SAN JOSE, California – With her black turtlenecks and wide-eyed, Elizabeth Holmes has for years embodied in a cartoonish way the image of the founder of Silicon Valley whose great ideas could change the world. But following the spectacular and public breakup of her blood test company Theranos, lawyers in Holmes’ federal fraud trial on Wednesday attempted to tell a different story: Was she really a liar and a traitor, hunting for money and fame? Or just a woman who has committed and failed?
Lawyers from the Department of Justice and Holmes’ defense attorneys presented those two images in their opening statements to a jury of five women and seven men. Over the next few months, they will listen to testimonies from former Theranos employees, investors, patients and others to determine whether Holmes, the former Theranos CEO who was once hailed as the next Steve Jobs, intentionally cheated and lied to investors and patients on the capabilities of his company’s blood testing technology.
“This is a case of fraud, of lying and cheating to get money,” US Assistant Attorney Robert Leach told the jury.
Holmes, 37, is charged with 10 counts of computer fraud and two counts of conspiracy to commit computer fraud. Each count carries a maximum penalty of up to 20 years in prison if convicted.
Prosecutors claim that Holmes conspired with her ex-boyfriend Ramesh “Sunny” Balwani, who was president and chief operating officer of Theranos, to carry out the plan. The couple knew that the company’s blood tests were producing unreliable results, but they still sold them, prosecutors said, and then committed computer fraud by electronically sending those results to patients and doctors across state lines. Balwani is facing the same series of allegations as Holmes and will go to a separate trial next year.
In the defense statement, Holmes’ attorney Lance Wade portrayed the former CEO as a businessman who “worked to the bone” for years to achieve a noble and useful goal: to make lab tests cheaper. and more accessible. She failed, but that doesn’t make her a criminal, Wade said.
“Now, in the end, Theranos has failed. And Mrs. Holmes left with nothing, “Wade said.” But failure is not a crime. “
Holmes had tried to revolutionize medicine with Theranos’s proprietary machine, which he claimed could run hundreds of tests on a few drops of blood. The company’s device was allegedly faster, cheaper, and more accurate than all other blood testing lab equipment on the market, and could revolutionize medicine by bringing critical diagnostics to pharmacies, homes, and even battlefields. . But as a 2015 Wall Street Journal investigation revealed, in reality, the machine could only perform a small number of tests, and its results were filled with inaccuracies. Instead, Theranos used commercially available machines to perform most of its tests, diluting blood droplets to increase volume for some tests and using much larger samples taken from patients’ arms for others.
“The evidence will show that the defendant told her investors that she had developed a miniature blood analyzer that could run virtually any test. He couldn’t, “Leach said.” He’s never done more than 12 tests in the clinical lab, and he’s done them badly. “
Court documents showed that Holmes could accuse Balwani of mentally and sexually abusing her, thus clouding her judgment during the time she allegedly committed fraud. On Wednesday, Wade did not make these allegations directly, but instead told the jury that Holmes made a mistake in trusting and relying on Balwani, who was nearly 20 years her senior, as her “chief adviser.”
“Mr. Balwani encouraged her to drop out of school and pursue her idea,” Wade said. “And you will feel that he has also developed a personal relationship with her. In this case, you will learn that some aspects of that relationship had a great impact on Mrs. Holmes. “
Wade added that Holmes has moved on and now lives with her partner, hotel heir Billy Evans, and their new baby in the Bay Area. And while witnesses can testify about their knowledge of his previous relationship with Balwani, “there was another aspect that most people have never seen,” he said.
Yet when things got tough, Holmes lied over and over, prosecutors said. Leach described how in multiple places when the company was in need of money, Holmes made a number of misrepresentations about a number of issues, including the company’s technology capabilities, their work with military and pharmaceutical giants, and the accuracy of their test results. He claimed this was to get investors to take their checkbooks.
“Timeless and without money, Elizabeth Holmes has decided to lie,” Leach said.
But Wade said Holmes “didn’t go to work every day with the intention of lying, cheating and stealing,” and pointed out that while his shares in the company were worth billions at one point, he never cashed.
“She was all-in on Theranos,” she said, adding that she was “motivated by her mission, not money.”
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