The Unicorn That Wasn't: United States v. Elizabeth Holmes

It was the trial of the decade for Silicon Valley. Elizabeth Holmes, the black-turtleneck-wearing founder of Theranos, faced 11 counts of federal wire fraud and conspiracy.

In United States v. Elizabeth A. Holmes (Case No. 5:18-cr-00258), the Northern District of California dissected the collapse of a $9 billion startup.

Here is the legal breakdown of the case that changed how startup founders approach "faking it until you make it."

The "Wire Fraud" Standard

To convict Holmes, the government didn't need to prove her technology never worked. They had to prove she knowingly made false representations to investors to get their money.

The prosecution focused on specific "wires" (bank transfers) linked to specific lies:

* The Pfizer Logo: Holmes added pharmaceutical logos to internal reports to make them look like 3rd-party endorsements.

* The "Military" Claims: She told investors her tech was being used in medevac helicopters (it wasn't).

The Defense Strategy: "Failure is Not Fraud"

The defense argued that Holmes was a naive visionary who truly believed in her technology but failed to execute. They attempted to distinguish between "puffery" (standard startup optimism) and criminal fraud.

The jury didn't buy it. They convicted her on 4 counts, leading to an 11.25-year prison sentence.

Why This Matters

This docket is a massive repository of evidence regarding corporate governance, investor relations, and the limits of hype. It serves as a warning shot from the DOJ to the venture capital world.

Read the Primary Source

You can read the Superseding Indictment and the Jury Verdict Form directly on AskLexi.