In a generation of high-flying, money-losing start-ups, Ms. Holmes was the most prominent tech executive to face fraud allegations. A jury of eight men and four women deliberated for 50 hours over seven days before convicting her on three counts of wire fraud and one count of conspiracy to commit wire fraud. On four other counts, she was found not guilty. The jury was unable to reach a verdict on three counts, prompting Judge Edward J. Davila of California's Northern District to declare a mistrial on those counts.
Each count carries a maximum sentence of 20 years in prison, which will almost certainly be served concurrently. Ms. Holmes, 37, is likely to file an appeal.
Ms. Holmes sat motionless, staring straight ahead as the verdict was read. She then gathered her belongings and spoke quietly to her lawyer. She hugged each of her family and friends in the court gallery behind her before exiting through a side door.
"This has been a long case," Judge Davila said to the jury. "As a group, we've been through a lot."
The verdict is notable for its rarity. Only a small number of technology executives are charged with fraud, and even fewer are convicted. If she is sentenced to prison, Ms. Holmes will be the most prominent female executive to be imprisoned since Martha Stewart was imprisoned in 2004 for lying to investigators about a stock sale. And Theranos, which went bankrupt in 2018, is likely to serve as a cautionary tale for other Silicon Valley start-ups that stretch the truth in order to secure funding and business deals.
The mixed verdict indicated that jurors believed prosecutors' evidence that Ms. Holmes lied to investors about Theranos' technology in the pursuit of money and fame. They were not persuaded by her defense of blaming others for Theranos's problems and accusing her co-conspirator, Ramesh Balwani, the company's chief operating officer and her former boyfriend, of sexually abusing her.
They were also unconvinced by the prosecutor's argument that she had defrauded patients. Ms. Holmes was found not guilty on four counts relating to patients who used Theranos' blood tests and one relating to advertisements that the patients saw.
On Monday, jurors informed the court that they were unable to reach a decision on three of the charges. Judge Davila encouraged them to continue deliberating, but they were unable to reach an agreement.
The verdict came during a frenzy in the tech industry, with investors scrambling to get into hot deals and frequently ignoring potential red flags about the companies they were investing in. Some have predicted that more Theranos-style disasters are on the way.
Tales of start-up chicanery, from WeWork's botched initial public offering to Uber's aggressive boundary-pushing tactics, have not slowed the flow of capital toward charismatic founders spinning tales of business success in recent years. These flaws drew public attention but did not result in criminal charges.
Nonetheless, President Biden's Justice Department has refocused on white-collar crime. "We will encourage prosecutors to be bold," said Lisa O. Monaco, the deputy attorney general, in a recent speech. "They should not be discouraged by the prospect of losing."
According to Jessica Roth, a law professor at Cardozo School of Law and former federal prosecutor in the Southern District of New York, Ms. Holmes' conviction sends a message to other founders and executives to be cautious about their statements to investors and the public.
It "brings to light the importance of distinguishing between truth and optimistic projections — and keeping that distinction clear in one's mind," she said.
Ms. Holmes rose to prominence by imitating Silicon Valley icons like Steve Jobs' disruptive change-the-world chutzpah — a strategy that has helped companies like Apple, Tesla, Google, and Facebook become some of the most valuable in the world.
In the process, she drew the attention of heads of state, top business leaders, and wealthy families with her idealistic plans to revolutionize the health-care industry. She flew around the world on private jets, received awards and glowing magazine cover stories, and was hailed as the world's youngest self-made female billionaire.
But she crossed the line into deception when she lied about the accuracy, types, and number of tests Theranos' machines could perform in order to raise funds and secure business deals.
"That's a crime on Main Street and it's a crime in Silicon Valley," said Robert Leach, an assistant US attorney, in opening statements at the start of the trial.
The verdict brings to an end nearly four months of proceedings that alternated between exhilarating and tedious. Delays occurred as a result of a coronavirus scare, a burst water pipeline, technology issues in the courtroom, and juror travel. One juror was expelled for playing Sudoku, while another was expelled for her Buddhist faith. Crowds of spectators waited for hours for a seat in the courtroom's limited seating, many of whom had been following the Theranos saga through podcasts, documentaries, books, and news articles.
Inside, jurors heard from dozens of witnesses and saw hundreds of pieces of evidence used to support the prosecution's case that Ms. Holmes knowingly misled investors and patients about her rise to fame and fortune.
Witnesses included former Defense Secretary James Mattis, who served on Theranos' board, and Lisa Peterson, who managed money for the wealthy family of former Education Secretary Betsy DeVos and invested $100 million in Theranos. Prominent investors such as Rupert Murdoch and Larry Ellison, as well as two former secretaries of state, George Shultz and Henry Kissinger, who sat on its board, were mentioned but never called to testify.
The evidence in the case outlined Ms. Holmes' role in staged demonstrations, falsified validation reports, false contract claims, and overstated financials at Theranos. Jurors were shown recordings and videos of Ms. Holmes making exaggerated or misleading claims about Theranos.
Before shutting down in 2018, Theranos canceled two years' worth of blood tests. It paid to settle several investor lawsuits as well as Securities and Exchange Commission fraud charges.
Prosecutors, however, contended that Ms. Holmes' actions went beyond those sanctions and were criminal in nature. According to them, she caused investors to lose hundreds of millions of dollars and patients to receive unreliable test results.
"At so many forks in the road, she chose the dishonest path," said John Bostic, an assistant United States Attorney, in closing arguments.
Ms. Holmes' lawyers attempted to discredit whistleblower testimony, chastised investors for not conducting more research into Theranos, and claimed that Ms. Holmes' failures were not criminal.
Ms. Holmes concluded the proceedings by taking the witness stand. Throughout her seven-day testimony, she alternated between accepting responsibility for certain blunders and blaming others.
She stated that she believed Theranos' tests were valid and that she had relied on the expertise of more qualified people running the company's lab. And she used her charisma to persuade jurors of the same future vision that had helped her win over investors, world leaders, and the press years before.
"I wanted to talk about what this company could do in a year, five years, and ten years," Ms. Holmes said. "I wanted to discuss what was possible."
Ms. Holmes' argument that her optimistic projections were no different from those of other Silicon Valley companies contradicted the government's evidence, which Ms. Roth said was consistent with traditional fraud cases.
"If other founders and executives are engaging in the kinds of deception that was alleged and proven by substantial evidence in this case," she said, "then they should be concerned."
Ms. Holmes, most notably, accused Mr. Balwani of emotional and sexual abuse. For more than a decade, the couple dated in secret, even co-owning an estate in Atherton, California. Mr. Balwani, who is about 20 years her senior, allegedly controlled every aspect of her life, including her schedule, self-presentation, and time spent with her family, according to Ms. Holmes. She also claimed that he forced her to have sex with him. Mr. Balwani has vehemently denied the allegations.
That tearful testimony threatened to turn the tide against the prosecutor's case by appealing to the jury's emotions and portraying Ms. Holmes as a victim. Experts say it was a risky strategy, especially since Ms. Holmes did not provide an expert witness to put her accusations in context with the wire fraud charges.
This year, Mr. Balwani, also known as Sunny, will face trial. He has also entered a not-guilty plea.