Elizabeth Holmes pointed fingers at others and said she was a believer
San Jose, Calif. -Using charisma, chivalry and scientific jargon, Elizabeth Holmes persuaded investors to commit nearly $1 billion to build her blood testing start-up Theranos. It all came crashing down in 2018, when major problems emerged with the company’s technology and business deals.
On Tuesday, Ms. Holmes used the same techniques to try to convince a jury that she was not guilty of fraud.
Taking a stand in her defense on the third day, Ms Holmes made her most important arguments to refute the 11 counts of fraud for which prosecutors charged her. She made eye contact with the jurors and tilted her head to one side making the case that she could not intentionally deceive anyone about Theranos’ technology.
Ms. Holmes, 37, alternated between giving authoritative descriptions of Theranos’ scientific research and presenting herself as a naive and ambitious founder who believed her company’s technology worked. He tried to redefine past events as misunderstandings about his intentions. He implied that his board of directors should have advised him better. He suggested that he had great faith in the doctors, scientists and engineers working at Theranos.
And he portrayed himself as an entrepreneur who cared deeply – perhaps too much – about protecting his company’s brand and financial future, that he made decisions that were later denied by prosecutors. was skewed as fraud.
Throughout the day of testimony, the defense aimed to create doubts in the minds of jurors about the prosecution’s case: that Ms. Holmes had deliberately claimed Theranos could revolutionize health care, even though she knew That the technology of the start-up was lacking. White-collar criminal cases are often highly technical and complex and prosecutors face the burden of proving that the defendant’s intent was to commit fraud.
“The whole ballgame comes down to knowledge and intent, and that’s the hardest thing for prosecutors to prove,” said Andrey Spector, attorney for Brian Cave Leighton Pasner and a former federal prosecutor in the Eastern District of New York.
The government’s best evidence of Ms. Holmes’ intent is circumstantial, coming from documents and the testimony of others, Mr. Spector said. But Ms. Holmes could testify directly about what she knew and wanted, he said.
Ms. Holmes’s high-profile test stands as a cautionary tale for Silicon Valley start-ups, which often embrace the same hustle, ambition and change-the-world idealism that has propelled them into the top echelons of the industry. Go. Despite the tech industry’s reliance on hype, some executives have been accused of lying to investors, making Theranos an outsider.
But as tech start-ups continue to raise record-breaking cash, some standard practices of governance and diligence have gone out the window, investors and entrepreneurs have said. If Ms. Holmes is convicted and sent to prison, the verdict could hit good times, prompting a renewed sense of caution among freewheeling founders.
On Tuesday, Ms. Holmes began a hard day testifying at 9 a.m. and remained on the stands all day. She repeatedly hammered home a main topic of defense: She believed Theranos’ technology was working. Jury members were shown emails from various scientists and doctors describing successful studies, trials, and other successes in the company’s lab.
Stanford University professor Channing Robertson, who joined Theranos’ board, told them his ideas were “very promising”, Ms Holmes testified. An email from Theranos chief scientist Ian Gibbons to Ms. Holmes about Theranos’ tests read: “Our immunoassays match the best that can be done in clinical laboratories.”
In a concession to one of the prosecution’s biggest evidence, Ms Holmes admitted that she had personally added drug companies’ logos to Theranos’ verification reports without her permission. Those reports documented studies of Theranos’ blood tests conducted in partnership with drug companies and helped convince investors and partners that the start-up was the real deal.
Representatives for drugmakers Pfizer and Schering-Plough said earlier in the trial that their companies had not written or approved the report. But Ms. Holmes sent reports with Pfizer’s logo as part of her pitch to investors and partners like Walgreens to invest in and trade Theranos.
Ms Holmes said on Tuesday that she only added the logo to the report to show that the work she described was done in partnership with pharmaceutical companies. He said that he did not intend to mislead investors.
“I’ve heard that testimony in this case and I wish I had done it differently,” she said.
Responding to testimony from lab workers, who said she gave up in despair over Theranos’ shoddy science, Ms. Holmes said she never forced anyone to sign anything they didn’t agree to. She said she would not have allowed Theranos to run any tests approved by the laboratory director, adding that she was not qualified to make such a decision.
It also dismissed one of prosecutors’ biggest claims: that Theranos was secretly doing most of its blood tests on commercially available machines from companies like Siemens, not its own. Theranos promoted its tiny blood analyzers, known as Edison and MiniLabs, as capable of running hundreds of different tests on a single drop of blood. But in reality, it could only do a dozen tests and modified Siemens machines to run tests with small amounts of blood.
Ms Holmes said she never told investors, partners, the public or her own board members that the company was conducting most of its tests on Siemens devices because Theranos made modifications to those machines. She said she worries Siemens or other competitors will copy those changes.
“It was an invention that we understood from our lawyer that we had to protect it as a trade secret,” she said.
Ms. Holmes ignored her relationship with Ramesh Balwani, her boyfriend for more than a decade, Theranos’ chief operating officer. The pair were charged together but their cases were separated last year. Mr Balwani, who goes by “Sunny”, will be tried next year. Both have pleaded not guilty.
The pair kept their relationship a secret, but Ms. Holmes’s lawyers said in the filing that they expected her to testify that Mr. Balwani, who is 18 years older than Ms. Holmes, experienced emotional and emotional turmoil during their relationship. physically abused. They have also said that they hope to call Mindy Mechanic, an expert witness focused on abusive relationships, to explain Ms. Holmes’ allegations.
Mr. Balwani’s role in the alleged fraud has been discussed almost every day after the trial, but he was only mentioned in Ms. Holmes’ testimony when necessary, such as describing an email thread used as evidence.
At the start of the trial, Judge Edward Davila of the US District Court for the Northern District of California, who is overseeing the case, instructed jurors not to speculate as to why Mr. Balwani was not present.
Ms. Holmes’ testimony will continue next week.
Erin Wu Contributed to reporting.
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