Elizabeth Holmes, pictured in May 2021, comes in at sixth place.
Nhat V. Meyer / Bay Area News Group via AP
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Nhat V. Meyer / Bay Area News Group via AP
Elizabeth Holmes, pictured in May 2021, comes in at sixth place.
Nhat V. Meyer / Bay Area News Group via AP
SAN JOSE, Calif. – Falling Silicon Valley star Elizabeth Holmes, accused of misleading investors and patients into believing her start-up Theranos had developed a blood-testing device for healthcare rehabilitation healthy, testified Friday in her fraud trial.
The sudden decision to have Holmes testify so soon came like a bomb and carried considerable risk. Federal prosecutors, who settled their months-long case earlier on Friday, have made it clear that they look forward to grilling Holmes under oath.
Prosecutors won’t get that opportunity until Monday at the earliest, when the trial resumes. Prosecutors called 29 witnesses to support their argument that Holmes endangered the lives of patients and misled investors and customers about Theranos’ technology. Among them was General James Mattis, a former US Secretary of Defense and a former Theranos board member.
They also presented internal documents and sometimes vulgar texts between Holmes and her former lover, Sunny Bulwani, who was also the chief executive of Theranos. Through the prosecution’s case, Holmes sat upright in his chair, dispassionate even as one-time supporters testified to their suspicions about Theranos.
The combination of convincing testimony and clear documentary evidence proved effective in persuading Holmes to tell her story in court. Listen Friday as 10 men and four women on the final jury will decide her fate. If convicted, Holmes – now 37 and the mother of a newborn son – could be sentenced to up to 20 years in prison.
Shortly after 3 p.m., Holmes slowly made his way to the stage in front of a crowded courtroom filled with spectators and jurors, all wearing masks. She began her nearly hour-long testimony by recounting her early years as a student at Stanford University and her interest in disease detection, culminating in her decision to drop out at 19 and start a company. later start-up called Theranos.
As the company took shape, so did its vision. Eventually, Theranos developed a device called Edison that could scan hundreds of health problems with just a few drops of blood. Current tests often require a single vial of blood, making it both slow and impractical to run more than a handful of patient tests at once.
Had it worked as promised, Edison could have revolutionized healthcare by making it easy to scan the early signs of illness and other health problems, and cheaper. Instead, the jury heard recording of Holmes bragging to investors about purported breakthroughs that were later proven to be untrue.
Witness testimony and other evidence presented during the trial showed that Holmes misrepresented purported dealings with major pharmaceutical companies such as Pfizer and the US military while concealing matters. repeat with Edison.
But Edison’s affairs did not become public knowledge until The Wall Street Journal first published in a explosive series of articles in October 2015. An audit by the Centers for Medicare and Medicaid Services confirmed those issues the following year.
At the time, Holmes and Balwani had raised hundreds of millions of dollars from billionaire investors such as media mogul Rupert Murdoch and the Walton family of Walmart and made deals with Walgreens and Safeway to conduct business. blood tests at their pharmacies. Those investments had a Theranos valuation at $9 billion, giving Holmes a $4.5 billion fortune – on paper – in 2014.
The evidence presented at the trial also showed that Holmes distributed financial projections calling for privately held Theranos to generate $140 million in revenue in 2014 and $990 million in 2015 and be profitable. A copy of Theranos’ 2015 tax returns presented as part of trial evidence showed that the company had less than $500,000 in revenue that year while reporting an accumulated loss of $585 million.
Ellen Kreitzberg, a Santa Clara University law professor who attended the trial, said she thinks the government has made a strong case.
“There’s nothing flowery or sexy about this testimony,” she said. “The witnesses were very careful in their testimony. None of the witnesses seemed to harbor anger or aversion towards her. And so, they are very powerful witnesses. .”
Other witnesses called by the government include two former directors of the Theranos lab, who repeatedly warned Holmes that blood-testing technology was extremely unreliable. Prosecutors also questioned two part-time lab directors, including Balwani’s dermatologist, who spent just a few hours scrutinizing Theranos’ blood-testing technology throughout late 2014 and much of 2015. As Holmes’ attorney noted, part-time lab directors are allowed by government regulation.
Other key witnesses include former Pfizer employees, former Safeway CEO Steve Burd and numerous Theranos investors, including representatives of Betsy DeVos’ family investment firm, a former secretary of education. under President Donald Trump. The DeVos family invested $100 million.
