Theranos founder Elizabeth Holmes has been convicted of investor fraud after months of landmark litigation in California.
Prosecutors said Holmes knowingly lied about technology that they said could detect disease with a few drops of blood.
The jury found Holmes guilty on four counts, including conspiracy to defraud investors and three cases of wire transfer fraud.
She denied the charges, which carry a maximum prison sentence of 20 years each.
Holmes has not been taken into custody, the date of the sentencing has not yet been confirmed and another hearing is scheduled for next week.
She faced a total of 11 charges and was found not guilty of four charges of defrauding the public.
The split verdict came after the judge said the jury could reach a partial verdict after seven days of deliberation after failing to reach consensus on three other points.
Theranos, valued at $ 9 billion (£ 6.5 billion) at a time, was once Silicon Valley’s darling.
The company promised to revolutionize the healthcare industry, but its claims began to unravel in 2015 after an investigation by the Wall Street Journal found its core blood testing technology was not working.
For almost four months, the jury made up of eight men and four women were presented with two completely different reports about the former self-made billionaire, whose demise shook Silicon Valley.
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Prosecutors called about 30 witnesses trying to prove that Holmes knew the product they were selling to investors was a sham, but remained reliant on the company’s success.
In the process, several lab managers testified that they told Holmes about the flaws in Theranos’ technology but were directed to downplay their concerns. At the same time, Holmes informed investors that the technology was working as planned.
Holmes “chose fraud over business failure. It chose to be dishonest with investors and patients,” said prosecutor Jeff Schenk in his closing arguments. “This decision was not only numb, it was criminal.”
The defense countered with descriptions of a dedicated and motivated businesswoman making waves in a male-dominated industry.
Holmes testified in her own defense, admitting errors in Theranos’ operation but claiming she never knowingly defrauded patients or investors.
The defense also blamed Ramesh “Sunny” Balwani, Holmes’ former business associate and long-time friend.
At the trial, Holmes accused 19-year-old Mr. Balwani of emotional and sexual abuse – allegations he denies.
Elizabeth Holmes claimed her diagnostic equipment could test hundreds of diseases. They could not.
Given that she was the founder and CEO of Theranos, you’d think the case would be an easy win for prosecutors. But the convictions were by no means certain for a number of reasons.
These technical fraud cases are extremely difficult to track. The jury was asked to examine hundreds of documents and examine the evidence from dozens of witnesses.
Holmes just had a baby and some commentators believed she would appeal to a personable character.
The difficulty of successfully prosecuting Holmes is reflected in the judgments – a real mix of judgments made by the jury.
But given how difficult it is to prosecute cases of economic fraud, the government will be happy with what is stuck.
Her former partner Sunny Balwani will now be charged with similar charges in the same court next month. It is likely that Holmes will not be convicted until after the trial is over.
The ruling sends a clear and frank message to the founders of Silicon Valley – there are consequences if you tell investors things that are not true.
US Prosecutor Stephanie Hinds thanked the jury, who she said had conducted a “complex case” over 15 weeks to deliver her verdict.
“The convictions in this case reflect Ms. Holmes’ guilt for this large-scale investor fraud and she must now be convicted of her crimes,” the prosecutor said in a statement read by an assistant.
Holmes started Theranos as a teenager shortly after dropping out of chemical engineering at Stanford University.
She has raised more than $ 900 million from billionaires like media tycoon Rupert Murdoch and tech mogul Larry Ellison.
After the scandal, the company officially ceased operations in 2018.