Elizabeth Holmes trial - live: Former Theranos employees expected to take the stand as founder accused of ‘lying and cheating’
Follow the latest updates from The Independent
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The trial of Theranos founder and former CEO Elizabeth Holmes continues on Tuesday as prosecutors representing the US government will attempt to prove to the jury that it was the intent of Ms Holmes to mislead investors, patients, and doctors about what her blood-testing technology was capable of in order to get ahold of their money.
During the opening statement for the US government, a federal prosecutor said that Ms Holmes “decided to lie” because she was “out of time and out of money”.
“This is a case about fraud, about lying and cheating to get money,” Prosecutor Robert Leach said. He added that in 2009, Theranos was short on cash as it got less and less work, and the company could barely pay its employees.
Lance Wade, a defence lawyer for Ms Holmes, told the court: “Elizabeth Holmes did not go to work every day to lie, cheat and steal. The government would have you believe that her company, that her entire life, is a fraud. That is wrong. That is not true.”
Ms Holmes, 37, who has pleaded not guilty, founded her company in 2003 at the age of 19 after dropping out of Stanford. The goal of Theranos was to radically change how blood testing is done. She now faces up to 20 years in prison if she is found guilty of the charges.
Court documents have revealed that the defence team may argue that another Theranos executive, Ramesh “Sunny” Balwani, 56, who is also Ms Holmes’ ex-boyfriend, emotionally, sexually, and physically abused Ms Holmes. That meant that he was in control, not her, the defence may argue. Mr Balwani, who served as the president and chief operating officer after joining Theranos in 2009, is facing his own trial early next year and has forcefully rejected the claims of abuse. He has also pleaded not guilty.
Theranos was at one point valued at $9bn as the company promised that their technology could test for diseases like cancer and diabetes by just taking a few drops of blood with a finger stick. Ms Holmes partnered up with retail giants such as Walgreens and Safeway and could be seen on the covers of magazines where she was described as the richest self-made woman.
But a 2015 Wall Street Journal investigation into the company was the beginning of the end for Theranos, which was dissolved in 2018. The trial of Ms Holmes, which has been delayed several times by the pandemic and her pregnancy, is expected to take around 13 weeks.
Ex-Theranos CEO Elizabeth Holmes ‘decided to lie’ as she was ‘out of time and out of money,’ federal prosecutor says in opening statement
During the opening statement for the US government in the trial of Theranos founder Elizabeth Holmes, a federal prosecutor said that she “decided to lie” because she was “out of time and out of money”.
Following last week’s jury selection, the trial of former Theranos CEO Elizabeth Holmes began on Wednesday with opening statements.
The government will attempt to prove to the jury that it was the intent of Ms Holmes to mislead investors, patients, and doctors about what her blood-testing technology was capable of in order to get ahold of their money.
Ms Holmes, 37, who has pleaded not guilty, founded her company in 2003 at the age of 19 after dropping out of Stanford. The goal of Theranos was to radically change how blood testing is done. She now faces up to 20 years in prison if she is found guilty of the charges – ten counts of wire fraud and two counts of conspiracy to commit wire fraud.
Read more:
Ex-Theranos CEO ‘decided to lie’ as she was ‘out of time and money,’ prosecutor says
‘Theranos failed and Ms Holmes walked away with nothing, but failure is not a crime,’ defence argues
Defence lawyer: Holmes’ stocks were worth billions, but she never sold any
Defence team says government is trying to turn a failed startup into a criminal enterprise
The government’s prosecutors are trying to turn a failed startup into a criminal enterprise, Lance Wade, a defence lawyer for Elizabeth Holmes, argued during his opening statement in the San Jose courthouse on Wednesday.
He claimed that the government looked at Ms Holmes “through a dirty lens” but that she’s really “far more complicated,” as well as “far more human, more real and ... technical and complicated and boring”.
Speaking about the presumption of innocence, Mr Wade told the court: “Ms Holmes sits there today in this courtroom innocent. She’s innocent ... whatever is written or said about her before today is gone.”
Video shows Elizabeth Holmes enter courthouse on day of opening statements
A video from Wednesday morning shows Elizabeth Holmes walking into the San Jose courthouse as opening statements were set to start.
Prosecutors show Fortune magazine cover: ‘Her deceit of reporters was an important way she executed her fraud'
US government prosecutors showed a Fortune magazine cover story during their opening statement on Wednesday, arguing Elizbeth Holmes’ “deceit of reporters was an important way she executed her fraud”.
Courtroom sketch shows Elizabeth Holmes during opening statements
Holmes defence lawyer says trusting Balwani ‘was one of her mistakes'
Lance Wade, defence counsel for Elizabeth Holmes, noted as the court returned from a break that while his client is not from Silicon Valley, she now lives there along with her partner Billy Evans and their child born earlier this summer. Mr Evans and Ms Holmes’ mom are in the courtroom.
Mr Wade added that Ms Holmes moved to Silicon Valley when she was an undergraduate student at Stanford in the fall of 2002.
“This was an obvious destination for someone with her interests,” Mr Wade said.
During her time in college, Mr Wade said Ms Holmes worked abroad doing “entry-level work” on the Sars virus for the Genome Institute. The work was “not glamorous”.
Upon her return, Ms Holmes filed a patent application in September of 2003 for genome testing, Mr Wade said.
He added that Ms Holmes met Sunny Balwani in China when she was 18 and he was 37.
“You’ll hear certain aspects of that relationship had an impact on Ms Holmes,” Mr Wade said, adding that “trusting and relying on Balwani as her primary advisor was one of her mistakes”.
The defence lawyer added that Mr Balwani “pursued” Ms Holmes and encouraged her to drop out of Stanford.
Defence counsel claims Theranos employees quit because of Balwani
Defence lawyer says investors funded company mostly because of Walgreens partnership
Defence counsel Lance Wade told the court that Theranos had no retail experience or regulatory approvals.
Ms Holmes had an idea, but she was only 25 years old at the time. “Most retailers could see that,” Mr Wade said, but added that both Walgreens and Safeway were “more daring, or maybe more desperate to go after these services”.
He also said that investors put their money into Theranos “largely because they saw the Walgreens partnership as an endorsement of this young company”.
According to Law360, Mr Wade said the court would later learn that Walgreens’ “two-phase approach required Theranos to do too much too fast, far beyond its expertise. A mistake. Not a fraud”.
Investors were ‘incredibly sophisticated and knew the risks’, defence argues
Elizabeth Holmes’ defence team has argued that the investors who put their money into Theranos were “incredibly sophisticated and knew the risks”.
They were millionaires and billionaires, lawyer Lance Wade noted, such as the heirs to the Walmart fortune, media mogul and Fox News owner Rupert Murdoch, and the DeVos family.
“They knew what they were buying,” Mr Wade said.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments