new York Probably the most watched process in the US since the trial against O. J. Simpson ends with a guilty verdict: The jury in San José, California sees the fraud committed by Elizabeth Holmes, founder of the blood test start-up Theranos, on her investors as proven. The former Silicon Valley star had led the donors to believe that he could analyze up to 70 different values - from cholesterol to cancer indicators – with a single drop of blood. In fact, the technology never worked.
As with O. J. Simpson, the media followed every court day closely. Entrance lines in front of the court were just as much a part of the trial as the Holmes doubles – women who dressed like the defendant and thus assisted her in the courtroom. Holmes’ strangely dependent-looking relationship with her much older former deputy, business and life partner Ramesh Balwani also came on the table in the process. Every possible defense strategy was analyzed down to the last detail. The start of the process was also postponed because the 37-year-old had a child in August with her current partner, the hotel heir William Evans.
The trial lasted 15 weeks and the jury has now found Holmes guilty on four out of eleven counts. It was all about defrauding investors. The jury acquitted her of cheating on patients. The jurors disagreed on three counts of financial fraud.
Now the court has to pronounce the verdict in the coming weeks, which can mean up to 20 years imprisonment per charge. The maximum is considered unlikely because Holmes has no criminal record. However, having wiped out $ 945 million in investor funds, she is likely to have to go to jail for an extended period of time. An appeal would be admissible.
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The “Wall Street Journal” exposed the fraud six years ago. The newspaper reported how Holmes falsified blood tests for their presentations by running classic blood tests in the background. At the time, the company, which was founded in 2003, had numerous well-known ex-politicians and ex-military officials such as Henry Kissinger and James Mattis on board as investors. Ironically, one of the financiers who lost their investment was Rupert Murdoch, owner of the Wall Street Journal.
Personality cult and charm
Wade Miquelon, the chief financial officer of the Walgreens pharmacy chain, was also convinced by Holmes. Walgreens invested $ 140 million in the company and set up Theranos test stations in 40 stores. But they didn’t work as advertised. In the end, the tests were not carried out with the company’s devices, but with laboratory technology from other classic manufacturers.
The company had long been controversial in the biotech industry because experts could not imagine how the tests would work with the state-of-the-art technology at the time. The non-specialist investors had been drawn to Holmes’ charm before the company was finally wound up in 2018.
It was probably also that charm and personality cult that brought this process so much attention: There was the gifted girl who learned Mandarin during school and took courses at the elite Stanford University in the summer before dropping out of her studies there at the age of only 19. The woman who made it to the top in male-dominated Silicon Valley.
Theranos founder found guilty of fraud
Her parents were well connected in Washington political and business circles. Her father had worked as Vice President for the Texas energy company Enron for a number of years before it also imploded in a spectacular fraud scandal. Holmes himself was a fan of Apple founder Steve Jobs, mostly wore a black turtleneck and spoke in a deep, low voice to imitate her idol. In 2015, the business magazine “Forbes” estimated her fortune from her stake in Theranos at 4.5 billion dollars. “Time” magazine ranked her among the 100 most influential people in the world.
With Theranos and Holmes, a cultural practice widespread in the start-up scene was also on trial in San José. The slogan “Fake it till you make it” is a rule of conduct for many founders: Pretend until you’ve really made it. That was as true for Holmes as it was for Wework founder Adam Neumann, who built a real estate empire based primarily on billions of dollars that investors never saw again.
Holmes testified at the trial that she sincerely believed in the technology but, as the boss, was not aware of all of the problems. For a conviction, the prosecutors had to convince the jury – eight men and four women – that Holmes had fraudulently misinformed investors and tolerated errors in testing patients.
The prosecutors picked the cases of two patients and six transfers from Theranos donors between almost 100,000 and around 100 million dollars from the years 2013 and 2014. Holmes, who was released on bail, took the verdict without moving and left the court through a side door.
More: Cheater or Failed? Ex-billionaire Elizabeth Holmes faces 20 years in prison