Elizabeth Holmes returns to the helm on Tuesday.
SAN JOSE, Calif .– During the six days that Elizabeth Holmes, the founder of failed blood testing startup Theranos, testified in her fraud trial, she blamed others, accused a former boyfriend of abusing her and controlled, and reframed his actions as trying to do good for his business.
On Tuesday, Ms Holmes capped her defense with categorical denials.
“I don’t think I did that,” she said in response to a question about whether she downplayed the findings of a devastating regulatory inspection at Theranos. She then criticized the lawyers of her company for having “spoken a lot during this meeting”.
The comments ended Ms Holmes’ main testimony, which has emerged as the rarest of rarities. Few tech executives, let alone a female tech executive, are ever charged with criminal fraud. Even fewer take a stand to defend themselves. His stint on the bar, which is set to officially end on Wednesday, was the culmination of a lawsuit that captivated the business world and was touted as a parable of the culture of forgery until you make it on Silicon Valley. overdrive.
Ms Holmes, 37, has pleaded not guilty to 11 counts of fraud for the allegations she made as the CEO of Theranos, which she founded in 2003. If she is found guilty, she risks up to 20 years in prison.
His trial is now entering its final phase. Each party can call final witnesses over the next few days, followed by oral argument and detailed instructions to jurors for their deliberations on a verdict.
“The jury got to know him for six days”, Jeffrey Cohen, associate professor at Boston College Law School, said of Ms. Holmes. “If the defense is successful, maybe it is the decision that will make the difference.”
For most of the proceedings, the jury heard witnesses testify about the details of Ms Holmes’ alleged fraud. Theranos rose to prominence, raising $ 945 million in funding, claiming its revolutionary machines could perform hundreds of tests using just a tiny drop of blood. The hype made Ms. Holmes a staple on the covers of magazines that hailed her as the next Steve Jobs.
But a 2015 Wall Street Journal article found problems with Theranos’ blood tests, triggering a downward spiral of regulatory crackdown and lawsuits. The company was dissolved in 2018 and Ms Holmes was charged.
Since his trial began in September, prosecutors have called dozens of witnesses, including former board members, lab directors, employees, investors, patients and business partners. They revealed details of forged documents, wacky financial projections, unrealistic promises and bogus protests at Theranos. Witnesses often spent hours on the tedious minutiae of finance, chemistry, technology, and bloodletting.
Much of the case against Ms Holmes has relied on her emails and text messages to tie her directly to the issues at the company. Prosecutors must convince the jury that Ms Holmes was aware of the issues and did not disclose them to people who pay Theranos money and patients who rely on his blood tests to make medical decisions.
In his defense, lawyers for Mr Holmes attempted to show that the witness stories were more complicated than they had suggested. Defense lawyers accuse investors of not doing enough research on Theranos before investing. And they tried to blame the lab directors for problems with the accuracy of Theranos’ tests.
All the while, Mrs Holmes sat upright in her chair and stared straight ahead, her expression obscured by a mask.
After prosecutors finished their case last month and before calling Ms Holmes to the stand, her attorneys presented a brief testimony from a biotech official who joined Theranos’ board after being criticized by the media and regulators.
Ms Holmes then offered a variety of excuses for Theranos’ shortcomings. She said others had misinterpreted her statements about what Theranos’ technology could do. She said that until a 2015 regulatory inspection revealed a host of issues and forced Theranos to cancel her tests, she believed her tests were working. She said she was not qualified to run a lab and relied on statements from others.
She also admitted to adding the logos of drug companies to a series of reports, implying that the drugmakers had approved Theranos’ technology when they had not. For this, she expressed regret.
Her direct testimony ended with an explosive revelation that Ramesh Balwani, her ex-boyfriend, alleged business partner and co-conspirator, had assaulted her emotionally and physically. Crying, she testified that Mr. Balwani had controlled all aspects of her life – including her schedule, diet and presentation – and even forced her to have sex with him against her will.
In cross-examination, she choked again when prosecutors made her read text messages with Mr. Balwani that showed a more loving side to their relationship. Prosecutors got several more mea culpas from Ms Holmes, including regrets about how she handled the Journal exposed and a story of positive Fortune coverage of the company which was subsequently heavily corrected.
This week, prosecutors looked into the discrepancies between what Ms Holmes said in her testimony and what investors said she told them. Many Theranos partners and investors have testified that they believe the company has contracts with the military and has deployed its technology in medical evacuations and on battlefields, for example.
One of the prosecutors, Robert Leach, a deputy US prosecutor, has asked Ms Holmes different versions of the same question on several occasions to hammer out the lack of military contracts. She confirmed that Theranos did not have the contracts.
To show that Theranos was never paid to work with drug maker GlaxoSmithKline, Mr Leach also repeatedly asked Ms Holmes about the lack of income, asking the question for each year from 2007 to 2014. Ms Holmes a says no every time.
Ms Holmes resisted many of the questions asked by Mr Leach by testifying that she did not remember or did not know. She also tried to dispute details in some questions.
Ms Holmes’ attorneys questioned her a second time on Tuesday afternoon with a series of quick statements meant to undermine Mr Leach’s arguments and reiterate her initial testimony. Once again, Ms Holmes said Mr Balwani created the unrealistic financial projections for Theranos and scientists at Theranos wrote reports on his technology.
Until a regulatory inspection revealed deeper issues, she said, she believed Theranos’ lab was “excellent.” Ms Holmes has also repeatedly stressed her concerns over the disclosure of Theranos’ trade secrets as an excuse to withhold information from investors and partners, again testifying that she feared the company would lose its ability to compete. Discussing Theranos ‘use of third-party machines would have violated Theranos’ own trade secret policy, she said.
Mr Leach attempted to reverse that argument by noting that most of Theranos’ investors and partners had signed nondisclosure agreements that Ms Holmes expected to be honored.
He further noted that, despite the fact that Ms. Holmes held a patent for a technology, a patent did not necessarily mean “the invention described in the work of the patent”. Mr. Leach asked her if she had created a pill that measures lipids in the blood, as described in a Theranos patent.
Ms Holmes smiled, leaned into the microphone and said, âNot yet.
Erin woo contributed reports.