Elizabeth Holmes was accused of intentionally deceiving patients and investors about the capabilities of her blood-testing startup Theranos Inc., which promised to revolutionize healthcare by using just a few drops of blood from a finger prick to test for a wide range of health conditions. Instead, prosecutors alleged, the company’s proprietary technology was faulty and Theranos hid that it used commercial devices for most of its tests.
On Monday, a jury found Ms. Holmes guilty on four of 11 counts of wire fraud or conspiracy to commit wire fraud. Each count carries a maximum prison sentence of 20 years. Here are the counts and the jury's verdict.
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
The guilty verdicts against Elizabeth Holmes mean the Theranos founder could be going to prison for years.
Sentencing is a complex and time-consuming process, and many steps still stand between Ms. Holmes and any potential prison time.
She likely will be allowed to stay free on bail until her sentencing, which could take place six months or more from now, sentencing experts said.
The first step is having a probation officer look through the facts of the case and put together a detailed pre-sentence report. This has to be provided to each side at least 45 days ahead of the sentencing hearing.
The report will analyze what sentence seems appropriate under nonbinding federal guidelines, which include factors such as criminal history, the amount of money lost, whether someone was a leader or low-level participant in a crime and whether any special skills were used to commit the crime. "It gets really complicated in a hurry," said Douglas Berman, a professor at The Ohio State University Moritz College of Law who wrote a casebook on sentencing law.
Ms. Holmes's lawyers and the government can then push back on that report, filing their own interpretations of the guidelines and what sentences they think Ms. Holmes deserves.
There is no mandatory minimum sentence for the conspiracy and wire fraud counts she was convicted of, and each count carries a maximum of 20 years. In some cases, like the 150-year sentence given to Ponzi scheme operator Bernie Madoff, the maximum for each count is stacked. In most fraud cases, stacking isn't the norm, Mr. Berman and others familiar with sentencing said.
The final decision rests with U.S. District Judge Edward Davila, who oversaw Ms. Holmes's trial. Judges are guided to hand down a sentence that is "sufficient but not greater than necessary to achieve the purposes of punishment," Mr. Berman said.
From there, Ms. Holmes can request to stay out on bail pending an appeal of her conviction. If a sentence is relatively short, like two years or less, defense lawyers can often succeed in keeping white-collar defendants out of jail during an appeal, Mr. Berman said. For longer sentences, he said, the argument is much harder to make.
Elizabeth Holmes Trial: Live Updates
Elizabeth Holmes, founder of failed blood-testing startup Theranos Inc., was found guilty on four of 11 criminal-fraud charges. The conclusion comes roughly four months after testimony began, and brings to a finale the startup saga that gripped Silicon Valley. Follow the latest developments.
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