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posted by martyb on Wednesday January 05 2022, @04:23AM   Printer-friendly
from the the-harder-they-fall dept.

Elizabeth Holmes Found Guilty on 4 of 11 Charges

Elizabeth Holmes found guilty on 4 of 11 charges:

Elizabeth Holmes was convicted today of three counts of criminal wire fraud and one count of criminal conspiracy to commit wire fraud. The jury delivered its verdict after six days of deliberation.

The government's victory in the case is a rare rebuke for tech startups, which often pitch investors on their technological prowess and business acumen using wildly optimistic assumptions.

Theranos was, perhaps, an extreme example, raising over $900 million on the back of claims that its proprietary tests were better, cheaper, and less invasive than the competition. None of those claims was true, and unlike many other Silicon Valley startups, the health and safety of patients was on the line.

Holmes was found guilty of defrauding Lakeshore Capital Management (the family office of the DeVoses) of $100 million, PFM Healthcare (a hedge fund) of $38 million, and an LLC connected to Daniel Mosley (Henry Kissinger's former estate attorney) of $6 million. She was also convicted of conspiracy to commit wire fraud against Theranos investors more generally. On three charges, all alleging wire fraud against investors, the jury returned no verdict. Holmes was acquitted of all other charges, including those that involved defrauding patients. She faces up to 20 years in prison.

With the guilty verdict, Holmes, the founder of the company, is the first Theranos executive to be held criminally responsible for her actions, though she may not be the last.

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  • (Score: 2) by Thexalon on Wednesday January 05 2022, @02:00PM (1 child)

    by Thexalon (636) on Wednesday January 05 2022, @02:00PM (#1210110)

    She liked to pretend she was a female Steve Jobs, and that included having a reality distortion field where so long as she said it with enough confidence, it must be true.

    And I'm really really surprised investors bought into this. Like, if someone made an investment pitch to me of some fancy new tech, I'd invariably say "I'll let you know soon", contact some people with a background in the field in question at some universities or something and say "OK, does this seem like something that could ever actually exist and function?" and if their rating is "it's nonsense" I wouldn't give the scammer/idiot a dime. But apparently some big-name VCs managing a lot more money than I ever expect to see in my lifetime apparently don't bother with this very simple precaution, just like a lot of investors on crowdfunding websites also apparently don't bother with that.

    I don't know who the investors were that got defrauded, but my goodness, some people should be fired for that.

    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
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  • (Score: 2) by Nuke on Thursday January 06 2022, @02:39PM

    by Nuke (3162) on Thursday January 06 2022, @02:39PM (#1210516)

    don't know who the investors were that got defrauded

    Among others : Rupert Murdoch, Henry Kissinger, Larry Ellison, Betsy DeVos, the Walmart owners, and New England Patriots owner Robert Kraft. Murdoch invested $125m but in 2017 he sold out for $1

    Holmes went out of her way to attract big-name investors. Bad mistake - big names don't take accept being scammed lying down, and pissing off Murdock who controls newspapers including the Wall Street Journal was about the worst target she could have chosen.