SAN JOSE, Calif. — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, was found guilty of four of 11 charges of fraud on Monday, in a case that came to symbolize the pitfalls of Silicon Valley’s culture of hustle, hype and greed.Ms. Holmes was the most prominent tech executive to field fraud accusations in a generation of high-flying, money-losing start-ups. A jury of eight men and four women took 50 hours to reach a verdict, convicting her of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty on four other counts. The jury was unable to reach a verdict on three counts, which were set aside for later.Each count carries a maximum sentence of 20 years in prison, terms that are likely to be served concurrently. Ms. Holmes is expected to appeal. The verdict stands out for its rarity. Few technology executives are charged with fraud and even fewer are convicted. If sentenced to prison, Ms. Holmes would be the most notable female executive to serve time since Martha Stewart did in 2004 after lying to investigators about a stock sale. And Theranos, which dissolved in 2018, is likely to stand as a warning to other Silicon Valley start-ups that stretch the truth to score funding and business deals.The mixed verdict suggested that jurors believed the evidence presented by prosecutors that showed Ms. Holmes lied to investors about Theranos’s technology in the pursuit of money and fame. They were not swayed by her defense of blaming others for Theranos’s problems and accusing her co-conspirator, Ramesh Balwani, the company’s chief operating officer and her former boyfriend, of abusing her.They were also not swayed by the prosecutor’s case that she had defrauded patients. Ms. Holmes was acquitted on four counts related to patients who took Theranos’s blood tests and one related to advertisements that the patients saw.The guilty verdict arrived in a frenzied period for the tech industry, with investors fighting to get into hot deals and often ignoring potential red flags about the companies they were putting money into. Some have warned that more Theranos-like disasters loom.In recent years, tales of start-up chicanery, from the bungled initial public offering of WeWork to the aggressive boundary-pushing tactics of Uber, have not slowed the flow of capital toward charismatic founders spinning tales of business success. Those downfalls captured the public’s attention, but did not result in criminal charges.Yet the Justice Department under President Biden has renewed its focus on white-collar crimes. “We will urge prosecutors to be bold,” Lisa O. Monaco, the deputy attorney general, recently said in a speech. “The fear of losing should not deter them.”Ms. Holmes’s conviction sends a message to other founders and executives to be careful about their statements to investors and the public, said Jessica Roth, a law professor at Cardozo School of Law and former federal prosecutor in the Southern District of New York.It “shines a light on the importance of drawing a distinction between truth and optimistic projections — and keeping that clear in ones mind,” she said.Ms. Holmes rose to prominence by mimicking the disruptive change-the-world chutzpah of Silicon Valley heroes like Steve Jobs — a playbook that has turned companies like Apple, Tesla, Google and Facebook into some of the most valuable in the world.In the process, she captured the attention of heads of state, top business leaders and wealthy families with idealistic plans to revolutionize the health care industry. She traveled the world on private jets, was feted with awards and glowing magazine cover stories and lauded as the world’s youngest self-made female billionaire.But she crossed into fraud when she lied about the accuracy, types and number of tests Theranos’s machines could do to raise funding and secure business deals.“That’s a crime on Main Street and it’s a crime in Silicon Valley,” said Robert Leach, an assistant U.S. attorney, said in opening statements at the trial’s start.The verdict concludes nearly four months of proceedings that alternated between exhilarating and plodding. There were delays because of a coronavirus scare, a burst water pipeline, technology problems in the courtroom and juror travel. One juror was dismissed for playing Sudoku and another for her Buddhist faith. Crowds of spectators, many of whom followed the Theranos saga via podcasts, documentaries, books and news articles, waited for hours for a spot in the courtroom’s limited seats.Inside, jurors heard from dozens of witnesses and viewed hundreds of pieces of evidence used to support prosecutors’s argument that Ms. Holmes knowingly misled investors and patients on her rise to fame and fortune.Witnesses included James Mattis, the former defense secretary who sat on Theranos’s board, as well as Lisa Peterson, who managed money for the wealthy family of a former education secretary, Betsy DeVos, and invested $100 million into Theranos. Prominent investors including Rupert Murdoch and Larry Ellison, as well as two former secretaries of state, George Shultz and Henry Kissinger, who sat on its board, were discussed but never called to the stand.The case’s evidence outlined Ms. Holmes’s role in faked demonstrations, falsified validation reports, misleading claims about contracts, and overstated financials at Theranos. Jurors heard recordings and watched videos of Ms. Holmes making inflated or misleading claims about Theranos.Before it shut down in 2018, Theranos voided two years’ worth of its blood tests. It paid to settle several investor lawsuits, as well as fraud charges by the Securities and Exchange Commission.But prosecutors argued that Ms. Holmes’s actions went beyond those punishments — they were criminal. She led investors to lose hundreds of millions of dollars and patients to get unreliable test results, they said.“At so many of the forks in the road, she chose the dishonest path,” John Bostic, an assistant U.S. attorney, said in closing arguments.In her defense, Ms. Holmes’s lawyers tried to discredit testimony from whistle-blowers, attacked investors for not doing more research into Theranos and said Ms. Holmes’s failures were not a crime.Ms. Holmes capped the proceedings by taking the stand. Over seven days of testimony, she alternated between accepting responsibility for certain missteps and deflecting blame for other problems to colleagues.She said she believed that Theranos’s tests worked and had relied on the expertise of more qualified people running the company’s lab. And she used her charisma to sell jurors on the same vision of the future that, years earlier, had helped her win over investors, world leaders and the press.“I wanted to talk about what this company could do a year from now, five years from now, 10 years from now,” Ms. Holmes said. “I wanted to talk about what was possible.”Ms. Holmes’s argument that her optimistic projections were no different than that of other Silicon Valley companies contradicted the government’s evidence, which was consistent with traditional fraud cases, Ms. Roth said.“If other founders and executives are engaged in the kinds of deceit that was alleged and proven by considerable evidence in this case, then they should be concerned,” she said.Most strikingly, Ms. Holmes accused Mr. Balwani of emotional and sexual abuse. The pair dated in secret for more than decade, even owning an estate in Atherton, Calif., together. Ms. Holmes said Mr. Balwani, who is around 20 years older than her, controlled every aspect of her life, including her schedule, self-presentation and time spent with her family. She also accused him of forcing her to have sex with him. Mr. Balwani has denied the allegations.That testimony, delivered through tears, threatened to turn the tide against the prosecutor’s case by appealing to the jury’s emotions and painting Ms. Holmes as a victim. But it was a risky strategy, experts have said, particularly since Ms. Holmes did not provide an expert witness to put her accusations in context of the wire fraud charges.Mr. Balwani, known as Sunny, will stand trial next year. He has also pleaded not guilty.

The trial for the founder of Theranos, the once high-flying blood testing start-up, will cap a saga of Silicon Valley hubris, ambition and deception.SAN FRANCISCO — After four years, repeated delays and the birth of her baby, Elizabeth Holmes, the founder of the blood testing start-up Theranos, is set to stand trial for fraud, capping a saga of Silicon Valley hubris, ambition and deception.Jury selection begins on Tuesday in federal court in San Jose, Calif., followed by opening arguments next week. Ms. Holmes, whose trial is expected to last three to four months, is battling 12 counts of fraud and conspiracy to commit wire fraud over false claims she made about Theranos’s blood tests and business.In 2018, the Department of Justice indicted both her and her business partner and onetime boyfriend, Ramesh Balwani, known as Sunny, with the charges. Mr. Balwani’s trial will begin early next year. Both have pleaded not guilty.Ramesh Balwani, known as Sunny, center, the former business partner and boyfriend of Ms. Holmes, in 2019. He will go on trial next year and has pleaded not guilty.Michael Short/BloombergMs. Holmes’s case has been held up as a parable of Silicon Valley’s swashbuckling “fake it till you make it” culture, which has helped propel the region’s start-ups to unfathomable riches and economic power. That same spirit has also allowed grifters and unethical hustlers to flourish, often with little consequence, raising questions about Silicon Valley’s tightening grip on society.But the trial will ultimately be about one individual. And the central question will be whether Ms. Holmes was a deceptive schemer driven by greed and power, or a naïf who believed her own lies and was manipulated by Mr. Balwani.The case hinges on Ms. Holmes’s knowledge of the problems with Theranos’s blood testing devices. Her lawyers could argue that she was merely the start-up’s public face while Mr. Balwani and others handled the technology, legal experts said. They could make the case that the sophisticated investors who backed Ms. Holmes should have done better research on Theranos. And they could say that Ms. Holmes was simply following Silicon Valley’s norms of exaggeration in service of an ambitious mission.Last year, Judge Edward Davila of U.S. District Court for the Northern District of California agreed to separate Ms. Holmes’s and Mr. Balwani’s cases. The move was unusual for such cases, legal experts said, and allows the pair to blame each other with no ability to respond.In sealed court filings from 2020 that were made public over the weekend, Ms. Holmes said that her relationship with Mr. Balwani had a “pattern of abuse and coercive control.” The filings said Ms. Holmes’s lawyers might introduce expert testimony on her mental state and the effects of the alleged abuse. Mr. Balwani’s lawyers denied the accusations in a filing. If convicted, Ms. Holmes, 37, faces up to 20 years in prison. While high-profile start-up founders from Uber’s Travis Kalanick to WeWork’s Adam Neumann have experienced swift falls from grace over ethics scandals, Ms. Holmes may become one of the few to actually go to jail for it.“All too often this kind of fraud doesn’t get prosecuted,” said Alex Gibney, director of “The Inventor,” a documentary about Theranos. “So many other people fake it till they make it, but that never justifies not bringing charges when someone has committed fraud.”Ms. Holmes’s lawyers did not respond to a request for comment. A lawyer for Mr. Balwani, 56, declined to comment, as did a representative for the U.S. attorney’s office for the Northern District of California, which is prosecuting the case.Looming large over the trial will be the public’s fascination with the scandalous details of the Theranos drama.For years, Ms. Holmes cultivated her public image with an unusually deep voice, an intense stare and an uniform of black turtlenecks meant to evoke Steve Jobs. She installed bulletproof glass in her office and traveled by jet or chauffeur with a security detail. In 2019, she reportedly married William Evans, a hotel heir. She gave birth to their son in July.The Theranos blood testing machine at the company lab.Carlos Chavarria for The New York TimesHer high profile presents a challenge in finding jurors who have not formed opinions about her or the case. Jury members filled out a 28-page questionnaire outlining their media consumption, medical experiences and whether they have heard of Ms. Holmes or seen her TED Talk. Approximately half of the more than 200 potential jurors had consumed media related to the case, according to a court filing last week.It is unclear whether Ms. Holmes will take the stand to defend herself. As Theranos’s chief executive and chairwoman, she was persuasive and inspiring. She fiercely defended Theranos and dismissed any criticism as a sign that the company was changing the world.But if Ms. Holmes takes the stand, prosecutors could use past statements to hurt her credibility. In a Securities and Exchange Commission deposition in 2017, she responded to questions by saying “I don’t know” at least 600 times.“It will be hard for her to say, ‘I remember it this way,’ when she said ‘I don’t know’ so many times,” said John C. Coffee Jr., a professor at Columbia Law School who is not involved in the case. “That is the most damaging evidence against her.”By the time the United States indicted Ms. Holmes in 2018, the once high-flying Theranos was all but dead.Ms. Holmes founded the start-up at age 19 in 2003 and dropped out of Stanford soon after. She hired Mr. Balwani in 2009 and raised more than $700 million from investors, valuing Theranos at $9 billion. The Palo Alto, Calif., company struck deals with Walgreens and Safeway to offer its blood testing in their stores. It also attracted dignitaries, senators and generals — including George Shultz, Henry Kissinger, William Frist and James Mattis — to its board of directors.“We’ve reinvented the traditional laboratory infrastructure,” Ms. Holmes said at a 2014 conference. “It eliminates the need for people to have needles stuck in their arm.”Then in 2015, The Wall Street Journal published a series of exposés that called the effectiveness of the Theranos machines into question.“She committed a fraud,” said Dr. Phyllis Gardner, a Stanford medical professor who was an early Theranos skeptic. “She harmed many patients. She bilked people out of their money.”Increased scrutiny from regulators and investors revealed further problems and accusations of deception, leading to civil fraud charges from the Securities & Exchange Commission and a lawsuit from investors and Walgreens.By 2016, Forbes had lowered its estimate of Ms. Holmes’s net worth from $4.5 billion to nothing. In 2018, she settled with the S.E.C. and investors. That same year, Theranos shut down.The Justice Department’s indictment, also issued that year, accused Ms. Holmes and Mr. Balwani of telling investors that Theranos’s blood testing machines could quickly perform a full range of clinical tests using a finger stick sample of blood, even though both knew the tests were limited, unreliable and slow. Ms. Holmes and Mr. Balwani also overstated Theranos’s business deals and told investors that the company would generate $1 billion in revenue in 2015, when it made only a few hundred thousand dollars, the indictment said.Ms. Holmes after a hearing in federal court in San Jose, Calif., in 2019.Stephen Lam/ReutersMs. Holmes’s lawyers have since repeatedly pushed for delays to the trial. They have sought to have evidence excluded and witnesses blocked. And they have argued over other details, such as whether Ms. Holmes must wear a mask during the proceedings.Some fraud charges on behalf of doctors and patients, whose tests were paid for by insurance, were dropped from the case last year. But patients of Theranos whose test results were inaccurate are being allowed to testify.The potential witness list of more than 200 people includes many big names who entered the Theranos orbit. Among them: Rupert Murdoch, the media mogul who invested in the start-up; David Boies, the star lawyer who represented Ms. Holmes and sat on Theranos’ board; and Mr. Kissinger, Mr. Frist and Mr. Mattis.Lawyers in the case have also sparred over the hype and stretching of the truth in Silicon Valley fund-raising. To keep the focus on Theranos, prosecutors have tried to prevent Ms. Holmes’s lawyers from arguing that it is common practice for start-ups to exaggerate their claims to garner investments. But Judge Davila has said the court would permit general comments on the topic.“Fake it till you make it — you don’t do that in medical devices,” Dr. Gardner said. “They’re highly regulated. They have to be perfectly accurate and not harm anyone, and this did.”