In a strong signal that Theranos founder Elizabeth Holmes will seek to indict her co-accused and former lover Sunny Balwani of alleged fraud with her failed startup Theranos, the defense team asked a judge in their court to let them make statements Balwani had previously made to the jury.
In a petition filed this week, Holmes’ lawyers said they tried to call Balwani – the former president of Theranos, who she claimed in court documents to coerce, control and abuse her in ways that would affect the question of guilt – to testify against court. but his lawyer said that if called, he would apply the Fifth Amendment, refusing to testify to protect himself from self-incrimination. Balwani’s lawyer did not immediately respond to a request for comment.
In lieu of Balwani’s testimony, Holmes’ lawyers are seeking to present three testimonies that Balwani gave to the US Securities and Exchange Commission, which the petition claims will illustrate details about Balwani’s “management of certain aspects of Theranos operations,” including laboratory oversight and relationship with Walgreens pharmacy chain and the Safeway grocery chain; and the Theranos financial model.
This petition is the clearest indication that Holmes’s legal team plans to adhere to the line of defense set out in the pre-trial court documents: that she was in an “abusive intimate partner relationship” with Balwani, in which he provided psychological and emotional support. control over her. Although Holmes appeared as a witness for three days to testify in her defense, prosecutors have yet to raise the issue of her relationship with former president Theranos.
Pretrial court documents claimed that “the pattern of abuse and coercive control continued … during the conspiracy charge,” and referred to alleged sexual abuse by Balwani, as well as claims that he disparaged Holmes “deprived of love if she displeased him ”and controlled what she ate, how she dressed, how much money she spent and with whom she communicated,“ erasing her ability ”to make decisions. The documents also claim that Balwani controlled Holmes’ movements, calls, text messages and e-mail; committed “physical violence”, for example, by throwing hard, sharp objects at her; and limited her sleep.
Pretrial documents said the defense planned to provide testimony from the relationship abuse psychologist who examined Holmes and cited “potentially debilitating” symptoms of PTSD that Holmes suffers as a result of the relationship.
Both Holmes and Balwani are accused of fraud in connection with the company Theranos, which Holmes founded in 2003 after dropping out of his studies at Stanford University. The government claims that “many hundreds” of patients have been duped by a Palo Alto startup and that more than $ 700 million have been ransomed from investors. Holmes and Balwani denied the charges.
Balwani’s name was often mentioned in the Holmes criminal trial. Prosecutors say both she and Balwani knew that Theranos blood test technology was unreliable, inaccurate and could only perform a limited number of tests, despite their public claims that the company’s machines could perform a full range of tests on just a few drops of blood. from the finger.
The petitioners also entered text messages between Holmes and Balwani in 2015, in which she referred to him as “My water. And the ocean “, saying:” Madly in love with you and your strength. “
The documents that Holmes’ lawyers are now trying to present in court are three affidavits. Balwani did this to the SEC in August and September 2017. In the statements, Balwani appears to be taking responsibility for key areas of Theranos’ operations central to the fraud case, and suggests Holmes may have had limited knowledge of these areas.
In the applications filed with the petition, Balwani assumes responsibility for managing Theranos laboratory operations, as well as assuming a “leadership role” in Theranos’s failed partnerships with Walgreens and Safeway, and building a “financial model” for Theranos – although he distinguished between this model and revenue projections , one set of which the jury heard fell short of their hundreds of millions of dollar goals.
In one of the statements, Balwani claims that Holmes knew he had created the financial model for Theranos, but while she was “generally familiar” with the information he used to do this, she may not have known about most or all of it. On the issue of “protocol zero” for a demonstration of the company’s blood testing machine, which the jury heard may be hiding flaws in the company’s testing technology, Balwani told the SEC it was a “deep software concept” that he never discussed with Holmes.
Holmes faces a maximum sentence of 20 years in prison and a $ 2.75 million fine if convicted, as well as possible restitution, the Justice Department said.