United States v. Elizabeth Holmes: Theranos, Wire Fraud, and the Criminal Law of Startup Deception

United States v. Elizabeth Holmes: Theranos, Wire Fraud, and the Criminal Law of Startup Deception

Few American corporate-fraud cases have attracted as much public attention as the collapse of Theranos, the Silicon Valley health-technology company founded by Elizabeth Holmes.

Theranos presented itself as a company capable of transforming medical laboratory testing through technology that could perform numerous blood tests from very small quantities of blood. The company’s claims attracted substantial investment, prominent business relationships, and extensive public attention.

The company’s collapse eventually led to federal criminal charges against Holmes and Ramesh “Sunny” Balwani, a former Theranos executive.

The resulting prosecution, United States v. Elizabeth A. Holmes, No. 5:18-cr-00258-EJD, became an important federal white-collar criminal case involving conspiracy and wire fraud. The original indictment was returned in June 2018 and was later superseded. The operative indictment charged Holmes and Balwani with conspiracy to commit wire fraud and substantive wire-fraud offenses involving investors and patients.

Holmes was ultimately convicted of one count of conspiracy to commit wire fraud against investors and three counts of wire fraud against individual investors. She was acquitted of the patient-related conspiracy count and three patient-related fraud counts, while the jury did not reach unanimous verdicts on three additional investor-fraud counts.

In November 2022, a federal district court sentenced Holmes to 135 months—11 years and three months—in federal prison, followed by three years of supervised release.

The case did not end with sentencing. In 2025, the United States Court of Appeals for the Ninth Circuit affirmed Holmes’s conviction, sentence, and the district court’s restitution order. The court’s amended opinion, filed December 22, 2025, provides an important judicial account of the case and the appellate issues raised by Holmes and Balwani.

The Theranos case is therefore useful not merely as a corporate scandal, but as a study in federal wire fraud, conspiracy, material misrepresentation, investor deception, evidentiary questions, criminal procedure, sentencing, restitution, and the limits of entrepreneurial claims.

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1. The Theranos Story

Elizabeth Holmes founded Theranos in 2003.

The company’s stated ambition was to transform medical laboratory testing through technology capable of obtaining blood from a fingerstick and using a small sample to perform laboratory tests.

According to the Ninth Circuit’s later description of the case, Holmes and Balwani promoted the idea that Theranos could provide fast, accurate, and affordable testing using very small blood samples. The company’s claims attracted investors, healthcare professionals, commercial partners, and other influential supporters.

Theranos eventually became one of the most highly publicized technology startups in the United States.

But serious questions emerged concerning whether the company’s technology actually performed as represented.

Investigative reporting in 2015 brought substantial public attention to allegations concerning the company’s technology and testing practices. The Ninth Circuit later summarized the case as involving representations concerning Theranos’s blood-testing technology and its capabilities.

Federal authorities subsequently investigated the company and its executives.

The criminal prosecution that followed focused not simply on whether Theranos’s technology failed to live up to its promises.

The central criminal-law question was whether Holmes knowingly participated in schemes to defraud investors and others through materially false or misleading representations.

That distinction is crucial.

A failed business is not automatically a criminal fraud.

A startup that develops unsuccessful technology has not necessarily committed a federal crime.

The prosecution had to establish the elements of the charged offenses beyond a reasonable doubt.

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2. The Federal Criminal Case

Federal prosecutors charged Holmes and Balwani under federal wire-fraud law and the federal conspiracy statute applicable to the charged offenses.

The initial indictment was returned on June 14, 2018. The case was later superseded by additional indictments as the prosecution developed.

The operative prosecution involved two broad alleged schemes:

1. a scheme to defraud investors; and
2. a scheme to defraud doctors and patients.

The government alleged that Holmes and Balwani made false representations concerning Theranos’s technology, capabilities, business relationships, financial prospects, and other matters.

The indictment alleged, among other things, that the defendants knew that the company’s technology had significant accuracy and reliability limitations while representing the technology as capable of performing testing accurately and reliably.

The distinction between an allegation and an established fact is important.

An indictment is an accusation, not a conviction.

The government’s allegations had to be proved at trial.

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3. Why Wire Fraud Was the Central Federal Offense

One of the most important legal concepts in the Theranos prosecution is wire fraud.

Federal wire-fraud law is codified at 18 U.S.C. § 1343.

The statute prohibits schemes or artifices to defraud, or schemes to obtain money or property through false or fraudulent pretenses, representations, or promises, when interstate or foreign wire communications are used to execute the scheme.

The statute authorizes substantial criminal penalties.

Cornell’s Legal Information Institute explains that federal wire fraud generally requires proof of a scheme to defraud, material misstatements or omissions, and the use of interstate or international wire communications in furtherance of the scheme.

The importance of the wire-fraud statute in modern white-collar prosecutions is considerable.

Business transactions today routinely involve:

• emails;
• electronic transfers;
• telephone communications;
• digital documents;
• electronic presentations;
• interstate banking;
• online communications;
• and other forms of electronic communication.

Consequently, conduct occurring in a corporate environment can fall within federal wire-fraud jurisdiction when the statutory elements are satisfied.

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4. What the Government Had to Prove

The existence of false statements alone does not automatically establish wire fraud.

The prosecution must establish the elements of the offense beyond a reasonable doubt.

In broad terms, the government must establish that the defendant participated in a scheme to defraud and used qualifying interstate or foreign wire communications in furtherance of that scheme, together with the required mental state and other elements established by the governing law.

The precise jury instructions and legal standards used in a particular prosecution are critical.

The Theranos case therefore illustrates an important principle of criminal law:

The question is not simply whether something said by a company was false. The question is whether the government proved the elements of the charged federal offense beyond a reasonable doubt.

That distinction separates criminal fraud from ordinary corporate failure.

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5. Business Failure Is Not Automatically Fraud

This distinction is especially important in startup cases.

Businesses routinely make predictions.

They may claim that:

• a technology will improve;
• a product will become commercially successful;
• costs will decline;
• a market will expand;
• a company will obtain regulatory approval;
• or a new technology will outperform existing products.

Some predictions will turn out to be wrong.

A failed prediction is not necessarily criminal fraud.

The criminal law generally focuses on whether representations were knowingly or intentionally false in circumstances satisfying the statutory elements of the offense.

The Theranos prosecution therefore required the government to distinguish between ordinary entrepreneurial optimism and deliberate deception.

That distinction was central to the case.

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6. The Difference Between a Lie and a Federal Fraud Offense

The word “lie” is commonly used in everyday language.

Federal criminal law requires considerably more precision.

A statement may be:

• inaccurate;
• exaggerated;
• optimistic;
• incomplete;
• misleading;
• materially false;
• or deliberately fraudulent.

Those categories are not automatically interchangeable.

A federal fraud prosecution requires proof satisfying the applicable criminal statute.

The government therefore had to establish more than the proposition that Theranos did not ultimately achieve what it promised.

It had to establish the charged fraudulent conduct and Holmes’s legally required state of mind.

This is one reason why federal fraud trials can involve extensive evidence concerning:

• internal communications;
• financial records;
• laboratory data;
• presentations to investors;
• corporate correspondence;
• testimony from employees;
• business relationships;
• and the defendant’s own statements.

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7. Investors Were Central to Holmes’s Convictions

The jury ultimately found Holmes guilty of investor-related offenses.

On January 3, 2022, after a lengthy federal trial, the jury convicted Holmes of:

• one count of conspiracy to commit wire fraud against investors; and
• three counts of wire fraud against individual investors.

The three substantive wire-fraud counts involved wire transfers totaling more than $140 million.

This is an important distinction from the government’s broader allegations.

Holmes was not convicted on every count charged in the indictment.

The jury acquitted her of the patient-related conspiracy count and three patient-related fraud counts.

The jury also failed to reach unanimous verdicts on three additional investor-fraud counts.

One patient-related wire-fraud count had been dismissed during the trial.

A proper legal analysis of the case must preserve these distinctions.

The final convictions were narrower than the full set of allegations originally presented by the prosecution.

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8. The Patient-Related Allegations

The prosecution also alleged that Holmes and Balwani defrauded doctors and patients concerning Theranos’s testing services.

The government alleged that the defendants promoted Theranos’s ability to provide accurate and reliable testing while knowing of serious limitations in the company’s technology.

These allegations raised a particularly important legal and ethical dimension because laboratory testing can directly affect medical decision-making.

The government presented evidence concerning inaccurate or unreliable test results and the potential consequences for patients. The district court’s sentencing materials and the Ninth Circuit’s later opinions discuss evidence concerning Theranos’s testing technology and its effects.

But again, the legal outcome must be described precisely.

Holmes was acquitted of the patient-related conspiracy charge and three patient-related wire-fraud counts.

Her convictions therefore concerned investor fraud rather than the patient-fraud counts on which she was acquitted.

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9. Holmes and Balwani Were Tried Separately

The Theranos prosecution also provides an instructive example of separate trials involving closely connected defendants.

Holmes and Balwani were initially charged together.

They were ultimately tried separately.

Holmes’s jury returned its verdict in January 2022.

Balwani was tried later, and in July 2022 a separate federal jury convicted him on all counts presented in his case. The government stated that his convictions included investor and patient-related fraud.

The separate trials demonstrate an important principle of criminal procedure:

The fact that two people are accused of participating in the same alleged scheme does not mean that their criminal liability is determined collectively.

Each defendant is entitled to an individual adjudication based on the evidence and law applicable to that defendant.

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10. Conspiracy

One of Holmes’s convictions involved conspiracy to commit wire fraud.

Conspiracy is analytically distinct from the completed substantive fraud offenses.

A conspiracy generally involves an agreement to commit an unlawful objective together with the legally required intent and, where required by the applicable statute, an overt act.

Cornell’s Legal Information Institute describes conspiracy as an agreement between two or more people to commit an illegal act, combined with the required intent to accomplish the objective; the precise requirements depend upon the governing statute.

Federal conspiracy law can therefore impose liability based upon participation in an unlawful agreement even though conspiracy is conceptually distinct from each substantive offense committed in furtherance of the agreement.

In the Theranos case, the government alleged that Holmes and Balwani conspired to defraud investors and patients.

The jury convicted Holmes of the investor-related conspiracy but acquitted her of the patient-related conspiracy.

That distinction again demonstrates why criminal cases must be analyzed count by count.

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11. The Role of Intent

Fraud prosecutions frequently turn on state of mind.

A company can be wrong.

A business leader can make an incorrect prediction.

A technology can fail.

But criminal fraud generally requires proof of a legally sufficient fraudulent intent.

The government’s case therefore involved evidence designed to show what Holmes knew, what she represented, and how those representations related to the company’s actual technology and business circumstances.

This is why internal corporate evidence can become so important in white-collar prosecutions.

Relevant evidence can include:

• emails;
• laboratory reports;
• internal presentations;
• communications between executives;
• board materials;
• investor presentations;
• financial documents;
• regulatory communications;
• and testimony from employees.

The prosecution’s task is to connect that evidence to the elements of the charged offenses.

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12. Corporate Secrecy and Trade Secrets

Theranos operated with substantial secrecy concerning its technology.

Corporate secrecy is not inherently unlawful.

Companies routinely protect:

• trade secrets;
• intellectual property;
• proprietary algorithms;
• confidential business plans;
• research;
• and commercially sensitive information.

The legal problem arises when confidentiality is used in circumstances where the law requires truthful disclosure or when false representations are made to obtain money or property.

The Theranos case therefore illustrates an important boundary:

Trade-secret protection does not create a license to make fraudulent representations.

At the same time, the mere existence of secrecy is not proof of fraud.

The legal question concerns what the defendant represented, what the defendant knew, what the defendant intended, and whether the statutory elements were established.

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13. The Investor Presentations

Evidence concerning communications with investors became central to the prosecution.

According to the government’s account, Holmes represented to investors that Theranos’s technology had capabilities and validation that it did not actually possess.

The government also presented evidence concerning representations about relationships with major pharmaceutical companies and the company’s plans for expanding testing services through Walgreens.

The Department of Justice stated that evidence at trial showed Holmes represented that Theranos had been comprehensively validated by major pharmaceutical companies and used materials that allegedly created misleading impressions about pharmaceutical-company support.

These allegations illustrate why investor communications can become important evidence in a federal fraud prosecution.

An investor presentation is not merely a marketing document when it is used to obtain substantial investments.

Statements in such materials can become relevant evidence if prosecutors allege that they formed part of a fraudulent scheme.

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14. The Walgreens Relationship

Theranos entered into a highly publicized relationship with Walgreens.

The company’s plans for placing its testing services in Walgreens locations became part of its public commercial narrative.

The prosecution presented evidence concerning representations made to investors about the Walgreens relationship and the company’s anticipated expansion.

The government stated that evidence showed Holmes represented that Theranos would soon substantially increase the number of Wellness Centers inside Walgreens locations even though the rollout had encountered significant problems.

The legal significance of this evidence was not simply that the expansion failed.

The prosecution used such evidence to establish its broader theory concerning the alleged scheme to defraud investors.

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15. The Role of Electronic Communications

The Theranos case also demonstrates why wire fraud is particularly important in modern corporate crime.

Corporate fraud can leave an enormous electronic record.

A company’s executives may communicate through:

• email;
• text messages;
• electronic presentations;
• digital financial transfers;
• telephone calls;
• investor communications;
• and other electronic systems.

When qualifying interstate or foreign communications are used in furtherance of a fraudulent scheme, federal wire-fraud law may become relevant.

Cornell’s explanation of § 1343 emphasizes the statutory importance of interstate or international wire communications.

The modern corporate environment therefore provides investigators with extensive documentary evidence that may later become relevant at trial.

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16. The Federal Investigation

The Theranos investigation involved multiple federal agencies.

The Department of Justice identified the FBI, U.S. Postal Inspection Service, and FDA Office of Criminal Investigations as participating in the investigation.

The involvement of multiple agencies reflects the multidisciplinary nature of the case.

The alleged conduct implicated:

• investment fraud;
• electronic communications;
• healthcare-related activity;
• laboratory testing;
• and federal criminal law.

A complex white-collar investigation can therefore involve agencies with different statutory responsibilities.

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17. The Trial

Holmes’s federal trial lasted approximately four months.

The jury heard evidence concerning:

• Theranos’s technology;
• the company’s internal operations;
• investor communications;
• representations about the technology;
• financial transactions;
• relationships with commercial partners;
• and the conduct of Holmes and other executives.

The trial also involved extensive testimony from former Theranos employees and other witnesses.

The jury ultimately returned a mixed verdict.

That mixed verdict is legally significant.

A defendant can be convicted on some counts and acquitted on others arising from substantially overlapping factual circumstances.

The jury’s role is to determine whether the government has proved each charged offense beyond a reasonable doubt.

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18. Why the Mixed Verdict Matters

Public discussions of the Theranos case sometimes describe Holmes simply as having been “convicted of fraud.”

That description is broadly understandable but legally incomplete.

The actual verdict was more precise.

Holmes was convicted of:

• one investor-related conspiracy count; and
• three investor-related wire-fraud counts.

She was acquitted of:

• the patient-related conspiracy count; and
• three patient-related wire-fraud counts.

The jury did not reach unanimous verdicts on three additional investor-related counts, and one patient-related count was dismissed during trial.

This distinction matters because criminal liability attaches to the counts on which a jury returns a conviction—not simply to every allegation contained in an indictment.

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19. Sentencing

On November 18, 2022, U.S. District Judge Edward J. Davila sentenced Holmes to 135 months in federal prison, or 11 years and three months.

She also received three years of supervised release.

No fine was imposed, and the court addressed restitution separately.

Federal sentencing involves more than simply applying a single statutory maximum.

Federal judges consider the applicable statutory provisions and the Federal Sentencing Guidelines, which are advisory rather than mandatory.

Cornell’s Legal Information Institute explains that the Federal Sentencing Guidelines provide a framework for sentencing but are advisory following United States v. Booker.

Sentencing therefore represents a separate phase of the criminal proceeding from the determination of guilt.

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20. Restitution

Restitution is distinct from imprisonment.

A criminal court may order a convicted defendant to compensate victims for qualifying losses under applicable federal law.

In the Theranos litigation, restitution became a significant issue.

The Ninth Circuit’s 2025 decision ultimately affirmed the district court’s $452 million restitution order concerning Holmes and Balwani.

Restitution should not be confused with a civil damages award.

A civil judgment arises from a civil cause of action.

Criminal restitution arises from the criminal proceeding and is governed by the applicable federal statutes and judicial decisions.

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21. The Appeal

After conviction and sentencing, Holmes appealed.

Her appeal raised numerous issues concerning the conduct of the trial and sentencing.

The Ninth Circuit considered, among other matters:

• evidentiary rulings;
• testimony from former Theranos employees;
• the treatment of expert and lay testimony;
• evidentiary challenges;
• sentencing;
• and restitution.

In its 2025 amended opinion, the Ninth Circuit affirmed Holmes’s conviction and sentence and affirmed the $452 million restitution order.

The appellate court also considered arguments concerning whether certain former employees had improperly provided expert testimony without being treated as experts under Federal Rule of Evidence 702.

The court concluded that some portions of the challenged testimony entered expert territory but held that any resulting error was harmless under the circumstances.

This part of the case is especially valuable for understanding how appellate courts review evidentiary errors.

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22. Expert Testimony and Federal Rule of Evidence 702

The Ninth Circuit’s treatment of witness testimony provides an important evidence-law lesson.

A witness who personally worked within a company may possess specialized knowledge.

But that does not automatically mean that every opinion the witness offers is admissible as ordinary lay testimony.

Federal Rule of Evidence 702 governs expert testimony.

The Ninth Circuit explained that a party cannot evade Rule 702 merely by labeling a witness a “percipient” or fact witness when the testimony actually depends upon specialized knowledge, training, or experience of the type contemplated by the rule.

At the same time, the court emphasized that testimony concerning scientific matters does not automatically become expert testimony simply because the subject matter is technical.

The classification depends upon the nature and basis of the particular testimony.

This makes the Theranos appeal useful well beyond the fraud itself.

It provides a concrete illustration of the boundary between lay opinion and expert testimony.

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23. The Difference Between Trial and Appellate Review

The Theranos case also illustrates the different functions of trial and appellate courts.

The trial jury evaluates the evidence and determines whether the government has proved the charged offenses beyond a reasonable doubt.

An appellate court does not ordinarily conduct a completely new trial.

Instead, it reviews claimed legal or procedural errors under applicable standards of appellate review.

The Ninth Circuit therefore considered whether the district court had made reversible errors.

Its conclusion that certain evidentiary errors were harmless illustrates a fundamental appellate principle:

Not every trial error requires reversal of a conviction.

An appellate court may determine that an error occurred but that the error did not affect the defendant’s substantial rights sufficiently to warrant a new trial.

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24. Holmes’s Conviction Was About Investors, Not a General Verdict on Theranos

One of the most important points for a legally accurate account is that Holmes’s criminal conviction should not be described as a judicial declaration that every representation made by Theranos was fraudulent.

The jury returned verdicts on particular criminal counts.

The convictions concerned investor-related conspiracy and wire-fraud counts.

Other charges resulted in acquittals or unresolved counts.

The criminal judgment therefore has a defined legal scope.

This distinction is essential in any serious discussion of criminal cases.

A defendant can be legally responsible for specific offenses without every allegation made by the prosecution becoming an established fact.

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25. Why the Theranos Case Is a White-Collar Crime Case

The case is commonly studied as an example of white-collar crime.

White-collar crime generally refers to financially motivated or economically oriented criminal conduct committed in business or professional contexts.

Cornell’s Legal Information Institute identifies fraud and related economic offenses among the traditional subjects of white-collar criminal law.

The Theranos prosecution demonstrates several recurring characteristics of white-collar cases:

• complex corporate structures;
• sophisticated financial transactions;
• large quantities of documentary evidence;
• electronic communications;
• technical subject matter;
• multiple witnesses;
• extensive investigations;
• specialized federal statutes;
• and difficult questions concerning intent.

White-collar criminal cases can therefore be substantially more complex than the simple concept of “someone lied to someone else.”

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26. Why Startup Culture Does Not Change the Criminal Law

The Theranos case also raises a broader legal question concerning entrepreneurial culture.

Startups often depend upon ambitious claims about future products and markets.

Entrepreneurs frequently describe what a company intends to achieve before the technology is commercially mature.

That does not by itself constitute criminal conduct.

Federal criminal law does not prohibit entrepreneurship, ambitious business plans, failed technology, or unsuccessful companies.

The legal boundary is crossed when the government can prove conduct satisfying the elements of a criminal offense.

In a fraud case, that means the prosecution must establish the required fraudulent scheme, representations, intent, use of qualifying communications, and other statutory elements.

The Theranos case therefore should not be reduced to the proposition that “a startup failed and its founder went to prison.”

The legal case concerned fraud proven beyond a reasonable doubt, not business failure itself.

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27. Corporate Governance and Fiduciary Questions

The Theranos story also raises important corporate-governance questions, although those questions are distinct from the criminal charges.

Corporate directors and officers can owe fiduciary duties to corporations under applicable state law.

Those duties can involve:

• care;
• loyalty;
• conflicts of interest;
• oversight;
• disclosure;
• and other governance obligations.

The existence of poor corporate governance, however, is not automatically equivalent to federal criminal fraud.

This distinction is important because a single corporate event can potentially generate several different types of legal proceedings:

• criminal prosecution;
• civil securities litigation;
• regulatory enforcement;
• shareholder litigation;
• fiduciary-duty claims;
• employment disputes;
• and contractual litigation.

Each proceeding has its own legal standards.

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28. Criminal Fraud Versus Securities Fraud

Another useful distinction concerns the different legal regimes that may apply to fraudulent conduct involving investors.

Federal law contains multiple fraud statutes.

Wire fraud under 18 U.S.C. § 1343 is one federal offense.

Federal securities laws also contain separate provisions governing securities fraud.

The Theranos criminal prosecution relied on wire-fraud statutes rather than requiring the government to prove a securities-fraud charge under a particular securities statute.

This illustrates a broader principle:

The same underlying business conduct can potentially implicate multiple areas of law, but each cause of action or criminal offense has its own elements.

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29. The Importance of Materiality

Fraud cases frequently involve the concept of materiality.

Not every inaccurate statement is legally significant.

A statement may become material when it has a meaningful relationship to the decision the victim is being asked to make.

In an investor-fraud case, the significance of a representation may depend upon whether the information could affect an investor’s decision to provide money or continue investing.

The government’s case against Holmes included evidence concerning representations about Theranos’s technology, commercial relationships, and business prospects.

The legal significance of those representations had to be evaluated within the elements of the charged offenses.

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30. The Role of Evidence

The Theranos prosecution also demonstrates why evidence is central to criminal litigation.

The government’s case involved evidence concerning:

• laboratory testing;
• corporate communications;
• investor presentations;
• financial transactions;
• internal company information;
• employee testimony;
• commercial relationships;
• and Holmes’s own statements.

The defense was entitled to challenge that evidence.

A criminal conviction cannot rest simply upon public opinion about a company.

It must rest upon evidence admitted under the governing rules and a jury’s determination that the prosecution proved the charged offenses beyond a reasonable doubt.

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31. The Presumption of Innocence

The legal system begins from the presumption that a criminal defendant is innocent unless and until proven guilty.

This principle is particularly important in high-profile cases.

Media reports, investigative journalism, regulatory actions, public criticism, and corporate collapse may all occur before a criminal trial.

None of those events replaces the criminal trial.

The government’s allegations in an indictment are not themselves proof.

In Holmes’s case, the jury considered the evidence presented at trial and returned a mixed verdict, convicting her on four investor-related counts while acquitting her on several patient-related charges and failing to reach unanimous verdicts on three additional investor-related counts.

That result demonstrates the importance of keeping allegations, evidence, verdicts, and appellate conclusions conceptually separate.

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32. The Broader Legal Lessons of the Case

The Theranos prosecution offers several important lessons for the study of American law.

First: Corporate fraud can become federal criminal conduct.

A company operating in a private commercial market can become the subject of federal criminal prosecution when its conduct satisfies federal criminal statutes.

Second: Business failure is not itself a crime.

A failed product or unsuccessful company is not automatically fraudulent.

Third: Intent matters.

Fraud prosecutions often require extensive evidence concerning what a defendant knew and intended.

Fourth: Electronic communications can become criminal evidence.

Modern business communications can provide the factual foundation for federal wire-fraud charges.

Fifth: Criminal liability is count-specific.

A defendant may be convicted on some counts and acquitted on others.

Sixth: Criminal trials and civil litigation are different.

The same corporate events may generate different legal proceedings with different standards and remedies.

Seventh: Appeals focus on legal error.

An appellate court does not simply reconsider the case as though the trial never occurred.

It applies established standards of appellate review.

Eighth: Sentencing is a separate stage.

A conviction establishes criminal liability; sentencing determines the consequences within the governing legal framework.

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33. The Final Legal Status of Elizabeth Holmes

As of the Ninth Circuit’s amended December 22, 2025 decision, Holmes’s convictions and sentence had been affirmed on appeal.

The Ninth Circuit also affirmed the restitution order associated with the Theranos fraud case.

Thus, the case should not be presented as though Holmes’s criminal conviction remains unresolved merely because the original district-court proceedings occurred several years ago.

The case moved through:

Investigation

↓

Federal indictment

↓

Trial

↓

Jury verdict

↓

Sentencing

↓

Appeal

↓

Ninth Circuit affirmance

That progression makes the case an excellent practical example of the life cycle of a federal white-collar criminal prosecution.

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34. The Case in Procedural Perspective

The Theranos prosecution can also be understood as a practical example of federal criminal procedure.

The case involved:

• a federal grand jury;
• an indictment;
• pretrial litigation;
• extensive discovery and evidentiary disputes;
• a federal jury trial;
• verdicts on multiple counts;
• sentencing;
• restitution;
• and appellate review.

It therefore connects several major subjects in federal criminal law and procedure.

The case also demonstrates why procedural law cannot be separated entirely from substantive criminal law.

The prosecution needed both:

A substantive federal offense

and

a legally valid procedure through which the government could prove that offense.

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35. What the Theranos Case Does Not Establish

Several conclusions should not be drawn from the case.

The case does not establish that:

• every failed startup is fraudulent;
• every inaccurate corporate prediction is criminal;
• every technology company must disclose every internal problem;
• corporate secrecy is inherently unlawful;
• every corporate governance failure is a federal crime;
• or every representation that later proves incorrect constitutes wire fraud.

The criminal judgment is limited to the offenses for which Holmes was convicted.

This limitation is an important part of responsible legal analysis.

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Key Takeaways

• United States v. Elizabeth A. Holmes arose from the federal prosecution of the Theranos founder for investor- and patient-related fraud allegations.
• The operative prosecution included conspiracy to commit wire fraud and substantive wire-fraud charges.
• Federal wire fraud is prosecuted under 18 U.S.C. § 1343.
• The government alleged that Holmes and Balwani misrepresented the capabilities and performance of Theranos’s blood-testing technology.
• Holmes was convicted of one investor-related conspiracy count and three investor-related wire-fraud counts.
• She was acquitted of the patient-related conspiracy count and three patient-related fraud counts.
• The jury did not reach unanimous verdicts on three additional investor-related counts.
• Holmes was sentenced in November 2022 to 135 months in federal prison, followed by three years of supervised release.
• The prosecution was investigated by the FBI, U.S. Postal Inspection Service, and FDA Office of Criminal Investigations.
• Holmes’s appeal raised issues involving evidence, witness testimony, sentencing, and restitution.
• In its amended December 2025 opinion, the Ninth Circuit affirmed Holmes’s conviction, sentence, and the $452 million restitution order.
• The case demonstrates the distinction between business failure and criminal fraud.
• It also illustrates the importance of intent, material representations, electronic communications, conspiracy, evidentiary rules, sentencing, and appellate review.

Frequently Asked Questions

What was Elizabeth Holmes convicted of?

Holmes was convicted of one count of conspiracy to commit wire fraud against Theranos investors and three counts of wire fraud against individual investors.

Was Elizabeth Holmes convicted of defrauding patients?

No. Holmes was acquitted of the patient-related conspiracy count and three patient-related wire-fraud counts. One additional patient-related wire-fraud count was dismissed during the trial.

What is wire fraud?

Wire fraud is a federal offense involving a scheme to defraud or obtain money or property through false or fraudulent representations using qualifying interstate or foreign wire communications. It is codified at 18 U.S.C. § 1343.

What is conspiracy to commit wire fraud?

Conspiracy is a separate criminal offense involving an agreement to accomplish an unlawful objective together with the elements required by the applicable conspiracy statute. In the Theranos case, Holmes was convicted of conspiracy relating to the investor-fraud scheme.

Was Theranos’s failure itself a crime?

No. Business failure, unsuccessful technology, or inaccurate predictions do not automatically constitute criminal fraud. The prosecution had to establish the elements of the charged federal offenses beyond a reasonable doubt.

How long was Elizabeth Holmes sentenced to prison?

Holmes was sentenced to 135 months, or 11 years and three months, in federal prison. She also received three years of supervised release.

Was Elizabeth Holmes’s conviction overturned?

No. The Ninth Circuit affirmed her conviction and sentence in its amended December 2025 opinion.

Was restitution ordered?

Yes. The Ninth Circuit’s 2025 decision affirmed a $452 million restitution order in the Theranos case.

Was Sunny Balwani prosecuted separately?

Yes. Balwani was tried separately from Holmes. A separate jury convicted him on all counts presented in his trial, and he was later sentenced to 155 months in federal prison.

Why was the case prosecuted under federal law?

The prosecution relied principally on federal wire-fraud and conspiracy statutes. The use of qualifying interstate communications in the alleged schemes provided an important federal-law basis for the wire-fraud charges.

What did the Ninth Circuit say about expert testimony?

The Ninth Circuit held that parties cannot avoid the requirements of Federal Rule of Evidence 702 simply by labeling a witness a lay or “percipient” witness when the testimony depends upon specialized knowledge contemplated by the rule. The court nevertheless concluded that any error concerning the challenged testimony was harmless.

Why is the Theranos case important for studying criminal law?

The case brings together several important areas of federal criminal law: wire fraud, conspiracy, criminal intent, material misrepresentations, electronic evidence, white-collar crime, evidentiary rules, sentencing, restitution, and appellate review.

Conclusion

The Theranos case is much more than the story of a failed Silicon Valley startup.

From a legal perspective, it is a detailed example of how the federal criminal justice system approaches alleged deception in a sophisticated corporate environment.

The central issue was not simply whether Theranos’s technology worked as promised.

The prosecution had to establish that particular representations and conduct formed part of legally prohibited schemes to defraud and that Holmes possessed the criminal intent required by the charged offenses.

The jury ultimately convicted Holmes on four investor-related counts but acquitted her of several patient-related charges and did not reach unanimous verdicts on three additional investor counts.

The district court subsequently imposed an 11-year-and-three-month prison sentence, and the Ninth Circuit later affirmed the conviction, sentence, and restitution order.

The case therefore illustrates several enduring principles of American criminal law.

A failed business is not necessarily a criminal enterprise. A false statement is not automatically federal fraud. An indictment is not a conviction. A conviction applies only to the offenses established at trial. And an appellate court reviews a criminal judgment according to established standards rather than simply retrying the factual dispute.

The Theranos prosecution demonstrates how those principles operate when ambitious technological claims, investor communications, corporate secrecy, electronic evidence, and federal fraud law converge in a single case.

For students of American law, it is consequently an unusually useful case study in the boundary between entrepreneurship, corporate representation, regulatory compliance, and federal criminal liability.