Home World Elizabeth Holmes, founder of Theranos company, was convicted of fraud

Elizabeth Holmes, founder of Theranos company, was convicted of fraud

The founder of the biotech company Theranos, Elizabeth Holmes, was convicted of four counts of fraud by a court in California, United States, which he took for granted that he deceived investors into placing money in his “startup”, which promised to revolutionize blood tests with faster and cheaper tools than those used by traditional laboratories.

Holmes managed to deceive figures such as Robert Murdoch, president of the News Corp media chain, and Henry Kissinger, the obscure former US Secretary of State with his business promise. The conviction reveals the Silicon Valley business model, based on the culture of “entrepreneurs”, “startups” and investments tied to financial expectations.

As part of his deception strategy, Holmes placed the logos of pharmaceutical giants such as Pfizer and Schering-Plow on Theranos reports that praised his company’s technology for analyzing blood tests, which were then sent to investors. The simulation of the supposed new technology, which she began promoting at age 19, made her a multimillionaire.

This was done without the authorization of those companies, which was a key piece in the arguments of the Prosecutor’s Office that maintained that she deliberately tried to increase the credibility of Theranos to gain financial support.

The conviction against Holmes

The 12-person jury of the San José federal court, which listened to arguments from the defense and the Prosecutor’s Office for weeks, exempted the executive from four other charges and was unable to reach an agreement in relation to three of the charges she faced. So Holmes will keep bail, after the millionaire profits he obtained from the deception.

“The guilty verdicts reflect Holmes’ responsibility in this large-scale investor fraud and he must now face sentence for his crimes,” prosecutor Stephanie Hinds said in a statement read outside the courthouse by a representative, despite that the businesswoman will remain free.

Next week there will be another hearing to set the conditions of your bond. The date of the hearing in which his sentence will be set was not defined. If the sentence is confirmed, the 37-year-old could spend several decades in jail.

The verdict previewed was a show at the doorstep of the San José courts among dozens of cameras and photojournalists, and even people who came out to support the former Silicon Valley promise that Theranos founded at age 19.

The young star of Silicon Valley

In its early days, Holmes claimed the company would revolutionize the industry for diagnostic tests with machines that could deliver rapid results with just a few drops of blood, a project that attracted very important investors and made her a multimillionaire at age 30.

Holmes came to be considered the next figure in the world of technology and raised millions of dollars from investors who gambled on his company. However, his empire collapsed when the daily The Wall Street Journal published a report that held that its machines did not fulfill the promised functionality and that the executive could have misled investors and patients.

Theranos attracted top figures such as media mogul Rupert Murdoch, who eventually invested $ 100 million in the firm, former Secretary of State Henry Kissinger and former Secretary of Defense James Mattis.

Meanwhile, at trial Holmes argued that she believed in Theranos and worked hard on the project but failed. Holmes also blamed her former partner and ex-boyfriend Ramesh “Sunny” Balwani, a businessman nearly twenty years her senior who was her right-hand man in Theranos. The American assured the jury that Balwani abused her and forced her to have sexual relations, accusations that he refuted. Balwani will face another trial for his role in Theranos, whose charges he rejects.

The case has caused repercussions in the United States, for placing a figure from the world of technology on the bench and for targeting the ambitious culture of “entrepreneurs.”

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