Elizabeth Holmes is found GUILTY of four counts at her fraud trial and faces 20 years in prison: Jurors convict Theranos founder of defrauding investors but acquit her on four other charges and fail to reach verdict on three more
By Melissa Koenig and Harriet Alexander For Dailymail.com
Elizabeth Holmes has been found guilty of four counts of wires fraud after a jury in San Jose found that she deceived investors into sinking more than $945 million into her faulty blood testing machines.
The former Theranos CEO is facing up to 20 years in jail - with each count of her sentence likely to be served concurrently. She is expected to appeal.
Holmes, 37, who modelled herself on Bill Gates and Steve Jobs, won widespread acclaim - including from Harvard University and Time magazine - for a phoney technology which she claimed would revolutionize blood-testing methods by using miraculously tiny volumes of blood, such as from a finger prick.
Theranos raised just shy of a billion dollars from venture capitalist titans including Tim Draper, Donald Lucas and Dixon Doll; wealthy heirs to the founders of Amway, Walmart and Cox Communications; and heavyweights of tech and media such as Larry Ellison and Rupert Murdoch.
Holmes ignored reporters' questions as she walked out of the courthouse holding hands with her husband Billy Evans, mother Noel and father Christian in San Jose on Monday evening after the verdicts were returned.
It is not clear where Holmes went last night but prior to the court case she had been staying at a sprawling 75-acre, $135million estate in Silicon Valley, which is known for 'lying low.'
Since March, Holmes and her husband Evans had been living quietly on the Green Gables Estate, presumably renting one of the six smaller properties dotted around the vast grounds.
If sent to jail, Holmes would be the most notable female executive to serve time since Martha Stewart did in 2004 after lying to investigators about a stock sale. A sentencing date has not yet been set.
Elizabeth Holmes is seen leaving court on Monday, having been found guilty on four counts
Holmes holds hands with her boyfriend Billy Evans and her mother, Noel, as they leave court
Evans, Holmes, her mother Noel, and father Christopher all hold hands as they leave court in San Jose on Monday night
Holmes, seen here entering court on Monday, claimed she never meant to mislead any of the investors in her company
Holmes, center, walks to federal court in San Jose, California, on Monday, January 3 as the jury resumed deliberations for the seventh day after an extended holiday break
Elizabeth Holmes found guilty of four counts
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
After seven days deliberating, the jury earlier on Monday said it was unable to reach a unanimous verdict on three of the 11 criminal counts she faces.
The judge told them to press ahead, with the four guilty verdicts and four acquittals later shared with the court.
Holmes was facing nine counts of wire fraud and 12 counts of conspiracy to commit wire fraud.
Her trial was postponed several times, because of the COVID-19 pandemic and Holmes's pregnancy.
She gave birth to a boy in July in Redwood City, California - her first child, with San Diego hotel heir Billy Evans, who often accompanied her to trial alongside her mother, Noel Holmes.
During the trial, which began in September, jurors heard testimony from former Theranos employees who said they left the company after witnessing problems with its technology.
Investors testified that Holmes made misleading claims about Theranos, such as that its machines were being used in the field by the U.S. military.
Former patients told jurors that they would not have used Theranos' tests if they had known the tests were flawed.
Prosecutors said had Holmes been truthful with investors and patients, the venture never would have attracted critical funding and revenue.
'She chose fraud over business failure. She chose to be dishonest,' Assistant U.S. Attorney Jeff Schenk said at the start of closing arguments.
'That choice was not only callous, it was criminal.'
Holmes could face up to 20 years in prison, as well as a fine of $250,000 plus restitution for each of the nine counts of wire fraud two counts of conspiracy.
Earlier on Monday jurors told US District Judge Edward Davila saying they could not reach a verdict on three of her 11 counts, though they did not specify which counts they were unable to reach a verdict for.
Following the announcement, Judge Davila publicly raised the possibility of a partial verdict if the jurors remain conflicted on returning verdicts for any of the charges.
How Holmes generated hype worth $10 billion with her Edison blood-testing machine which turned out to be a dud
At the center of the Theranos dream was a small appliance about the size of a coffee machine dubbed the Edison.
The machine was supposed to run dozen of simultaneous blood tests from a sample which was up to 1/1000th the volume that would be required in top laboratories.
In reality, the Edison could not perform more than 12 tests, former lab associate Erika Cheung told the jury earlier in the trial.
Theranos' miniLab (pictured) was advertised as a new technology that could provide blood test results in a matter of minutes
Even then, 'the Edison analyzer could only run one type of test for one patient at a given time,' Cheung said when she took the stand in September.
The Edison was designed to perform immunoassays. These biochemical tests can measure the presence or concentration of a macromolecule in a solution through use of an antibody or antigen.
Immunoassays can be used to check drug and hormone levels and also identify cancer markers.
Theranos offered a testing menu of 240 different checks it could make on the blood - including everything from celiac to cocaine.
Inside the machine a robotic arm was supposed to mimic what a chemist would do in a real lab: taking samples, diluting them, adding antibodies and reagent, and revealing a result.
But the Edisons did not just fail in carrying out accurate tests - they could barely work at all.
The doors wouldn't close properly, parts of the machine would fall off and it could not properly regulate its temperature.
Engineers who worked tirelessly to fix the problems were often summarily fired by Holmes when they raised issues.
He then ordered them to deliberate further under an 'Allen charge,' and instructed the eight men and four women who comprise the jury to do their best to reach a verdict, reminding them that Holmes is presumed innocent 'unless or until the government proves her guilt beyond a reasonable doubt.'
If the jury was still unable to reach a verdict, Davila said, a mistrial could be declared on those three counts and Holmes could be retried.
The jury sifted through three months of testimony and more than 900 pieces of evidence as they decided whether she intentionally deceived investors, business partners, patients and advertisers in the quest for investments for her blood testing startup.
Holmes founded Theranos in 2003, and dropped out of Stanford the next year as she raised money for her new blood testing device.
She repeatedly claimed that the company's new testing device could scan for hundreds of diseases and other problems with a few drops of blood taken with a finger prick, instead of a needle stuck in a vein.
The results, she claimed, could come within a matter of minutes.
The concept was so compelling that Theranos and Holmes were able to raise more than $900 million, some of that from billionaire investors such as media magnate Rupert Murdoch and software titan Larry Ellison.
Murdoch lost $125m while the DeVos family - including Trump-era Education Secretary Betsy DeVos -invested $100m they never got back.
Other notable figures who lost large amounts include former Secretary of State Henry Kissinger, who invested $3 million,ex-Defense Secretary Jim Mattis, who lost $85 million, and New England Patriots owner Robert Kraft, who invested $1 million.
Also duped was the Walton family, who own Walmart. They sunk a cool $150 million into Theranos.
The Palo Alto, California, company also negotiated potentially lucrative deals with major retailers Walgreens and Safeway. Holmes soon began to grace national magazine covers as a wunderkind.
At Theranos' height, Holmes had amassed a fortune of $4.5 billion on paper and was being lionized as a visionary on cover stories in business magazines.
But unbeknownst to most people outside Theranos, the company's blood-testing technology was flawed, often producing inaccurate results that could have endangered the lives of patients who took the tests.
After the flaws were exposed by the Wall Street Journal in 2015 and 2016, Theranos eventually collapsed. The Justice Department filed its criminal case in 2018.
Over the course of the trial, prosecutors called 29 witnesses including former Theranos employees, retail executives and even a former US Defense Secretary as they attempted to prove that Holmes 'chose fraud over business failure,' as Jeff Schenk, an assistant US attorney said in his closing arguments, according to the New York Times.
The defense, meanwhile, rested much of their case on Holmes' own testimony.
She said she believed the claims she made about Theranos' miniLab and did not find out until it was too late that it did not work as promised.
Holmes's lawyer Kevin Downey told the jury last month that Holmes didn't realize the scope of the problems with the miniLab until a Theranos laboratory director informed her in March 2016 that the company had to invalidate 60,000 of its past blood tests.
He likened Holmes' final days at the company to a captain valiantly trying to save a sinking ship, and said that if she had committed any crimes, she would have been scurrying to jump overboard like a scared rat, Downey, told jurors as he wrapped up roughly five hours of closing arguments.
Holmes is seen in the lab in a grab from the HBO documentary The inventor: Out for Blood in Silicon Valley
The main house at Green Gables is pictured. Holmes and her husband are believed to have been renting one of the smaller properties on the grounds, of which there are six
Since March, Holmes and her husband had been living quietly on the Green Gables Estate in Silicon Valley, presumably renting one of the six smaller properties dotted around the vast grounds that recently went on sale for $135million
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But not only did she never sell a share, Downey said, she continued to try to salvage the company.
Her turnaround efforts included ousting Theranos' chief operating officer, Sunny Balwani, who also had been her lover.
Taking the stand in November, Holmes acknowledged some of the government's points about the failures of the miniLab and the company's lofty goals, she maintained she never intended to deceive anyone.
She alleged that she was the victim of a decade-long abusive relationship with Balwani,who, she testified, had been secretly controlling her diet, her friendships and more while claiming it would help her succeed in the business world.
Balwani, who is also facing fraud charges and will stand trial next month, has denied the allegations.
Near the end of her testimony, CNN reports, she also testified that while she was not aware about everything that happened at Theranos, she 'never' took any steps to mislead anyone who invested in the company.
'They were people who were long-term investors and I wanted to talk about what this company could do a year from now, five years from now, 10 years from now,' she claimed.
'They weren't interested in today or tomorrow or next month,' she said.
'They were interested in what kind of change we could make.'
The line of journalists and spectators hoping to get a seat in the courtroom began forming on many days in the pre-dawn darkness outside the federal courthouse in San Jose, the heart of Silicon Valley.
Some people reportedly were paid to save spots in line for the limited number of tickets, which were handed out by court workers and guaranteed entrance to their bearers.
The crowd rushed to get pictures of Holmes as she walked to the courthouse entrance, usually hand-in-hand with her mother.
Assistant US Attorney Jeff Schenk (center) cast Holmes as a desperate con artist who brazenly lied to get rich during his three-hour presentation last month
Holmes was able to seduce high-profile investors with the promise of Theranos. Some of the biggest investors included: the founders of Walmart, who gave $150million; Rupert Murdoch, who invested $125million; Betsy DeVos who put in $100million. In addition to the scions of the Cox telecommunications family who lost $100million, as well as the Mexican tycoon Carlos Slim, Robert Kraft and the Oppenheimer family who once owned De Beers diamonds
Powerhouse Board of Directors: Holmes' success hinged on her ability to captivate powerful men. Sitting on her Board of Directors, were two former Secretaries of State, two Secretaries of Defense, and the Former CEO of Wells Fargo. Kissinger described Holmes as 'an excellent businesswoman.' He added: 'You have to remember, she has a sort of ethereal quality. She is like a member of a monastic order'
In 2015, Vice President Joe Biden heralded Theranos as 'a laboratory of the future. You can see what innovation is all about just walking through this facility.' But former Theranos design architect, Ana Arriola, recounted the hysteria leading up to his visit. It was 'completely fake,' she said. What Biden saw that day was a smoke and mirrors operation. They cleared out a room, slapped on a fresh coat of paint and stocked it with every Edison device they could find
Holmes, left, has testified that she was in a decade-long abusive relationship with Theranos' chief operating officer, Sunny Balwani, right. They are pictured here addressing the company's staff in 2015 at the company's former headquarters in Palo Alto, California
The gathered crowd included journalists and curious members of the public, but also on at least one occasion look-alikes, complete with blond ponytails and black clothes considered the disgraced entrepreneur's trademark look.
Some of those waiting shouted support for Holmes on her way in, which prompted Judge Edward Davila to note concern it could influence jurors.
In late November the waiting masses snapped pictures for Twitter of seeming performance art by a woman selling blond wigs, black turtleneck tops and cans of 'blood energy drink' from a suitcase.
In a risky move, 37-year-old Holmes testified in her own defense, pitting her word against the testimony of more than three dozen witnesses called by the prosecution.
Holmes aimed to convince jurors that she believed in her technology, and that it was on the cusp of living up to its promise when the startup crashed.
She fought back tears as she recounted alleged abuse by then boyfriend Ramesh 'Sunny' Balwani, whom she'd brought in to help run her company.
Holmes said Balwani denigrated her and forced himself on her sexually when angry -- accusations that he has forcefully denied.
The prosecutor challenged Holmes's testimony of being bullied by Balwani, having her read message exchanges between the two in which they declared their love.
Much like the ubiquitous iPod, Holmes believed that her Edison disease-detection devices would one day be in every home. She was unflinching in her conviction, she told one interviewer: 'To be able to give people the tools to change their life is an incredible privileges, everyday I'm just so grateful for how this is unfolding, it's a gift from god'
Crowds of spectators are seen lining up outside Elizabeth Holmes's trial on December 7
At times there was a five hour wait to get inside court, with journalists and spectators lining up
'You are God's tigress and warrior. You are extraordinary. I love you,' Balwani wrote in one note to Holmes.
Holmes's trial became a battlefield for the debate about whether a woman entrepreneur was being prosecuted for the kind of 'fake it til you make it' tactics regularly seen in male-dominated Silicon Valley.
Her defenders and fans, sometimes called 'Holmies', were able to display their backing with an extensive array of merchandise featuring her image.
T-shirts, stickers, posters, coffee mugs and cell phone cases were all available for purchase online in support of Holmes, some bearing the title 'Girlboss'.
As Holmes's trial opened in September, dozens of listings were online as part of a cottage industry in honor of the fallen biotech star.
One seller, under the name WeAreElizabethHolmes on ecommerce site Etsy, had a Twitter account with images of T-shirts, coffee mugs and even a throw pillow.
The account cites its favorite entrepreneur: 'First they think you're crazy, then they fight you, then you change the world.'
Costumes and accessories were sold outside the courtroom to fans of Holmes
An Elizabeth Holmes wig is on sale outside the San Jose courthouse
Holmes spoke those words in a 2015 interview as she fought against the Wall Street Journal reporting casting doubt on Theranos's technology, and which would induce the firm's collapse.
Holmes testified that she dropped out of California's elite Stanford University and started Theranos at the age of 19, using money set aside to pay for college.
In the years after Theranos was founded in 2003, Holmes gathered some $700 million from investors. She held the majority stake in the startup, valued at $10 billion at its peak in 2015.
Her wealth on paper made her the first woman to reach such financial heights by building her own business.
Holmes testified during trial that she never sold a share of her stake in Theranos, leaving her with nothing after the company's collapse.
She was, however, paid more than a million dollars overall in salary during her years as chief, Holmes testified.
Holmes' defense attorney Kevin Downey (right) has argued that she 'was building a business and not a criminal enterprise.' Above, a sketch from court on November 29
November 2014: Holmes and Balwani were in a secret romance and building Theranos despite mounting staff problems. They frantically texted throughout the day, often sending one-word messages to each other about their strategy
According to a court filing, Holmes and Sunny Balwani would lead profane chants in company meetings against rival companies and detractors
Inside the world of Elizabeth Holmes: How the disgraced Theranos founder styled herself on Steve Jobs, spoke in a fake baritone, told people her husky was a WOLF and captivated old, powerful men who invested millions before her empire collapsed
Elizabeth Holmes, a Stanford University dropout who founded Theranos in 2003 at age 19, was, at one point, the youngest female billionaire in the United States and heralded as 'the next Steve Jobs' for revolutionizing lab testing with a proprietary blood analysis device nicknamed the 'Edison.'
The Silicon Valley 'unicorn' startup raised $900million and had more than 800 employees. Her company was more valuable that Uber, Spotify and AirBnB.
With her trademark heavy eyeliner rimmed eyes, bleached blonde hair, red lipstick and Steve Jobs-like black turtleneck, Elizabeth Holmes swanned through boardrooms, TED Talks and investor meetings as the new darling of Silicon Valley.
Early investors included powerhouses like Rupert Murdoch, Larry Ellison, Jim Walton, Robert Kraft, and Betsy DeVos. Sitting on the Board of Directors were Former Secretaries of State, Henry Kissinger and George Shultz alongside former Secretary of Defense, General Jim Mattis, the CEO of Wells Fargo, and CDC Director, William Foege.
Elizabeth Holmes worshipped Steve Jobs and mimicked every aspect of his life, including the way he dressed, his strict green juice diet, his preference for black leather Le Corbusier chairs in his office and his obsession with secrecy. 'I'm a tremendous admirer of what Steve Jobs did,' she once told journalist Ken Auletta. 'I think he was a genius but I do have to disclose that I've been in black turtlenecks since I was seven'
She graced the covers of countless magazines including Fortune, Bloomberg BusinessWeek, Forbes, The New York Times Style Magazine; and was named one of Time Magazine's '100 Most Influential People' of 2015.
What nobody knew is that her 'disruptive' technology didn't work. The Edison was touted as a magical mini lab that could process over 240 tests - from cholesterol to cancer - within one hour. Instead, blood tests were often secretly conducted on third party commercial machines made by Siemens; and unbeknownst to investors and patients, when results did come back from the Edison, they were inconsistent, flawed or flat-out false.
Then it all came crashing down in 2018. The shortcomings of Theranos' technology were exposed and its $10billion valuation was worth 'less than zero' overnight. Operations were shutdown and Holmes was charged with 11 counts of fraud.
After multiple delays due to the Covid-19 pandemic and Holmes' pregnancy, the trial finally kicked off in August 2021, revealing a series of bizarre lies and baffling stories about the persona she perpetuated.
'She is a pathological liar. She wanted to be a celebrated tech entrepreneur. She wanted to be rich and famous,' said Wall Street Journal writer, John Carreyou, who spent years investigating Elizabeth Holmes.
From her undying obsession with Steve Jobs to stories of how Theranos employees chanted 'F**k you' in company-wide meetings, to a trove of steamy texts with COO Sunny Balwani, a fake baritone voice and the inexplicable insistence that her dog is a 'wolf,' here is the weird world of Elizabeth Holmes.
Lovesick texts between Elizabeth Holmes and her 'abuser' Sunny Balwani show the couple's closeness before their relationship went sour as she's convicted of fraud
Disgraced Theranos founder, Elizabeth Holmes was found guilty of four charges of fraud for bilking investors out of $9billion and deceiving patients with sham medical reports. Her trial brings to close a wild saga that includes baffling stories about how she was obsessed with Steve Jobs, faked her voice to sound more authoritative, and carried out a secret love affair with the company's COO
Among the thousands of documents that were presented at Theranos founder Elizabeth Holmes fraud trial were the lovesick text messages she and Sunny Balwani, her alleged abuser, exchanged before their Silicon Valley empire crumbled around them.
Holmes sought to blame Balwani for her crimes, but was convicted of four charges - one count of conspiracy to commit wire fraud, and three counts of wire fraud.
She was cleared of four other charges. Jurors were unable to reach a verdict on the remaining three, which prosecutors may decide to retry at a later date.
The texts between Holmes and her ex show how - before she reported to authorities that Balwani abused her into committing fraud - she considered him her 'king', her 'tiger' and the man she would build a future with.
They go from optimistic declarations of love in 2014 - 'This is our year. We can never forget it tiger... for our kids never forget who we are' - to panicked discussions in 2015 about internal staff complaints, FDA clearances and the 'challenges' ahead.
An interview with a Theranos assistant was also included and detailed how both Balwani and Holmes ordered each other flowers for Valentine's Day in 2016.
In July 2015, the pair discussed Balwani leaving the company. Their romance had started to fizzle but he continued working at Theranos for a year.
In the texts, he complained to her: 'I worked for 6 years day and night to help you. I'm sad at where you and I are. I thought it would be better.
'I know u r angry in ur way. And upset with me for not doing everything you wanted me to do.'
He then warned her about 'challenges' ahead and said 'U need me'.
Elizabeth Holmes, left in court last month, is on trial for fraud. Prosecutors have submitted texts she exchanged with Theranos co-founder Sunny Balwani, her former secret lover, in 2014 and 2015
In December 2014, Holmes texted Balwani calling him 'tiger' and telling him it was 'their year'
In July 2015, Balwani discussed leaving the company but not until it broke even. The romance had soured by then and the pair were focused on saving the company. He warned her about 'challenges' ahead which he said she was underestimating
July 28 2015: Balwani tells Holmes they need to 'commit' to each other and 'get out of this hell so we can live in paradise we both have'
In another message from July 2015, Balwani tells Holmes to 'be strong' and that he loves her
She said she understood and was ready for them but he replied: 'Unfortunately you don't and it brakes [sic] my heart.'
'U are underestimated the challenges ahead and being childish,' he said in one of the messages.
The company was operating on a loss and Balwani didn't want to leave until they recouped some money.
'I am not leaving until we break even. We will do this together and I will be by yourself [sic] until then.
'Can't leave like this,' he went on, warning Holmes that he 'didn't like' the 'PR direction' she was heading in.
November 2013: The pair discuss winning investment of $15million which Balwani describes as 'free cash'
November 2014: The pair discuss investments from 'Greg' and Alice Walton, the daughter of Walmart founder Sam Walton who is the 12th richest person in America with a net worth of $67billion
November 2014: Holmes and Balwani were in a secret romance and building Theranos despite mounting staff problems. They frantically texted throughout the day, often sending one-word messages to each other about their strategy
In January 2015, an internal negative review was left by employee in the company's Newark lab. Balwani said he was going to 'nail down this mother f****er'. In subsequent texts, he tried to narrow down a list of employees who might have left the anonymous review
April 2015: The pair continue discussing work and the media. Balwani told Holmes they still needed FDA clearance. Holmes said those on the outside 'are just jealous' of what the pair were building
April 2015: The pair worry about a Wall Street Journal reporter who planned to visit the Theranos HQ and sample the technology. They worried about whether it was going to work. Balwani said 'seems like this guy is looking to write something negative'. The Journal published a story in October which said Holmes had declined interviews for five months. The article also raised questions about the technology being used
September 2015: Holmes tells Balwani that she is 'sitting here trying to stay focused on every detail'. Cracks in the management of the company had started to show
In October 2015, the pair discussed business over text. The romance fizzled around this time but they carried on working together as problems started to arise
October 2015: One of the last texts submitted in the court records is Balwani telling Holmes that he is worried about a comment she made regarding the technology
In other, previous exchanges, before the romance soured, Balwani complained about a negative internal review that was written anonymously by an employee.
'CC'd you on terrible negative review from someone from Newark lab probably lugs lab.
'Working on getting that removed.
'I am narrowing this down on CUA. Down to 5 people. Will nail this motherf****r' .
Holmes replied: 'I saw it. We'll get them'.
In November 2014, Balwani told Holmes he'd secured an investment of $50,000 from Alice Walton, the daughter of Walmart founder Sam Walton who is the 12th richest person in America with a net worth of $67billion
In another, they worried about a Wall Street Journal reporter visiting their lab to try out Theranos blood test technology.
They discussed the result he would get and how he wanted to write 'something negative'.
They also talked about how Balwani thought they were 'lazy' and 'disorganized'.
'We are lazy and disorganized and not focused,' in work but also 'in the context of u and me,' he said.
Holmes replied: 'What makes you say lazy.'
In later texts, the pair fretted over FDA regulations and discussed making the company less about healthcare and '100 percent tech'.
Balwani left Theranos abruptly in 2016. Both he and Holmes have denied fraud.
Part of her defense was to claim that he abused and manipulated her into any possible crime or fraud.
Now 37, Holmes was 18 when she met Balwani on a Chinese-language immersion trip in 2002. He was 37 at the time and the pair started dating.
She dropped out of Stanford in 2003 to work on Theranos full-time.
Holmes is now married to hotel heir Billy Evans and the pair have a baby son.
Balwani's trial has been scheduled for next year. The judge did not want their trials to run at the same time.
Timeline reveals Elizabeth Holmes' meteoric rise and spectacular fall from starting Theranos in 2003 to facing decades in prison 19 years later
2003 - Holmes founds Theranos, then called Real-Time Cures, after dropping out of Stanford University. Then only 19 years old, Holmes aimed to revolutionize diagnostic testing.
2004 - The nascent company raises more than $6 million in funding, reaching a valuation of $30 million.
2009 - Holmes' then-boyfriend Ramesh 'Sunny' Balwani joins Theranos as chief operating officer.
2010 - Theranos raises a further $45 million in funding, reaching a valuation of $1 billion.
2011 - Theranos begins attracting high-profile board members, including two former U.S. secretaries of state, George Shultz and Henry Kissinger.
2012 - The company moves to the former Facebook headquarters in Palo Alto, California.
2013 - Theranos begins promoting its technology, claiming to be able to run a wide range of tests on a single drop of blood using a machine called the Edison, and enters into a partnership with Walgreens Boots Alliance.
2014 - Having raised more than $400 million, Theranos is valued at more than $9 billion. Holmes is recognized by Forbes as a billionaire, thanks to her stake in the company.
February 2015 - An article in the Journal of the American Medical Association criticizes Theranos for failing to publish any of its research in peer-reviewed journals.
July 2015 - Theranos wins U.S. Food and Drug Administration approval for a test to detect the herpes simplex 1 virus.
October 2015 - The Wall Street Journal reports that Theranos uses its technology for only a small number of its tests, and that employees doubt their accuracy. The FDA subsequently releases a finding that the company used unapproved devices for tests.
January 2016 - The U.S. Centers for Medicare & Medicaid Services (CMS) releases a report that one of the company's facilities presents 'jeopardy to patient health and safety.' The agency said an inspection revealed that the facility did not meet its own quality-control standards, including not properly calibrating equipment.
June 2016 - Walgreens ends its relationship with Theranos.
October 2016 - Partner Fund Management, which invested nearly $100 million in Theranos, sues the company for securities fraud, claiming it lied about its technology to secure the investment. The case is later settled.
April 2017 - Theranos reaches a deal with CMS barring it from the blood-testing business for two years.
March 2018 - The U.S. Securities and Exchange Commission charges Theranos, Holmes and Balwani with securities fraud. Holmes is stripped of her stake in and control of the company.
June 2018 - Holmes and Balwani are indicted on criminal fraud charges. Both plead not guilty.
September 2018 - Theranos announces that it will dissolve.
March 2021 - Holmes reveals she is pregnant.
August 2021 - Holmes gives birth to her child. A court filing reveals that Holmes plans to argue she was under the control of Balwani, who she says was abusive, at the time of the charged crimes. Balwani denies the allegations in court filings.
September 2021 - Trial begins in San Jose, California.
November 2021 - Holmes takes the stand to testify in her own defense. She denies seeking to mislead investors and patients. She says Balwani was in charge of financial models provided to investors and that he was abusive in their relationship.
December 2021 - Jurors hear closing arguments from both sides.
Jan. 3, 2022 - Holmes was convicted on charges of defrauding three other investors, as well as conspiring to do so. She was acquitted on three counts of defrauding patients who paid for tests from Theranos, and a related conspiracy charge. The jury could not reach a decision on three counts related to individual investors. A sentencing date was not immediately set. She faces up to 80 years in prison when sentenced by U.S. District Judge Edward Davila but would likely get a much lower sentence.
Bold talk and black turtlenecks, how Elizabeth Holmes styled herself after Steve Jobs:
According to former employees, Elizabeth Holmes saw herself as the female version of Apple CEO, Steve Jobs. She frequently referred to Theranos' blood-testing systems as 'the iPod of healthcare' and adopted his signature style of black turtlenecks.
'In line with designing my life to be able to give every bit of energy I have to this, I have a closet that has a very large number of the exact same clothes and every single day, I put the same thing on,' she told Ken Auletta of the New Yorker in 2014. When he pointed out that Jobs said the same thing she laughed and objected: 'He wore jeans.'
'I'm a tremendous admirer of what Steve Jobs did,' she continued. 'I think he was a genius but I do have to disclose that I've been in black turtlenecks since I was seven.'
Like Jobs, Holmes was a vegan who hewed to his strict green juice diet that consisted of cucumber, parsley, kale, spinach, romaine lettuce, and celery.
She decorated her Theranos office with Le Corbusier black leather chairs, (which were a favorite of Jobs) and began to emulate his obsession with secrecy once her star power began to rise. In 2019, it was also revealed Holmes had claimed her husky Balto was actually a wolf, in an apparent bid to further enhance her powerful image.
Much like the late Apple CEO who leased a new Mercedes every six months to avoid having license plates; Holmes hired a security detail to drive her around in a black Audi sedan without plates.
To her security detail, Holmes was known as 'Eagle 1;' while her lover and Theranos COO, Sunny Balwani was known as 'Eagle 2.'
According to his book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, John Carreyrou details how Holmes borrowed from the' management techniques that were described in Walter Isaacson's biography of Steve Jobs. Theranos employees said they 'could pinpoint which chapter she was on based on which period of Jobs's career she was impersonating.'
In the HBO documentary, The Inventor: Out for Blood in Silicon Valley, Roger Parloff, a journalist who profiled Holmes for Fortune magazine described her obsession with Steve Jobs as, 'hero worship.'
During the trial, dozens of stream of consciousness-like writings were released as evidence. According to leaked documents obtained by CNBC, one 'note to self' in April 2015 contained three telling words: 'Becoming Steve Jobs.'
How Elizabeth Holmes faked her deep voice to sound more authoritative:
According to former co-workers and acquaintances, Holmes purposefully lowered her voice to an impossibly deep baritone in order to project gravitas in the male dominated tech industry. Former employee, Ana Arriola, revealed to The Dropout podcast that that occasionally Holmes 'fell out of character' while she was drinking and exposed her real, higher pitched voice
According to former co-workers and acquaintances, Holmes purposefully lowered her voice to an impossibly deep 'back-of-the-throat' baritone in order to project gravitas in the male dominated tech industry.
The faked contralto with a vague California affectation and 'a touch of robot' became one of Holmes' trademarks.
Ana Arriola, a former Theranos employee told The Dropout podcast that occasionally Holmes 'fell out of character' while she was drinking and exposed her real, higher pitched voice.
'It was maybe at one of the company parties, and maybe she had too much to drink or what not, but she fell out of character and exposed that that was not necessarily her true voice,' explained Arriola. 'Maybe she needed to be more convincing to project a persona within a room among male VCs. I'm not really quite sure.'
Writer and reporter John Carreyrou says that Holmes accidentally spoke in her normal voice at the end of a long meeting with a new employee in 2011. He told 60 Minutes: 'It was late in the day and they were finishing up the meeting and she sort of expressed her excitement that he had recently joined.'
'And as she got up, she forgot to put on the baritone and slipped back into a more natural sounding young woman's voice,' which took the new staffer by surprise.
Holmes' family members came to her defense and told TMZ that her deep voice is authentic and most people in her family have lower voices, 'including her grandmother.'
Holmes' steamy romance with Theranos COO Sunny Balwani, who was 19-years her senior:
Holmes was 18 when she met 37-year-old Ramesh 'Sunny' Balwani while on a Chinese-language immersion trip in 2002. The pair quietly started dated for 12 years before their romance fizzled in 2016.
One former employee described Sunny Balwani as 'a Mark Cuban character' who made a lot of money 'being in the right place at the right time' during the 90s dot com bubble. Without having any experience in medicine, he was hired at Theranos in 2009 to focus on e-commerce but was soon made President and Chief Operating Officer.
Balwani, like many others in Holmes' circle, was convinced she was the type of iconoclastic inventor who comes along once in a lifetime.
Holmes was 18 when she met 37-year-old Ramesh 'Sunny' Balwani while on a Chinese-language immersion trip in 2002. The pair quietly started dated for 12 years before their romance fizzled in 2016. Balwani was a Pakistan-born multi-millionaire who got rich during the dot com bubble. Despite having no experience in medicine, he was appointed President and COO of Theranos from 2009 to when he was fired in 2016. Though the couple tried to keep their romance under wraps, it became obvious to colleagues around them: 'They were always talking to each other, offline, online, in meetings, outside of meetings. They were very close'
During her trial Holmes tearfully testified that Balwani sexually and emotionally abused her. 'He would force me to have sex with him when I didn't want to because he would say that he wanted me to know he still loved me,' said Holmes in court. She alleged that her former business partner and lover controlled what she ate, how she lived, how she dressed and often undermined her confidence in running the company
The couple did not disclose their relationship to investors and despite great efforts to keep their romance under wraps, it became obvious to colleagues around them: 'They certainly would leave together, they'd come in at similar times. They were always talking to each other, offline, online, in meetings, outside of meetings. They were very close.'
Holmes' former executive assistant, Paige Williams told the FBI that she only learned the Theranos founder lived with Balwani after visiting the home the couple shared.
The couple purchased a five-bedroom, seven-bathroom house in the tony suburb of Atherton in 2013. They created a limited liability company (LLC) to purchase the $9million residence which was named 'HMFR.' According to a court document, those initials stood for a prayer in Arabic that the couple often recited; the prayer translates to 'This too is my God's glory,' explained Holmes.
Nearly 600 pages of private text messages were presented during the fraud trial which revealed their lavish lifestyle - like planning trips to Las Vegas that included reservations at three star Michelin restaurants and thousand dollar hotels.
Other texts ranged from the mundane: business meetings, staff attendance, internal complaints, flight details and updates on their pet fish, to romantic love overtures: 'This is our year,' wrote Holmes, 'We can never forget it tiger... for our kids never forget who we are.'
In another thread from May 2015, Holmes says, 'You are breeze in desert for me. My water. And ocean … Meant to be only together tiger,' She added: 'Madly in love with you and your strength.'
Balwani's texts were equally effusive: 'Infinite love for you in every breath,' he wrote in April 2016. 'Infinite love for you in every breath,' he said in another.
The romance started to sour in 2015 when problems began to arise. In later texts, the pair fretted over FDA regulations and discussed making the company less about healthcare and '100 percent tech'.
'I know u r angry in ur way [sic]. And upset with me for not doing everything you wanted me to do,' texted Balwani before warning her about 'challenges' ahead. 'U need me.'
Holmes' defense pointed to a three page document written by Balwani that outlined how Holmes should spend her day. The note includes directions like: 'I will never meet with anyone for more than five minutes unless I have written down why'
During her trial Holmes tearfully testified that Balwani sexually and emotionally abused her.
'He would force me to have sex with him when I didn't want to because he would say that he wanted me to know he still loved me,' said Holmes in court.
She told the court that the Pakistan-born multimillionaire controlled what she ate, how she lived and often undermined her confidence in running the company. She alleged that he dictated the clothes she wore, and frequently forced her to follow a strict daily prayer routine and adhere to a punishing diet consisting of green juice that kept her 'pure.'
Her defense pointed to a text from Balwani that said: 'I have molded you.' They also released evidence in the form of a handwritten note that were instructions on how to become 'the new Elizabeth.'
The three pages of scrawlings outline how Holmes should start her day, beginning with forcing herself out of bed and spending 30 minutes – 'never a minute less' – writing down the day's goals.
'I will spend 20 percent of my time (80%) on things that are important to cash flow (short-term cash flow and long-term strategy and will spend <20% on urgent and non-important stuff,' the note says.
The directives also told her how to treat her employees. 'I will always give crisp, clean goals to my subordinates, even if they don't like it – especially if they don't like it,' the note said. 'I will not assume that people will do the 'right' or noble thing.
'They are not motivated by what I am motivated by,' it continued, bizarrely adding: 'Don't feed pasta and pesto to fish.'
Elizabeth Holmes bought a dog that she claimed was a 'wolf' and defecated all over the office:
As Theranos began to collapse in 2017, Holmes jetted off on a first class flight across the US to purchase a 9-week-old Siberian husky from a breeder. She named the grey and black puppy, Balto -after the famous sled dog who made the perilous 600-mile journey across Alaska to bring medicine to a diphtheria-ravaged village in 1925.
Despite the chaos, Holmes believed that Theranos could still be saved, and that Balto would lift employee spirits and provide an unconventional plan for redemption.
According to two former Theranos executives, Holmes (pictured above in 2019 with her current husband) asked her security detail and one of her drivers to escort her to the airport in her black Cadillac Escalade. She flew first-class across the country to purchase a 9-week-old Siberian husky, whom she believed would lift the company's spirits. Instead Balto (named after a famous sled dog) terrorized staff and defecated all over the office. After discovering that her dog's breed evolved from wolves, Holmes insisted on telling people that her Balto was a wolf - a claim that she still repeats to this day
According to Vanity Fair, Balto never left Holmes' side. Everyday, one of her two drivers, along with two security personnel and two assistants would pick up Holmes and Balto from their Los Altos mega-mansion before work.
Balto terrorized staff by defecating and urinating all over the office, despite scientists warning that his hair and excrement might contaminate samples. Frenzied assistants were left cleaning up his mess.
Holmes decided that Balto was a wolf after discovering that Siberian husky genomes evolved from wolves. 'In meetings, at cafés, whenever anyone stopped to pet the dog and ask his breed, Holmes matter-of-factly replied, 'He's a wolf,' reported Vanity Fair.
She apparently repeats the unsubstantiated claim to this day.
Theranos employees chanted 'F**k you' in company-wide meetings while dancing to MC Hammer:
According to a court filing before the trial, Holmes and Balwani would leadprofane chants in company meetings against rival companies and detractors.
In cringe-worthy leaked footage featured in the 2019 HBO doc, Out For Blood, Holmes is seen dancing to MC Hammer's 'Can't Touch This' in a staff-wide celebration over FDA approval of a rarely used Herpes test. The small victory made them feel 'untouchable.'
At one point during the celebration, Balwani took over the mic to get his employees to shout a collective 'F***k You!' as a message to their rival company Quest Diagnostics, who he said were 'attacking the work which you are doing.' Holmes' continued the revelries by jumping in a children's bouncy house.
Another claim states that Theranos targeted WSJ reporter John Carreyrou for writing a series of articles criticizing Holmes.
A company-wide e-mail instructed all lab coat technicians, programmers, and administrative staff to meet in the cafeteria. Holmes addressed her employees in an impassioned speech about how they were 'changing the world,' before Balwani led a rollicking chant that yelled 'F***k you, Carreyrou!' until the entire staff fervently cried out, 'F***k you, Carreyrou!'
Not only that, employees programed a 'Space Invaders-style' video game in which players would shoot at little pictures of Carreyrou's head.
Elizabeth Holmes cast a spell on powerful older men:
The key to Holmes' success and ability to raise hundreds of millions of dollars in venture capital was that she surrounded herself with well-respected men who bolstered her credibility.
'She aligned herself with very powerful older men who seemed to succumb to a certain charm,' said Phyllis Gardner, Holmes' former professor at Stanford to HBO. 'And those powerful men could influence people in the government, influence the Department of Defense.'
Her earliest seed money came through family connections, her father was an executive at Enron while her mother worked as a congressional staffer. Through her father's college buddies, Holmes was introduced to Oracle super-investor Don Lucas, who then brought Oracle founder Larry Ellison on board.
Another early backer was Tim Draper, a venture capitalist who saw promise in companies like Tesla, Skype, Baidu, Hotmail. Holmes was a childhood neighbor and friends with Draper's daughter.
Honoree Elizabeth Holmes poses for a photo at the backstage inspiration wall at the 2015 Glamour Women of the Year Awards at Carnegie Hall
According to unsealed documents from several lawsuits brought against Theranos, other investors included: the founders of Walmart, who gave $150million; Rupert Murdoch, who invested $125million; Betsy DeVos who put in $100million. In addition to the scions of the Cox telecommunications family who lost a cool $100million, there was also the Mexican tycoon Carlos Slim, Robert Kraft and the Oppenheimer family who once owned De Beers diamonds.
Holmes insulated herself with the most authoritative Board of Directors on the planet. It included former Secretary of State Henry Kissinger and well as Former Secretary of State, Labor and Treasury, George Shultz. It also included two former Secretaries of Defense: Bill Perry and James 'Mad-Dog' Mattis in addition to former senators, Sam Nunn and Bill Frist and retired Navy Admiral Gary Roughead - to name a few.
New Yorker journalist Ken Auletta said: 'They were talking about her as if she was Beethoven, as if she was this rare creature that maybe only one in a century or two in a century come along who really can change the world.'
When he asked Kissinger to describe Holmes, the Secretary of State called her 'an excellent businesswoman.' He added: 'You have to remember, she has a sort of ethereal quality. She is like a member of a monastic order.' His only complaint were the four-hour-long board meetings which he called 'a human rights violation.'
General James Mattis also gushed about Holmes before he left his post at Theranos to be appointed Trump's Secretary of Defense. He told Auletta that she had 'integrity' with technical and scientific competence, and that she was 'focused on human rights in the most classical sense.'
In 2015, President Bill Clinton invited Holmes to speak at a panel for the Clinton Global Initiative annual meeting alongsideAlibaba's Executive Chairman Jack Ma
Prosecutors alleged that one of the many ways Holmes scammed investors was by misleading them to believe Theranos had military contracts. She claimed that Edison devices were being used on the battlefield in Afghanistan and in medical evacuation helicopters. Among her many deceptions was also a phony endorsement by Jim Mattis that was featured prominently in promotional material on the website.
In the recent trial, the disillusion four-star general said, 'There just came a point when I didn't know what to believe about Theranos anymore.'
After his visit to Theranos facility in 2015, then Vice President Joe Biden 'a laboratory of the future.' He continued, 'You can see what innovation is all about just walking through this facility.'
But there was a problem with the vice president's visit. 'That was completely fake,' explained former Theranos chief design architect Ana Arriola to ABC News. What Biden saw that day was completely rigged. They cleared out a room, slapped on a fresh coat of paint and stocked it with every Edison device they could find.
According to former employees, Elizabeth Holmes does not blink her eyes:
The 2019 HBO expose left the internet baffled by suggestions that Elizabeth Holmes doesn't blink her eyes. Two former employees remarked on how Holmes never broke eye contact. 'I know this seems odd but my first impression of her is that she didn't blink,' said the receptionist, Cheryl Gafner. WSJ reporter John Carreyrou echoed the same observation in his book: 'The way she trained her big blue eyes on you without blinking made you feel like the center of the world. It was almost hypnotic'
In addition to her uncanny voice, the 2019 HBO expose also left the internet baffled by suggestions that Elizabeth Holmes doesn't blink her eyes.
Cheryl Gafner, a former receptionist told the documentary about her first job interview with Holmes, 'I know this seems odd but my first impression of her is that she didn't blink,' she said. 'She was very intense.'
John Carreyrou echoed that same observation in his book: 'The way she trained her big blue eyes on you without blinking made you feel like the center of the world. It was almost hypnotic.'
Dave Philippides, an engineer who also interviewed for a job recalled how the process was different that other tech companies in the Bay Area. 'They didn't tell me near as much about what they were doing and she never blinked during the interview.'
Much like how she has retrained her voice to be lower, some experts have speculated that creating intense eye contact is a conscious form of mind control that she has practiced.
Bulletproof glass windows, a hired security detail and a pathological obsession with secrecy:
Like her idol Steve Jobs, erstwhile employees recalled how Holmes was irrationally paranoid that confidential, proprietary information would leave Theranos headquarters. So much so, that when her topnotch scientist, Ian Gibbons committed suicide in 2013; Holmes callously called his wife demanding that she immediately return all confidential Theranos property instead of offering her condolences.
As President and COO, Sunny Balwani was put in charge of the company's most secret medical technology, acting as Holmes' fearsome enforcer in the workplace.
Together, they created a culture of unrealistic paranoia. Holmes had bulletproof glass installed in her office and hired a team of personal bodyguards that carried guns.
Employees realized that their email was being read when they didn't copy-in Balwani, but still received responses from him. Receptionist Cheryl Gafner discovered that she was being keystroked, which means anything that she typed was being watched internally.
Departments were siloed as Holmes forbade all Theranos employees from communicating with one another about projects they were working on - which created a strange sense of executive omniscience, with Holmes and Balwani acting as Oz.
They demanded complete loyalty. If employees expressed doubt in the efficacy of the science, or feasibility of the Edison machines, they were derided by senior management that 'maybe you're not a Silicon Valley person.'
In one text exchange made public during the trial, Balwani complained about a negative internal review that was written anonymously by an employee. 'CC'd you on terrible negative review from someone from Newark lab probably lugs lab. Working on getting that removed.' He added, 'I am narrowing this down on CUA. Down to 5 people. Will nail this motherf****r.'
Holmes replied: 'I saw it. We'll get them.'
'It was very clear they were trying to hide something,' said Micah Nies, a customer service manager to CNBC. 'Every morning I woke up and wondered what they were going to spin today, while I was trying to find my exit strategy.'
Employees worked under a cloud of manipulation and intimidation. 'The threat of litigation was always in the air when you worked at Theranos,' Carreyrou told The Dropout. If anyone expressed misgivings internally, or worse - spoke to a regulator or reporter, Holmes and Balwani would send their attack-dog lawyer, David Boies to coerce them back in line or threaten legal action.
Tyler Shultz, a former lab worker turned whistleblower learned the hard way. His family mortgaged their house to cover $400,000 in legal defense fees after Boies dragged him through endless litigation. The fact that Tyler's grandfather, George Shultz , was on the Theranos' Board of Directors and an early champion of Elizabeth Holmes' meant nothing.
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