making honest mistakes. 

“She believed she was building a technology that would change the world,” Holmes' attorney, Kevin Downey, said. He claimed Holmes "sacrificed her youth, friends and family relationships," to make Theranos work. “She stayed. Why? Because she believed in this technology,” Downey told the jury. “She stayed the whole time. She went down with this ship.”

 

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