Status: 04.01.2022 4:17 a.m.
Former Silicon Valley icon Elizabeth Holmes has been found guilty of fraud. The founder of Theranos had deceived investors about the effectiveness of new blood tests and thus swindled more than $ 900 million.
The twelve jurors saw it as proven that Elizabeth Holmes had persuaded investors to pour millions into the blood test company Theranos, which she founded, even though the technology never worked as the 37-year-old had promised.
Holmes was found guilty on four out of eleven counts. This concerns both the allegation of fraud and the deliberate false assertion on several points. The jury either acquitted her on the remaining seven points – or they could not come to an agreement during their seven-day deliberations.
“That will shake Silicon Valley awake”
She was acquitted, among other things, on charges relating to patient fraud. Renowned attorney Michael Cardozo followed the trial at the district court in San José a few kilometers south of San Francisco. He says: The verdict is a wake-up call for the founders in Silicon Valley.
It sends a clear and powerful message to the start-ups: ‘Don’t go out there and make promises that you can’t keep or that you know won’t be true.’ That will wake up Silicon Valley as companies now know that the courts will not tolerate this kind of boasting, promises and lies. ”
Above all, the court case has provided a rare glimpse of what makes Silicon Valley tick. Where tech companies like Google, Apple or Facebook are based and thousands of new start-ups are founded every year.
Culture of limitless optimism
The trial before the district court in San Jose, the self-proclaimed capital of Silicon Valley, revealed the boundless optimism that reigns in this tributary valley of California, even if this may not always agree with the truth. The motto of many young companies is: “Fake it till you make it”. Fake it until you’ve made it.
Elizabeth Holmes also claimed this motto, as the jury’s decision shows. Now the former model entrepreneur from Silicon Valley is facing up to 20 years imprisonment for each charge, so that would be a total of 80 years. However, this amount is very unlikely, especially since the sentence will probably have to be served at the same time. Holmes also has no previous convictions and only became a mother in the summer.
Are Holmes at risk of more than ten years in prison?
Legal experts in the US believe that Holmes will be sentenced to several years in federal prison. Some lawyers even consider ten years and more to be possible. This is what the former prosecutor Elie Honig said, for example, who spoke on the TV channel CNN.
In US federal law, there is a requirement that the penalty is largely based on the amount of damage. We’re talking about $ 140 million here. This results in a recommended range of sentences of ten years, possibly even 15 or 16 years. According to the guidelines, she faces at least ten years imprisonment in a federal prison. ”
In the process, which began in September, Holmes had admitted errors. At the same time, however, she emphasized that she had always believed that her company could revolutionize healthcare.
There was no blood test revolution
On the witness stand, she portrayed herself as a visionary in male-dominated Silicon Valley and claimed that her ex-lover and business partner Ramesh Balwani had sexually and emotionally abused her. Holmes had managed to raise around 900 million US dollars since Theranos was founded in 2003 from experienced investors such as newspaper publisher Rupert Murdoch, Oracle founder Larry Ellison and the Walton family, which owns the supermarket chain Walmart.
The 37-year-old former Stanford student had claimed in court that patients could be screened for hundreds of diseases with just a few drops of blood. In 2015, after research by the “Wall Street Journal”, it turned out that the blood test device had serious defects. Two years later, the company filed for bankruptcy. It is expected that Holmes attorneys will appeal the verdict.
Theranos Judgment: The Deep Fall of a Silicon Valley Icon
Marcus Schuler, ARD Los Angeles, 4.1.2022 · 05:28 a.m.