SAN JOSE, California — Jurors in Elizabeth Holmes’ criminal fraud trial told the judge Monday that they are deadlocked on three of the 11 counts against the Theranos founder, but will continue deliberations after being instructed by the judge not to hurry their decisions.
News of the deadlock is the most significant development from the jury as they continue their seventh day of deliberations in Holmes’ case. The trial has stretched on for four months — far longer than was initially expected — with little information coming from the jury room since deliberations began before Christmas.
The note from the jury did not detail on which counts they have been unable to reach a unanimous verdict. Holmes faces two counts of conspiracy to commit wire fraud, as well as nine counts of wire fraud. Six counts allege investors were defrauded, with two counts alleging fraud against patients, and another related to patients via advertising and marketing. Each fraud charge carries a penalty of up to 20 years in prison. It was not clear if the jury was in agreement on the other eight counts.
Prosecutor Robert Leach asked Judge Edward Davila to read to jurors the court’s standard deadlocked-jury instructions, tweaked to note that the deadlock related to only three counts rather than the whole case. A lawyer for Holmes, Kevin Downey, raised concerns that the instructions could put improper pressure on jurors. “They’ve been at it for a very long period of time,” Downey said. “Exhaustion is always a factor that increases the risk with regard to an instruction that can be heard as coercive.” Downey asked Davila to read the jury the section of their original jury instructions that addressed the presumption of innocence.
Davila read the deadlocked-jury instructions, which tell jurors, “you should not hesitate to reexamine your own views and change your opinion if you become persuaded that it is wrong,” but also that, “You should not, however, change an honest belief as to the weight or effect of the evidence solely because of the opinions of your fellow jurors or for the mere purpose of returning a verdict.
“What I have just said is not meant to rush you or pressure you into agreeing on a verdict. Take as much time as you need to discuss things. There is no hurry.”
Davila also read the presumption-of-innocence section of the jury instructions, then sent the eight men and four women of the jury back to continue deliberations.
Holmes, who sat upright during courtroom discussions over the jury note, looked steadily at the jury members as they filed out to resume deliberating her fate. Afterward, she embraced and whispered with her partner Billy Evans, who is the father of her baby, then with her mother Noel and father Christian.
The startup founder is accused of bilking investors out of hundreds of millions of dollars and misleading patients by claiming her blood-testing company could conduct all the tests of a major lab with just a few drops of blood from a finger stick, though Theranos’ machines could in reality only perform a dozen tests and suffered from serious accuracy problems.
Federal lawyers have painted Holmes as a reckless, fame-seeking schemer whose “lying and cheating to get money” robbed investors and threatened patients’ health. Her defense team, meanwhile, presented Holmes as a true believer in Theranos’ technology who trusted others in the company too much but “worked herself to the bone” to deliver on her promises.
A parade of investors testified that Holmes claimed to them that her technology was in use on military helicopters, after the jury heard from Theranos insider Daniel Edlin, who spent five years at the company in management roles close to Holmes, that he was not aware of the company’s technology being used clinically in war zones or military aircraft. Former U.S. Secretary of Defense James Mattis, an investor who served on the Theranos board with former U.S. Secretaries of State Henry Kissinger and the late George Shultz, testified that he was not aware of the U.S. Defense Department using Theranos machines.
Investors also testified that Theranos had sent them reports they believed were from pharmaceutical giants validating Theranos’ technology in glowing terms, when they were actually created by Theranos and emblazoned with stolen pharma-firm logos.
Holmes’ 10-lawyer team sought to distance her from lab operations and highlight the sophistication of the company’s investors. And in a twist that defied common legal convention, Holmes herself took the stand as the principal witness in her defense.
Over seven days on the stand, Holmes blamed others, particularly laboratory directors and her ex-lover, former Theranos chief operating officer Sunny Balwani, for problems with the technology, while also expressing regret for some of her actions and acknowledging that she was ultimately responsible for what occurred in her company.
Balwani will face trial on the same set of fraud charges next year.
