Thanks to a podcast and a Sundance premiere, there's a new "scammer" making headlines: Elizabeth Holmes. The disgraced former Theranos COO is the subject of not one, but two upcoming documentaries detailing her success and eventual banishment from Silicon Valley. The HBO documentary The Inventor: Out for Blood in Silicon Valley by Academy Award-winning director Alex Gibney and the recently announced ABC 20/20 special The Dropout, which shares its name with the ABC Radio podcast also about Holmes, describe the company she ran for years and how her empire came crumbling down. Holmes is currently awaiting trial for a fraud case that could result in her being behind bars for potentially 20 years. But when can we expect a verdict for Elizabeth Holmes, and is prison time actually likely?
Why Hasn't Holmes Gone To Trial Yet?
Well, let's look at the details. Before Holmes started to be referenced in the same sentence as the likes of Billy McFarland, she hoped to be compared to technological geniuses and fellow college dropouts Steve Jobs and Mark Zuckerberg. She founded her company Theranos in 2003 and ABC News reports that, at one point, the business was valued at nearly $10 billion. Holmes and her company were supposed to possess technology that could run hundreds of tests from one or two drops of blood to help diagnose patients. But, Holmes’s technology did not work and people ended up with incorrect results.
So, in June 2018, Holmes and Theranos chief operating officer and president Ramesh “Sunny” Balwani were indicted on 11-counts from the U.S. Department of Justice, nine for wire fraud, one for “Conspiracy to Commit Wire Fraud against Theranos Investors” and another for “Conspiracy to Commit Wire Fraud against Doctors and Theranos Patients.” Holmes pleaded not guilty, but ABC News reports, “If convicted, Holmes could face a maximum sentence of 20 years in prison and a fine of $250,000 for each count of wire fraud and for each conspiracy count.”
It’s safe to say the pending verdict from the trial is very far off. A date for the trial hasn’t even been set yet because more than 16 million pages of documents need to be examined for the case, and the process was delayed earlier this year due to the federal government shutdown, as reported on the ABC Radio podcast The Dropout. A status hearing has been set for April 22, 2019 in San Francisco which Holmes and Balwani are expected to attend.
So What Has Actually Happened?
On July 11 2017, Holmes testified under oath in front of the U.S. Securities and Exchange Commission. In 2018, Theranos was forced to shut down after the lawsuit and settlement announced by the SEC, (which also named Balwani), ordered Holmes to pay a $500,000 penalty, give up the voting control of the company, and cease serving as an officer of public company for a decade. But, as Rolling Stone reports, Holmes and Theranos did not admit to any wrongdoing.
How Is Her Case Looking, Ahead Of This April Hearing?
Holmes' 2017 testimony and lack of admittance of guilt are significant because they can be used by her legal team to support her claim of ignorance in the alleged fraudulent practices that occured at Theranos. She even said “don’t know” or “can’t remember” more than 660 times when answers questions in the 2017 testimony. But, Preet Bharara, former U.S. Attorney for the Southern District of New York and host of NPR's Stay Tuned with Preet said on The Dropout podcast that he isn’t sure the ignorance angle will prove successful for Holmes.
“You usually don't make precise and specific allegations of the type in this indictment unless you can back it up,” Bharara said on the podcast. “People forget this, motive is not really relevant to guilt. ... You have to prove that the person intended to do it, but doesn't matter if the reason was power or fame or greed. It doesn't matter.”
He added that it is likely Holmes will face jail time and that she should plead guilty. “I think depending on how the trial goes and depending on how strong the evidence is and depending on whether or not she testifies, I would be surprised if she got less than 10 years, but I've seen in cases like this that are very substantial,” Bharara said.
We will have to wait to see if Bharara’s predictions come true and when the trial date will be announced. Until then, The Inventor: Out for Blood in Silicon Valley (out March 18) and The Dropout documentary (which aired March 15) should help piece together everything you need to know about how Holmes ran her company into the ground.