Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Theranos founder Elizabeth Holmes has been convicted of fraud


Elizabeth Holmes has been convicted of fraud. At the age of 19, she founded one of Silicon Valley's most successful startups, Theranos. It promised to revolutionize testing by detecting hundreds of diseases with blood from a simple finger prick. Her investors and board members included big names, including former Secretary of State Henry Kissinger, former Secretary of Defense James Mattis. Holmes raised billions of dollars for her endeavor. Now she faces a potential prison sentence of 20 years. NPR's Bobby Allyn has covered the four-month trial in San Jose from the beginning, and he joins us this morning. Hey, Bobby.

BOBBY ALLYN, BYLINE: Hello. Good morning.

MARTIN: So walk us through what exactly the jury found here.

ALLYN: It was complicated. So the jury returned a mixed verdict. They found Elizabeth Holmes guilty of four counts related to defrauding investors of millions of dollars through her startup Theranos, as you mentioned. But the jury also acquitted Holmes of four separate charges connected to the allegation that she intentionally deceived patients who walked into Walgreens and California and Arizona and got blood tests and got bad results. To further complicate things, the jury could not unanimously agree on three other fraud charges, but those are likely to be cast aside.

MARTIN: So mixed result. I mean, you've been covering this trial since the very beginning for months. Were there indications all along that this is what the fallout would be?

ALLYN: I don't think so. I think it was pretty surprising to everyone who watched this verdict come down. There was some speculation swirling that the jury would not be able to agree on any of the charges because they were deliberating for so long. I mean, we're talking more than 50 hours over seven days. I think the fact that the jury unanimously agreed that she, you know, knowingly and intentionally scammed investors by making exaggerated claims was a pretty big deal. I mean, they had to decide that beyond a reasonable doubt. And they obviously had some real debate over a long time to finally reach that conclusion, right? So yeah, I think it was pretty stunning that she was convicted of anything at all.

MARTIN: Remind us how she got to this place. I mean, how was Elizabeth Holmes able to raise billions of dollars and dupe so many people?

ALLYN: That is the big question, isn't it? I mean, she is famously charismatic. Some people say she's enigmatic. I mean, she would walk by me and other reporters in the courthouse every day. And she does have an aura about her. And she - you know, she took the witness stand over seven days. And she was confident, and she was headstrong, and she at times became emotional. Of course, when she was building up Theranos, she wore black turtlenecks like her idol Steve Jobs, which some were sort of dazzled by.

You know, she spoke, like I said, very confidently, surrounded herself with, you know, very prominent people. Her board included, you know, a former director of the CDC. Jim Mattis was backing her. So just super credible, high-caliber people were surrounding her. And when anyone asked any probing questions about Theranos, she would say, you know what? That's a trade secret. I can't go there. And that worked until it didn't. I mean, finally, The Wall Street Journal and the federal government dug in, and the company collapsed. But for a long time, her house of cards was able to bring in millions and millions of dollars.

MARTIN: So exaggeration, self-promotion - that's stuff that happens a lot in Silicon Valley. Is this result in this trial likely to change any of it?

ALLYN: Yeah. You know, in some ways, Theranos is an example of Silicon Valley - the fake-it-till-you-make-it culture you hear so much about run amok. But in another way, it's just Theranos is a very sort of singular kind of case.


ALLYN: And what I mean by that is, you know, Holmes had mentors who were encouraging her to sort of push the envelope and keep going towards endless growth. But this was a startup in the health care space, and her exaggerations were just very egregious. So I would caution against drawing too broad conclusions, you know, based on this one verdict.

MARTIN: NPR's Bobby Allyn. Thank you, Bobby.

ALLYN: Thank you so much. Transcript provided by NPR, Copyright NPR.

Rachel Martin is a host of Morning Edition, as well as NPR's morning news podcast Up First.
Bobby Allyn is a business reporter at NPR based in San Francisco. He covers technology and how Silicon Valley's largest companies are transforming how we live and reshaping society.