Elizabeth Holmes had media buzz, not a business. These are her unaccompanied accomplices

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The conviction of Elizabeth Holmes in four out of 11 counts was a measured verdict from the jury, which spent weeks combing the remains of her epic fall.

As with other high-profile cases in 2021, this jury actually showed our system best in terms of carefully considering and reaching balanced conclusions. The jury saw criminal fraud in Holmes’s handler with investors while rejecting such claims with respect to patients. (The jury also hung on three points).

ELIZABETH HOLMES FOUND GUILTY ON 4 OF 11 APPEALS, THE JURY COULD NOT REACH THE JUDGMENT OVER 3.

SAN JOSE, CA - JANUARY 3: Therano's founder and former CEO Elizabeth Holmes (C) joins her partner Billy Evans (L) and her mother Noel Holmes as they leave the Robert F. Peckham Federal Building on January 3, 2022 in San Jose, California.  A jury found Elizabeth Holmes guilty of three counts of wire fraud and one count of conspiracy to defraud investors.  (Photo by David Odisho / Getty Images)

SAN JOSE, CA – JANUARY 3: Therano’s founder and former CEO Elizabeth Holmes (C) joins her partner Billy Evans (L) and her mother Noel Holmes as they leave the Robert F. Peckham Federal Building on January 3, 2022 in San Jose, California. A jury found Elizabeth Holmes guilty of three counts of wire fraud and one count of conspiracy to defraud investors. (Photo by David Odisho / Getty Images)

The distinction between investors and patients was nuanced but principled. What the jury did not consider were those who helped Holmes create her extensive scam. In many ways, the verdict is an indictment of those in business and the media who helped create the massive fraud that Elizabeth Holmes was.

Holmes was convicted of deceiving investors with false claims that the start-up Theranos company would revolutionize blood tests using a few drops of blood in a so-called “nanotainer”.

The three cases of wire fraud come with a maximum penalty of 20 years, while a conspiracy has a maximum penalty of five years. Often, the courts want the counts running at the same time, so she would look at a 20-year horizon with an expectation of much less as a first-time offender.

However, it is not a given. Holmes was convicted of fraud the size of Bernie Madoff with hundreds of millions lost to investors. Just below those numbers, there were $ 144 million in losses. She has also denied all charges, including at the booth. This may lead the Court to consider a stricter design of the sentencing in the case.

Holmes can expect a long prison term, but she was able to engage in this scam to build a $ 9 billion counterfeit business using equally dishonest business and media cultures.

(Photo by Anda Chu / MediaNews Group / East Bay Times via Getty Images)

The prosecution focused on the fraudulent practices that abound in Silicon Valley, where executives often invoke the rule that in order to be successful, you must “fake it until you succeed.” It is often more than a simple saying to be brave and confident. The idea is that you can get away with fraudulent pitches as long as you spend the money to do well on the court in the end.

Under this logic, big scams are better than small scams. If you get billions invested in your business, it’s hard not to do something worth selling. In addition, burning out on a product is treated as a cost of doing business. Few executives are forced to account for their early pitches when their products flop.

Therano's CEO Elizabeth Holmes speaks on stage at the Glamor Women of the Year Awards, where she will receive an award, in the Manhattan borough of New York on November 9, 2015.

Therano’s CEO Elizabeth Holmes speaks on stage at the Glamor Women of the Year Awards, where she will receive an award, in the Manhattan borough of New York on November 9, 2015.
(REUTERS / Carlo Allegri / File image)

Yet flames get out like Holmes because she never really had a workable concept, let alone a product. The case showed how she and her sub-resident sent blood out to be tested by more conventional means and did not have a working model. What she had was buzz, not a business.

Holmes was the perfect image of the Silicon Valley shtick in her Steve Jobs black collar and child-genius action. This was performance art that followed the kabuki of the valley for the super-rich techno class.

While everyone is focused on Holmes during the trial, they forget that she gathered one who is who of powerful business and political board members who gave credibility to the scam. It included former U.S. Secretary of State George Shultz and Henry Kissinger, and former Secretary of Defense William Perry and James Mattis. They alienated mythology, and Holmes was “Jobs 2.0.” Secretary Perry told The New Yorker in 2014 that Ms. Holmes “has sometimes been called another Steve Jobs, but I think that’s an inadequate comparison. She has a social consciousness that Steve never had. He was a genius; she’s one with a big heart.”

Elizabeth Holmes, founder and CEO of Theranos, cannot operate a laboratory for at least two years under CMS sanctions.

Elizabeth Holmes, founder and CEO of Theranos, cannot operate a laboratory for at least two years under CMS sanctions.
(AP Photo / Jeff Chiu)

Holmes would have been a modest fraudulent company without the help of the media. The image of a young woman running a multi-billion dollar business was “a fact too good to be true.” Holmes was showered with attention from being mentioned by former President Bill Clinton to breathless features on virtually every network and newspaper. With dozens of journalists making puff pieces, virtually no one actually looked into her product or the underlying technological claims.

Holmes knew his audience. She was celebrated as the “new generation” of women in business, the brilliant female successor to Jobs. To question that narrative at all was to risk being accused of sexism. After all, you would have asked Steve Jobs when he was developing Apple?

The answer is yes. Jobs faced great skepticism about the viability of his company. Still, Holmes was one done; she was a proof in itself. She was, after all, a beautiful 19-year-old Stanford dropout who dressed up as Jobs and spoke in soundbites.

Elizabeth Holmes, CEO of Theranos, attends a panel discussion at the Clinton Global Initiative's annual meeting in New York

Elizabeth Holmes, CEO of Theranos, attends a panel discussion at the Clinton Global Initiative’s annual meeting in New York
(Copyright Reuters 2016)

Soon, Holmes was on the front page of Fortune, proclaiming “This CEO is after blood.” Luminous cover features would accompany Forbes and Inc. TV hosts cooed and columnists shouted over the carefully constructed image of a “female Steve Jobs.”

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The Holmes story is all too familiar in the age of advocacy journalism. Coverage is now often about promoting a narrative and achieving social progress. Reporting has been supplanted by the promotion of images and messages. As Stanford Journalism Professor Ted Glasser explained, “journalists must be outspoken and honest advocates of social justice, and that’s hard to do under the constraints of objectivity.” Celebrity journalism has many of the same flaws where images transcend facts. In this case, Holmes was both a cause and a celebrity.

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Holmes knew that the media would remove the limitations of objectivity in favor of her irresistible story. She was the hero that time required, including Time Magazine itself. Time whispered that Holmes was “striking, somewhat ethereal, iron-willed, she’s on the verge of achieving her vision.” The fact that the vision turned out to be fraud is just another inconvenient fact. F. Scott Fitzgerald once said, “show me a hero and I will write a tragedy for you.” Neither Holmes nor her tragedy was entirely self-made. It required a collective effort, and this verdict should have come with a list of unaccompanied conspirators.

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