Holmes, the former CEO and founder of the failed startup of blood tests Theranos, was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty of three additional charges of wire fraud and one count of conspiracy to commit wire fraud. The jury did not rule on three cases of fraud.
A total of 32 witnesses were called to testify within 15 weeks, culminating in a lengthy testimony from Holmes himself. Federal prosecutors tried to deliberately mislead investors, doctors and patients about the potential of the company’s blood test technology for financial gain. Holmes’ defense, on the other hand, tried to undermine it by testifying that she was a true believer in technology, acted in good faith, relied on the expertise of others, and lacked the intention to deceive.
Holmes faces up to 20 years in prison and a fine of $ 250,000 plus redress for each count of wire fraud and conspiracy.
Holmes testifies to his own defense
While Holmes was mostly calm and direct on the stand, even smiling as she answered some questions, she became emotional on several points as she talked about her ex-boyfriend and Theranos’ former president and COO, Ramesh “Sunny” Balwani.
She pointed to Balwani as being responsible for parts of Theranos that are relevant to the allegations, including overseeing the clinical laboratory and the company’s financial estimates. Holmes also said that she considered him the most important advisor to her at Theranos.
“He influenced everything about who I was and I do not quite understand it,” she said.
Holmes admits to having added pharmaceutical logos to Theranos reports
Among the many internal documents used by the prosecution to base its case against Holmes, two received particular attention: a couple of reports sent to Theranos’ investors with the logos of the pharmaceutical companies Pfizer and Schering-Plow prominent at the top. . While their location gave some witnesses the impression that these companies had prepared or at least sanctioned the reports, the prosecution determined that the reports were in fact made by Theranos.
In a striking moment, Holmes testified that she herself added pharmaceutical company logos in reports shared with investors “because this work was done in collaboration with these companies and I tried to convey it.” But Holmes also noted that she heard testimonies from witnesses who said they believed the reports indicated an endorsement of Theranos’ technology by the companies. She said she wished she had “done it differently.”
A former defense minister testified
Mattis said he was interested in the unit’s possible military uses because he thought it could perform the range of blood tests the company claimed it could. “I would not be interested in it if it were not,” he said.
Mattis testified that at some point, after increasing scrutiny of the company’s test properties, “I no longer knew what to think of Theranos.”
Former Theranos lab directors take the stand
After leading Theranos’ laboratory from April 2013 to November 2014, Rosendorff said he left the company and felt “very skeptical” about the accuracy and reliability of the tests. He testified that he felt it “was a matter of my integrity as a doctor” not to stay in the company and continue to approve test results he “did not believe in.” He said he “came to believe that the company believed more in PR and fundraising than in patient care.”
In one of the foreign testimonies from the trial, jurors also heard from Rosendorff’s short successor as laboratory director, Sunil Dhawan.
Dhawan, a dermatologist, testified that Balwani – who had been a patient with him for about 15 years – asked him if he would take on the role of Theranos. According to an email exchange, Balwani told Dhawan “the time commitment is very minimal,” noting that it “would mostly be a guard consultant role.”
Dhawan said he worked only “five or 10” hours at Theranos between November 2014 and early summer 2015. He did not interact with any patients, doctors or Theranos staff during that time, he testified and visited Theranos only a few times. “I think I went, and then I went again. And that was about it,” he said.
In his closing arguments, prosecutor Jeffrey Schenk returned to the testimony of the laboratory directors. “Dr. Rosendorff complains about accuracy, and asks them to do more skill testing. They replace him with are Sunny Balwani’s dermatologist who works five hours over six or seven months, and Lynette Sawyer, who works less.”
Billionaire families and conspicuous absences
While members of these families did not testify directly, jurors heard from Lisa Peterson, CEO of the DeVos Family Investment Fund, and Daniel Mosley, a real estate lawyer who introduced several of what he called “high-quality families” to Theranos and whose clients included Secretary of State Henry Kissinger.
Kissinger, who was one of Holmes ‘most vocal supporters and sat on Theranos’ board, was on the government’s list of possible witnesses, but ultimately did not take a stand. Another major Holmes supporter whose name was on the witness list, billionaire media mogul Rupert Murdoch, did not testify either.
Holmes expressed regret for the way she handled the situation. “I could not say more strongly, the way we handled the Wall Street Journal process was a disaster,” she testified. “We totally messed it up.”
Sara Ashley O’Brien contributed to this report.