Theranos founder Elizabeth Holmes found guilty of 4 of 11 counts, faces likely prison term

A federal jury in San Jose, California, found Theranos founder Elizabeth Holmes guilty of four fraud counts Monday evening, not guilty on four other counts, and deadlocked on the final three counts in the landmark case against a fallen Silicon Valley sensation. Holmes, 37, faces a maximum of 20 years in prison for each guilty count, though legal experts expect her actual sentence to be much shorter.

Federal prosecutors had portrayed Holmes as a success-driven charlatan who misled investors and patients about the tabletop blood-testing startup she founded in 2003 at age 19 after dropping out of Stanford. Theranos and Holmes drew in high-profile investors and raised more than $900 million before a series of Wall Street Journal articles in 2015 sent the company on a decline, eventually collapsing in 2018 amid regulatory scrutiny and fraud charges. Holmes, worth $4.5 billion on paper at one point, left the company soon before it shuttered.

Holmes "chose fraud over business failure. She chose to be dishonest with investors and patients," prosecutor Jeff Schenk said in his closing arguments. "That choice was not only callous, it was criminal."

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While prosecutors called more than 30 witness in the three-month trial, the defense relied on Holmes and two other witnesses. Holmes testified over seven days that she never purposefully misled investors or customers, believed rosy assessments from employees, and was manipulated by her former business partner and live-in boyfriend Ramesh "Sunny" Balwani, who she also accused of sexual and emotional abuse. Balwani, who denies the abuse allegations, faces a separate trail next month.

"The trial opened a window into the secretive world of Silicon Valley start-ups, granting a rare peek into a place where CEOs rarely stand for trial and companies often skirt regulatory consequences," The Washington Post reports. It was also "the most high-profile test of whether Silicon Valley's 'fake it until you make it' ethos could withstand legal scrutiny."

The split verdicts are "a mixed bag for the prosecution, but it's a loss for Elizabeth Holmes because she is going away to prison for at least a few years," David Ring, a lawyer who followed the case closely, told The Associated Press. Former federal prosecutor Robert Dugale called it "a significant win for the government."

The jury, which deliberated for seven days, was not told that Holmes has a newborn child. Her sentence will be decided by U.S. District Judge Edward Davila.