SAN JOSE, California – During the six days that Elizabeth Holmes, founder of the failed blood test startup Theranos, appeared in a fraud trial, she blamed others, accused her ex-boyfriend of mistreating and controlling her, and rethought her actions as an attempt to benefit her company.
On Tuesday, Ms Holmes ended her defense with categorical denial.
“I don’t think I did that,” she said, when asked if she had minimized the results of a devastating regulatory inspection at Theranos. She then accused her firm’s lawyers of “talking a lot in this meeting.”
The comments completed Ms Holmes’ main piece of evidence, which was considered the rarest of all rarities. Few tech CEOs, let alone female executives, have ever been charged with criminal fraud. Even fewer people come to the defense. The time she spent at the booth, which will likely officially end on Wednesday, was the culmination of a lawsuit that took over the business world and was seen as a parable of Silicon Valley’s falsification culture. overdrive.
Ms Holmes, 37, pleaded not guilty to 11 counts of fraud in connection with allegations she made as chief executive of Theranos, which she founded in 2003. If convicted, she faces up to 20 years in prison.
Her trial is now nearing completion. Either side can call the final witnesses in the coming days, followed by closing arguments and detailed instructions to the jury to discuss the verdict.
“The jury got to know her in six days”, Jeffrey Cohen, assistant professor at Boston College Law School, spoke about Miss Holmes. “If the defense is successful, that could be the deciding factor.”
Throughout most of the hearings, the jury heard witness statements about the details of Ms Holmes’ alleged fraud. Theranos rose to prominence by raising $ 945 million in funding, claiming that its revolutionary machines could perform hundreds of tests using just a tiny drop of blood. The hype made Miss Holmes a regular contributor to the magazine covers that proclaimed her the next Steve Jobs.
But a 2015 publication in The Wall Street Journal highlighted problems with Theranos blood tests, starting a downward spiral of regulatory repression and lawsuits. The company broke up in 2018 and Ms Holmes was charged.
Elizabeth Holmes, the disgraced founder of the blood test startup Theranos, is facing two counts of conspiracy to commit electronic fraud and nine counts of electronic fraud.
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Since her trial began in September, prosecutors have called dozens of witnesses, including former board members, laboratory directors, employees, investors, patients and business partners. They uncovered details of falsified documents, fantastic financial projections, unrealistic promises, and fake demonstrations on Theranos. Witnesses often spent hours engaged in tedious little things about finance, chemistry, technology, and phlebotomy.
In most cases, charges against Ms. Holmes were based on her emails and text messages that directly linked her to the company’s problems. Prosecutors must reassure the jury that Ms Holmes was aware of the problems and did not disclose them to the people who invest in Theranos and the patients who rely on her blood tests to make medical decisions.
In her defense, Mr Holmes’s lawyers tried to show that the witness accounts were more complex than they showed. Lawyers accuse investors that they did not study enough information about Theranos before investing. And they tried to blame laboratory directors for problems with the accuracy of Theranos’ tests.
Despite all this, Miss Holmes sat upright in the chair and looked straight ahead, her face hidden by a mask.
After prosecutors suspended their case last month and before summoning Ms Holmes to the podium, her lawyers provided brief testimony from the head of the biotechnology department, who joined Theranos’ board after it was criticized by the media and regulators. organs.
Ms Holmes then offered many excuses for Theranos’ flaws. She said others have misinterpreted her claims about the capabilities of Theranos technology. She said that until the regulatory inspectorate identified many problems in 2015 and forced Theranos to revoke their tests, she believed the tests worked. She said she was not qualified to run a laboratory and relied on the approval of others.
She also admitted to adding pharmaceutical company logos to a series of reports, which implied that drug manufacturers endorsed Theranos technology when they did not. On this occasion, she expressed regret.
Her direct testimony ended with an exploding revelation that Ramesh Balwani, her ex-boyfriend, business partner and alleged accomplice, had subjected her to emotional and physical abuse. Through tears, she testified that Mr. Balwani controlled every aspect of her life – including her schedule, diet, and performance – and even forced her to have sex with him against her will.
During cross-examination, she suffocated again when prosecutors read her text messages from Mr. Balwani that showed a more tender side of their relationship. Prosecutors identified several more culprits for Mrs. Holmes’ crimes, including regret for how she handled the magazine exposure and Fortune magazine’s positive account of the company, which was later heavily corrected.
Prosecutors this week focused on the discrepancy between what Ms Holmes said in her testimony and what investors said she told them. Numerous partners and investors of Theranos said they believed the company had contracts with the military and used its technology, for example, in medical evacuations and on the battlefields.
One of the prosecutors, Robert Leach, an assistant US attorney, repeatedly asked Ms. Holmes different versions of the same question to prove she had no military contracts. She confirmed that Theranos had no contracts.
To show that Theranos was never paid to work with drug maker GlaxoSmithKline, Leach also repeatedly asked Ms Holmes about no income, asking a question for each year from 2007 to 2014. Mrs. Holmes answered “no” every time.
Miss Holmes resisted many of Mr. Leach’s lines of interrogation, testifying that she did not remember or knew. On some issues, she also tried to challenge the details.
Ms. Holmes’s lawyers questioned her a second time on Tuesday afternoon, making a series of quick statements designed to refute Mr. Leach’s views and reiterate her initial testimony. Once again, Ms Holmes stated that Mr Balwani had created unrealistic financial projections for Theranos and that Theranos scientists had compiled reports on her technology.
Until the regulatory inspectorate identified more serious problems, she said, Theranos lab was “excellent.” Ms Holmes has also repeatedly highlighted her concerns about the disclosure of Theranos trade secrets as an excuse to withhold information from investors and partners, further testifying that she fears the company will lose its competitiveness. Discussing Theranos ‘use of third-party machines would violate Theranos’ own trade secret policy, she said.
Mr Leach tried to rebut this argument, noting that most of Theranos’ investors and partners had signed non-disclosure agreements that Ms Holmes expected them to follow.
He also noted that although Ms Holmes has a patent for some technology, a patent “does not necessarily mean an invention described in patents.” Leach asked her if she had made a pill to measure blood lipids as described in one of Theranos’ patents.
Miss Holmes smiled, leaned over to the microphone and said, “Not yet.”
Erin Wu made reporting.