Jury is deadlocked on 3 of 11 fraud charges : NPR

Elizabeth Holmes walks into federal court in San Jose, Calif.

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Nic Coury/AP

Elizabeth Holmes walks into federal court in San Jose, Calif.

Nic Coury/AP

Jurors in the criminal fraud trial of Elizabeth Holmes sent a note to the judge on Monday morning saying they could not reach a unanimous decision on three of 11 fraud charges against the former Silicon Valley executive.

The note, however, seemed to suggest that they all agree on at least eight counts. If that’s the case, it puts to rest speculation that they couldn’t reach a verdict at all, which would have led to a mistrial.

If convicted, the onetime Silicon Valley superstar and former CEO of the blood-testing company Theranos faces the maximum possible punishment of 20 years in federal prison.

U.S. District Judge Edward Davila responded by reading the jury an Allen charge — instructions that encourage jury members to keep deliberating until they reach a unanimous decision on all charges.

Under federal court rules, juries can come up with verdicts in which some of the charges are undecided, but it is rare. So far, it is unclear which way the jury was leaning: guilty, not guilty or mixed.

The jury has been deliberating for seven days, taking breaks for Christmas and New Year’s Eve. The jury has heard testimony from dozens of witnesses over four months in one of the most high-profile trials in Silicon Valley in decades.

At the center of the case is Holmes, a former tech executive who drew comparisons to Steve Jobs. A Stanford University dropout, Holmes dazzled Silicon Valley by founding Theranos at age 19. She promised that its technology could screen patients for hundreds of diseases with just a finger prick of blood. She built Theranos into what became a $9 billion company promising to revolutionize the health care industry.

After scrutiny from the media and government regulators, Theranos, in 2018, collapsed under scandal, unable to recover from reports that its technology could not accomplish what it had promised.

Federal prosecutors say Holmes, now 37, intentionally deceived investors and patients and conspired with her then-boyfriend and Theranos deputy, Ramesh “Sunny” Balwani, in masterminding a large-scale fraud that resulted in the loss of hundreds of millions of dollars and faulty patient tests.

Holmes, who took the stand over seven days, apologized for mistakes made while she was chief executive of Theranos and said others at the company were to blame for the firm’s eventual downfall.

Holmes’ defense lawyers argued that her exaggerations about the company were always made in good faith, expecting the technology to one day catch up to her grandiose promises.

In some of the most emotional testimony of the trial, Holmes wept from the witness stand in recounting alleged emotional and sexual abuse she said she suffered at the hands of Balwani, who was also charged but is set to have a separate trial in February.


Jurors in the criminal fraud trial of Elizabeth Holmes say they are deadlocked on 3 of 11 fraud charges against her. The jury has been deliberating for seven days in the high-profile trial of the former Silicon Valley executive. NPR’s Bobby Allyn has been covering the trial. He joins us now from outside the courthouse in San Jose. Hey there, Bobby.

BOBBY ALLYN, BYLINE: Hey. How are you doing?

KELLY: I’m all right. So what does this mean? The jury’s deadlocked on some but not all of the charges.

ALLYN: Yeah. So it means after seven days of hashing this out, there’s still a lot of debate about whether Elizabeth Holmes broke the law. And look. This is a pretty technical case, right? She’s facing 11 charges – nine wire fraud, two charges of conspiracy to commit wire fraud. And trying to get, you know, 12 people to agree beyond a reasonable doubt that she did or did not break these laws is just a complex process. I mean, this was a four-month trial, so there’s a mountain of evidence. And the jury heard from more than 30 witnesses, including from Holmes herself.

KELLY: And how’s it work? Can they continue deliberating on the other charges?

ALLYN: Yes. So the judge read what’s known as an Allen charge, which refers to an instruction to basically encourage the jurors to keep deliberating on the counts that they cannot all decide. So, you know, it could be an hour. It could be days. What we know, though, is that the jury likely has reached a decision on most of the charges, so they probably have a verdict in hand on 8 of the 11 charges. But the remaining three – there’s just too much debate. They can’t figure it out.

KELLY: Do we know, just by the way, which charges they’re deadlocked on?

ALLYN: We don’t. No.

KELLY: OK. All right. So just walk me through again how we got here, what kind of evidence this jury has been listening to over these last four months.

ALLYN: Yeah. The government called former Theranos employees who blew the whistle after they said they saw the company covering up some of its shortcomings from Theranos investors who say they were duped out of millions of dollars and from patients who said they were given false results when they took blood tests from Theranos. But the main event, Mary Louise, was when Holmes took the witness stand herself, right? And she said, look. I was a big dreamer. I wanted to revolutionize the health care industry, and sometimes that means making some exaggerations. But, you know, she said, these big promises that she was making – she always thought that they would come true, right?

And Holmes also pointed the finger at lab directors, who she said were more in touch, you know, with the technology than she was. And most controversially, she pointed the finger at her ex-boyfriend and deputy at Theranos, this guy named Sunny Balwani, saying she was sexually and emotionally abused during the time of the alleged crimes.

KELLY: Quite how big a deal, Bobby, is this trial in Silicon Valley? How closely watched is it?

ALLYN: Extremely closely watched. And that’s because Theranos was once the hottest startup in the valley – right? – valued at $9 billion at its height. That’s bigger than Uber or Spotify at the time, right? She was on the cover of magazines. She was on Ted Talks. Everyone saw Elizabeth Holmes’ face and heard from her, right? So it’s a spectacular fall from grace. But also, Mary Louise, you know, the trial’s really raised questions about the culture out here that maybe enables some of these kinds of exaggerations that startup founders often make. I mean, she was reaching beyond her grasp – right? – with Theranos in saying what it can possibly do. But some people are saying, is that just the culture – you know, the fake-it-till-you-make-it culture out here? Or does this mean, you know, something more than that?

KELLY: NPR’s Bobby Allyn outside the courthouse there in San Jose, Calif. Thank you, Bobby.

ALLYN: Thanks so much.


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