Elizabeth Holmes jury split on 3 of 11 fraud charges

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SAN JOSE, Calif. — The jury weighing fraud charges against former Theranos CEO Elizabeth Holmes on Monday said it is deadlocked on three of the 11 felony counts against her, signaling the end may be near for a legal drama that’s captivated Silicon Valley.

Holmes, a once-celebrated entrepreneur, is accused of duping investors and patients about a flawed blood-testing technology that she hailed as a medical breakthrough.

After receiving a note from the jury, U.S. District Judge Edward Davila summoned the eight men and four women back to the courtroom where Holmes’ trial took place. He urged them to reexamine their positions while adhering to their instructions to only return a guilty verdict if convinced beyond a reasonable doubt.

“Take as much time as necessary. There is no hurry,” Davila emphasized.

The jury then returned to its deliberations, which have taken more than 40 hours so far. They have sent out three notes, but Monday’s marked their first communication to the judge that directly addressed potential verdicts.

That note also means that jurors have agreed on verdicts on eight of the charges facing Holmes. Nine of the 11 counts are fraud charges and two revolve around a conspiracy to commit fraud from 2010 to 2015. During that time, Holmes became a Silicon Valley sensation, one worth $4.5 billion on paper based on her promise that Theranos’ technology would revolutionize health care.

If convicted of any of the charges, Holmes, 37, could face up to 20 years in federal prison.

“For all intents and purposes, the government only needs a guilty verdict on one count,” said Keri Curtis Axel, a former federal prosecutor now working as a trial lawyer at the Los Angeles law firm Waymaker. She said the hang-up on three counts makes it more likely that jurors have reached guilty verdicts on at least some of the other counts.

Robert Leach, a federal prosecutor who grilled Holmes when she took the witness stand to defend herself during the three-month trial, supported the judge’s decision to send the jury back to their deliberations.

“Both sides have an interest in resolution on all counts,” Leach told Davila outside the jury’s presence.

David Ring, a lawyer who has been following the Holmes case closely, also interpreted Monday’s note as an indication that Holmes is likely to be convicted on some counts. He expects a resolution this week.

“It could go another day or so before the jury either comes back with a verdict on all counts or sends another note telling the judge they’re still stuck,” Ring said.

Holmes was present at Monday’s hearing to review the jury’s note. She looked across the courtroom at the jurors when they walked in and walked out, but none appeared to return her glance. Once the jurors were gone, Holmes turned around and hugged her mother, who was sitting behind her. Her father then kissed her forehead through his mask, which court rules require of everyone present.

After starting Theranos in 2003 as a 19-year-old college dropout, Holmes began working on a technology that she repeatedly promised would be able to scan for hundreds of health issues with just a few drops of blood taken with a finger prick. Conventional methods requires a needle inserted into a person’s vein to draw a vial of blood for each test, which must then be carried out at large laboratories.

Holmes believed she could provide more humane, convenient and cheaper blood tests with “mini-labs” in Walgreens and Safeway stores across the U.S., using a small testing device dubbed “Edison” in homage to the famous inventor.

The concept proved to be compelling. Theranos raised more than $900 million from a long list of elite investors, including savvy billionaires such as media mogul Rupert Murdoch and software magnate Larry Ellison.

But most people didn’t know that the Theranos blood-testing technology kept producing misleading results that led the company to secretly rely on conventional blood testing. Evidence presented at the trial also showed Holmes lied about purported deals that Theranos had reached with big drug companies such as Pfizer and the U.S. military.

In 2015, a series of explosive articles in the Wall Street Journal and a regulatory audit of Theranos’ lab uncovered potentially dangerous flaws in the company’s technology, leading to the company’s eventual collapse.

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