Mistrial declared for three counts in trial of Holmes
A mistrial was formally declared for three counts of wire fraud against Elizabeth Holmes, founder of failed blood-testing startup Theranos, according to a federal court filing released Tuesday.
Holmes, 37, was found guilty Monday of three counts of wire fraud and one count of conspiracy to commit wire fraud for lying to investors to raise money for her company. She was found not guilty on four counts related to defrauding Theranos’ patients.
The three hung counts were related to investments from three Theranos investors who testified Holmes misled them. Jurors had said Monday they could not agree on verdicts on those counts.
A hearing will be held next week to discuss those charges, which prosecutors could choose to retry.
Holmes — a Stanford University dropout and onetime startup darling turned Silicon Valley pariah — is also expected to receive a sentencing date at next week’s hearing for the counts she was convicted on. Each wire fraud count carries a maximum sentence of 20 years in prison. Holmes can appeal her conviction, the sentencing or both.
The hung counts came after a jury of eight men and four women spent 50 hours over seven days deliberating a verdict. On Monday, they twice told Judge Edward J. Davila of the U.S. District Court for the Northern District of California, who presided over the case, that they were deadlocked on the three counts against Holmes. Verdicts were delivered on the other eight counts instead.
The three hung counts related to investors Alan Eisenman, Chris Lucas of Black Diamond Ventures and Bryan Tolbert of the Hall Group. Each had invested in Theranos, with some of their transactions forming the basis of three counts of wire fraud.
Eisenman testified he believed Holmes was hiding information from him. Lucas testified Holmes was his main source of information about Theranos. Tolbert said in court that he backed Theranos on the understanding its technology was ready to be deployed.
Investors’ due diligence — and lack thereof — was a major theme during the case, which was viewed as a verdict on Silicon Valley’s culture of hype and hustle.
In total, Theranos raised $945 million from investors over its lifetime. Those investments were wiped out after the company’s blood tests — which were supposed to be able to discern various ailments from a few drops of a patient’s blood — were shown not to work.