Guilty of defrauding investors, but not patients
Elizabeth Holmes’ three-month trial ended on Tuesday with a guilty verdict. The founder and CEO of Theranos, who promised America and the world a universal blood analyzer, was found guilty of fraud and conspiracy to commit it.
However, the jury found it proven to deceive only investors, not patients. As a result, Holmes was guilty on four counts, acquitted on four more, and on the remaining three counts the jury was unable to reach a unanimous verdict. But what has been proven is enough for 20 years in prison and a million dollars in damages. Observers agree that Holmes will not receive such a long term.
The story of the rise and fall of Elizabeth Holmes is a bright meteor in the sky of American business. She began her entrepreneurial career at age 19, dropping out of her sophomore year at Stanford University and using her grant to start her own company. Holmes convinced her scientific advisor Channing Robertson of the promise of her idea – the development of a compact micro-quantitative blood analyzer miniLab, which can diagnose hundreds of diseases with just one drop. The chemical engineering professor, named in 2000 on the “One Hundred Men Who Changed the World” list, left Stanford to join Theranos’ board of directors. It consisted of people with even more famous names: Henry Kissinger, George Schultz (secretaries of state in the Nixon and Reagan offices), William Perry, Jim Mattis (defense ministers of Clinton and Trump), Senator Sam Nunn. Her laboratory in California was visited by Vice President Joe Biden, who was delighted with what he saw and heard. President Obama named her as one of his “ambassadors for global entrepreneurship” – a group of presidential advisers to ensure America’s technological primacy in the 21st century.
Already in 2014, when Holmes was 31 years old, Forbes magazine named her the richest woman billionaire in the United States to achieve success with her work. She really was obsessed with her project and infected those around her with this obsession. George Schultz’s grandson Tyler, who became one of Holmes’s whistleblowers, says of her exceptional charisma: “When she talks to you, she knows how to make you think at this moment that you are the most important person in the world for her.”
Today General Mattis confesses: the devil has beguiled. “All of us are ever fooled by something,” he said in an interview with Judy Woodruff on PBS and reiterated in his testimony to the court. “We all make mistakes. No doubt it was a mistake on my part. But I tend to trust people. .. “. He invested $ 85,000 of personal funds in Theranos. But at the same time, the journalists remind, he received 150 thousand dollars a year as a salary. And he intensively promoted the Holmes apparatus at the Pentagon.
Holmes was a PR master. In fact, representative functions have become central to her activities. She did not leave TV screens and the covers of glossy magazines. Meanwhile, her business began to fall apart.
The Wall Street Journal first reported that Theranos development had reached a dead end and that the laboratory was falsifying research results using analyzers from other manufacturers. Elizabeth Holmes initially underestimated the threat. Her first reaction was captured by Jim Kramer on his Mad Money show. He himself interviewed Holmes more than once and recommended that viewers buy Theranos stock. Now he called her to answer: “Elizabeth, what’s going on?” “Yes, the same as always,” Holmes replied calmly, “when you work to change the order of things. First you are declared insane, then you are attacked, and then one day you change the world.”
In fact, she knew about the forthcoming publication and tried to prevent it by contacting the owner of the WSJ, Rupert Murdoch. But Murdoch had invested in Theranos himself and wanted to know the truth.
A series of carefully crafted articles by WSJ journalist John Carreiro, based on which he wrote the book “Bad Blood,” was devastating for the company and gave the US Department of Justice grounds to indict Elizabeth Holmes. However, unlike federal prosecutors, Carreiro doesn’t believe Holmes was up to the scam in the first place. This is not Bernie Madoff, he says, she was really passionate about her idea. “Over time, she faced setbacks in her project and instead of admitting the failure and bringing it to the attention of her investors, she began to lie, and in the end the lie became so huge in comparison with reality that it turned into a massive scam.” Prosecutors sought to prove otherwise and failed. Holmes, herself testifying in her own defense, was unable to obtain a full acquittal, but her gift of persuasion led the jury to find her not guilty of deceiving patients.
Publicists write today that this is the verdict of the entire Silicon Valley with its motto fake it ’til you make it.
As before the trial, Elizabeth Holmes remains at large until the verdict. Judge Edward Davila made it clear that he would not rush: first, he would wait until the end of the trial of Holmes’ partner and ex-boyfriend Sunny Balvani, whom she calls her evil genius – it was he, according to her, who manipulated her using her feelings. The Balvani trial is scheduled for February.
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