Elizabeth Holmes found guilty on four out of 11 federal charges

(CNN Business)Elizabeth Holmes, the former CEO and founder of failed blood testing startup Theranos, was found guilty on four charges of defrauding investors, capping off the stunning downfall of a former tech icon.

She was found not guilty on three additional charges concerning defrauding patients and one charge of conspiracy to defraud patients. The jury returned no verdict on three of the charges concerning defrauding investors, and Judge Edward Davila, who is presiding over the case, is expected to declare a mistrial on those charges.

The charges Holmes was found guilty of include one count of conspiracy to defraud investors, as well as three wire fraud counts tied to specific investors. Holmes faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count.

Holmes departed the courthouse hand-in-hand with her partner, Billy Evans, her mother and her father. She was met with a sea of cameras and reporters but did not comment in response to questions shouted from reporters.

In a statement, U.S. Attorney Stephanie Hinds applauded the verdict.

"The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacles," she said, in a statement that was read aloud by a spokesperson outside the courthouse. "The guilty verdicts in this case reflect Ms. Holmes' culpability in this large-scale investor fraud, and she must now face sentencing for her crimes."

Notably, the jury of eight men and four women determined that Holmes was guilty on counts pertaining to investors, but none of the counts that pertained to defrauding patients. Over the course of its 11-week case, the government called just three patient witnesses to the stand, two of whom were individually tied to wire fraud counts.

The jury deliberated for over 50 hours before returning a verdict on eight of the 11 charges. Earlier Monday, the jury returned a note indicating they could not reach a unanimous verdict on three of the counts. In response, Judge Davila issued what is known as an Allen charge, instructing them to continue deliberating to try to reach a verdict.

However, hours later, the jury returned another note that indicated it remained unable to reach a verdict on those counts. The counts pertained to three of the investor wire fraud charges.

The verdict comes after a trial that spanned over three months at a federal courthouse in San Jose. More than 30 witnesses testified during the trial, culminating with Holmes, who took the stand for seven days in her own defense.

Holmes' case marked a rare criminal fraud trial of a Silicon Valley entrepreneur. Jurors were tasked with determining whether Holmes was a well-meaning founder who made mistakes as she built her startup, as her defense posited, or whether she intentionally deceived investors and patients in order to help herself and her company succeed, as federal prosecutors alleged.

While Holmes was the one on trial, the outcome of her case could serve as a cautionary tale for others in Silicon Valley.

"This is a verdict that should matter not just to Silicon Valley but to the people who celebrate it, invest in it and use its products," said Margaret O'Mara, a historian of the tech industry and professor at the University of Washington. "She was made possible by a Valley business culture that celebrated and encouraged very young, marginally experienced people."

George Demos, a former Securities and Exchange Commission prosecutor and adjunct law professor at the UC Davis School of Law, called the verdict "a significant win for the government and sends a powerful signal to Silicon Valley that fraud cannot masquerade as innovation."

While much of Silicon Valley has tried to distance itself from Theranos for a variety of reasons, including that the startup was a medical device manufacturer, the power and control Holmes wielded over Theranos had all the trappings of a tech company, O'Mara said.

"She was not just the CEO," O'Mara said, "she was a very powerful CEO in the Silicon Valley model."

The rise and fall of Elizabeth Holmes

Holmes, now 37, started Theranos in 2003 at the age of 19 and soon thereafter dropped out of Stanford to pursue it full-time. After a decade under the radar, Holmes began courting the press with claims that Theranos had invented technology that could accurately and reliably test for a range of conditions using just a few drops of blood taken from a finger prick. The unveiling coincided with the company's announcement in 2013 of a major retail partnership with Walgreens.

Theranos raised $945 million from an impressive list of investors, 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 a paper billionaire. She was lauded on magazine covers, frequently wearing a signature black turtleneck that invited comparisons to the late Apple CEO. (She has not worn that look in the courtroom.)

O'Mara said Holmes was particularly beloved by the media as an intrepid entrepreneur working on a product that aimed to make the world better -- and a rare female founder at that.

But the dominoes started to fall after a Wall Street Journal investigation in 2015 found the company had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary blood testing device, and with questionable accuracy. Instead, Theranos was relying on third-party manufactured devices from traditional blood testing companies.

In 2016, Theranos voided two years of blood test results. In 2018, Holmes and Theranos settled "massive fraud" charges with the Securities and Exchange Commission, but did not admit to or deny any of the allegations as part of the deal. Theranos dissolved soon after.

The scene inside and outside the courtroom

First indicted in 2018, Holmes' trial was delayed by the pandemic and the birth of her child. But public interest in Holmes has remained strong since then, with documentaries, podcasts, an upcoming TV miniseries and a planned feature film.

That fascination was apparent outside the courtroom. Members of the public and the press gathered as early as 2 a.m. local time on major days of the trial to get one of the 34 courtroom seats available. A ticketed overflow room sat another roughly 45 people. There was otherwise no way to view the events because audio and video recordings were prohibited.

The trial drew apparent friends of Holmes, some of whom showed up on the day of opening statements dressed in a look that resembled the former CEO at Theranos' peak -- clad in black attire with blonde hair pulled back at the nape of their necks. It also attracted an artist who set up a performance art display outside the courthouse, selling a very limited number of blonde wigs, black turtlenecks and "blood energy" drinks. She said she wanted to see "what it was like experiencing her energy."