Elizabeth Holmes could have escaped the sinking of Theranos’ ship, but instead “she believed in this technology”, her lawyers have claimed


Elizabeth Holmes’ legal team described the failed Silicon Valley entrepreneur as a confident leader who, even as his doomed startup Theranos crumbled and burned, stuck with his belief in the now discredited blood testing technology as they handed the fraud case over to jurors on Friday. .

“At the first sign of trouble, crooks cash in, criminals take cover and rats flee from a sinking ship,” Holmes’ attorney Kevin Downey said in closing arguments. But Holmes did none of that. “Why? Because she believed in this technology. She stayed all the time, and she sank with this ship when it sank.

And yet, it was this dedication to the Holmes company that left Stanford University at age 19 for – so she could focus her life on her success – that federal prosecutors say provided the former CEO and founder the motivation to resort to fraud.

“She did this on behalf of the company,” Deputy US Attorney John Bostic told jurors in a defense rebuttal. “She committed these crimes because she desperately wanted the business to succeed.”

Now a 12-person jury will decide whether Holmes, 37, intentionally defrauded investors and patients by making misleading and false claims about the capabilities of his blood testing technology, the company’s work with military giants. and pharmaceuticals, and the accuracy of its test results. The jury began its deliberations Friday night after a trial that lasted more than three months and included the testimony of more than 30 witnesses, including Holmes. For seven days, the former CEO and founder of Theranos – whose fall drew intense media coverage and public scrutiny – denied ever trying to cheat anybody, expressed regret, blame diverted, and accused her former second in command and ex-boyfriend of psychologically and sexually assaulting her during their ten year relationship.

His fate will likely depend, legal experts say, on whether his testimony raises enough doubts in the minds of jurors about the evidence presented by prosecutors. And while Holmes’ statements of abuse were the most vivid and moving part of the trial, the jury was able to find that even though she was a victim, that does not absolve her of responsibility for what she said as CEO.

“The jury may not find a sufficient connection between the alleged abuse and whether it was capable of intending to defraud,” Diane Birnholz, former federal prosecutor and law professor at the Law School of UCLA. “Both can be true: she could have been abused and she could still have intended to defraud these investors and these patients. “

Prosecutors alleged that Holmes conspired with her ex-boyfriend Ramesh “Sunny” Balwani, who was the president and chief operating officer of Theranos, to defraud investors as well as patients and doctors who used the services of company laboratory. Holmes is charged with nine counts of wire fraud and two counts of conspiring to commit wire fraud. Each count carries a sentence of up to 20 years in prison if found guilty. Balwani faces the same charges as Holmes and is expected to stand trial next month.

The former Silicon Valley entrepreneur had sought to disrupt healthcare with Theranos’ proprietary machine, which she said could perform hundreds of tests on a few drops of blood. The company’s device was said to be faster, cheaper, and more accurate than any other blood testing lab equipment on the market, and promised to bring critical diagnostics to pharmacies, homes, and even healthcare fields. battle. But as Wall Street Journal survey revealed in 2015, in reality, the machine could only run a small number of tests, and its results were often inaccurate or unreliable. Instead, Theranos relied on commercially available machines to run the majority of its tests, diluting the blood drops to increase volume for some tests and using much larger samples taken from the arms. patients for others.

“The real version of Theranos, where the accused went to work every day, was radically different from the pink picture she painted for others,” Bostic said.

This, however, did not negate the fact that Holmes and others at Theranos worked hard to achieve his vision. “The illness that plagued Theranos was not a lack of effort,” Bostic added. “It was a lack of honesty”

During his oral argument on Thursday and Friday, Downey offered a different take on the evidence and tried to dig holes in the prosecution’s narrative, saying the former CEO wasn’t trying to hide anything. it would be. He showed jurors several slides of names of former employees, doctors and others that the government did not call to the witness stand to suggest that the government’s representation of Theranos was not the whole story. He also attempted to distance Holmes and her actions from some of the investors she allegedly defrauded, suggesting they had limited direct contact with her and did not rely on issues highlighted by prosecutors – like false claims about Theranos’ work with the military and drug companies – in their decisions to invest.

Regarding the disturbing test results that several patients have testified to at trial, Downey said by the time Holmes was made aware of the issues, they had been resolved.

And while Holmes admitted she made several mistakes along the way – like provide journalist Roger Parloff with inaccurate information for his 2014 Fortune magazine cover story – Downey argued that his claims about the capabilities of Theranos devices were ambitious.

“You know what Mrs. Holmes has done in her life. You know she left school. She gave up a university education for which people would give their right arm, ”he told the jury. “Why? Because she believed she was building technology that was going to change the world.

Bostic targeted several of Holmes’ team’s arguments in his rebuttal on Friday afternoon. For example, he noted that investors, board members and reporters left conversations with Holmes understanding that she was talking about Theranos’ current abilities when she made them believe that the company’s devices were actively used by the military, and that they could perform hundreds of tests on a few drops of blood taken from a finger.

“A lie is a lie the moment it’s done,” Bostic said. “It doesn’t matter whether Mrs. Holmes intended to tell the lie or to avoid being discovered.”

Jurors have been instructed not to be swayed by sympathy and to consider all the evidence bearing in mind that it is for them to determine the weight to be given to each testimony or exhibit. witness.

Birnholz, who previously pursued fraud cases for the U.S. Attorney’s Office in Los Angeles, said that while Holmes’ testimony is likely to be a priority for jurors, they may find that her abuse claims are not in the spotlight. heart of the matter.

“Her credibility is absolutely essential… and if the jury believes her, then they probably won’t be convicted,” Birnholz said. “But I think it comes down more to what she was telling investors, what she knew at the time, what her behavior was when she was running this company, how involved was she.”

Robert Weisberg, a professor of criminal law at Stanford, said the jury might find it difficult to compare the evidence with the various characters presented by Holmes, namely that of a “romantic innovator” who was totally in control and a person who did not have an agency. because of an abusive partner. This dilemma could help or hurt her in the end, he said.

“She was an excellent performer [as a witness], but the script she had to work with was deeply flawed, ”Weisberg said.

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