Elizabeth Holmes Trial: Jury says it is deadlocked on three counts

By Sara Ashley O’Brien, CNN Business

Editor’s Note: The jury has now returned a verdict in the trial of Elizabeth Holmes. Read the full story here.

The jury tasked with determining the fate of Elizabeth Holmes, the former CEO and founder of failed blood testing startup Theranos in her criminal trial, said that it remains unable to come to a unanimous verdict on three of the 11 counts.

Earlier Monday, the jury of eight men and four women, which had deliberated for 45 hours at that time, returned a note indicating they were at a standstill and could not reach a unanimous verdict on all counts. The jury did not indicate on which counts they were unable to reach a verdict.

In response, Judge Edward Davila, who is presiding over the case, issued what is known as an Allen charge, instructing them to continue deliberating to try to reach a verdict.

Hours later, the jury returned another note that indicated it remains unable to reach a verdict on those counts.

Before jurors were brought in to be read the additional instructions, Judge Davila raised the possibility of a partial verdict should the jurors remain conflicted on returning verdicts for any of the counts. In addition to reading the instruction to continue deliberations, the judge also read aloud a portion of the original jury instructions pertaining to Holmes’ presumed innocence “unless or until the government proves her guilty beyond a reasonable doubt.”

“The jury can render a verdict on counts they are unanimous on and then the government will determine whether to retry the case on the counts they are deadlocked on,” said George Demos, a former Securities and Exchange Commission prosecutor and adjunct law professor at the UC Davis School of Law.

The note is only the third the jury has sent since getting the case. Their first note inquired about taking home jury instructions, which was not permitted. Their second note requested to have replayed audio recordings of a call where Holmes could be heard pitching investors on the company for a new round of financing.

Holmes, once hailed as a visionary and the next Steve Jobs, faces nine counts of federal wire fraud and two counts of conspiracy to commit wire fraud over allegations she lied to investors, doctors and patients about her company’s blood testing capabilities for financial gain.

Holmes, who pleaded not guilty, faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count.

The jury update comes after a trial that spanned over three months at a federal courthouse in San Jose. First indicted more than three years ago — the trial was delayed by the pandemic and the birth of Holmes’ child — her case marks a rare criminal fraud trial of a Silicon Valley entrepreneur.

Holmes, now 37, is a Stanford dropout who founded Theranos in 2003 at age 19 with the aim of revolutionizing blood testing. She raised $945 million from high-profile individuals including media mogul Rupert Murdoch, Oracle founder Larry Ellison, Walmart’s Walton family and the billionaire family of former Secretary of Education Betsy DeVos. At its peak, Theranos was valued at $9 billion, making Holmes, for a time, a billionaire. Then, the dominoes started to fall after a Wall Street Journal investigation in 2015.

Federal prosecutors called 29 witnesses to testify, including ex-Theranos employees, retail executives and a former US Defense Secretary. Through their testimony, the government attempted to unravel the complicated web of alleged deception that it claims misled investors and patients into believing the company was accurately, reliably, and efficiently performing a range of blood tests using just a few drops of blood taken from a finger prick with its proprietary technology.

The defense called three witnesses, culminating with lengthy testimony from Holmes herself.

Over the course of roughly 24 hours on the stand, spread out across seven court days, Holmes acknowledged some of the government’s points but maintained that she never intended to deceive anyone. At times, she expressed some contrition. She also deflected blame onto others — most notably, her ex-boyfriend, Theranos’ former president and chief operating officer Ramesh “Sunny” Balwani. (Balwani faces the same charges as Holmes and is set to be tried early next year. He has pleaded not guilty.)

Holmes alleged that she was the victim of a decade-long abusive relationship with Balwani, who she testified sought to control nearly every aspect of her life, claiming it would help her succeed in the business world. Balwani previously denied the abuse allegations in court filings.

Near the end of her time on the stand, Holmes testified that while she wasn’t aware of everything that happened at Theranos, she herself “never” took any steps to try to mislead people who invested in the company.

“They were people who were long-term investors, and I wanted to talk about what this company could do a year from now, five years from now, ten years from now,” she testified. “They weren’t interested in today or tomorrow or next month. They were interested in what kind of change we could make.”

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