Elizabeth Holmes trial: closing arguments are about to begin
SAN JOSE, Calif .– For Elizabeth Holmes, it all comes down to intention.
On Thursday, prosecutors and defense attorneys presented their closing arguments in the fraud trial of the founder of Theranos, the failed blood test startup. In what was in fact their last attempt to convince jurors, each side framed their arguments around whether Ms Holmes, 37, had deliberately chosen to lie, mislead and cover up her start- up.
“She chose fraud over business failure,” Jeff Schenk, deputy US attorney and one of the senior prosecutors, said of Ms. Holmes in his closing remarks to the jury.
Kevin Downey, an attorney for Ms Holmes, argued that she believed her own claims and never intended to deceive. “If someone is acting in good faith, you have no reason to convict them,” he said.
Pleadings closed 15 weeks of a landmark trial in the world of white collar crime. Ms. Holmes’s case is being watched closely like a referendum on the worst excesses of Silicon Valley startup culture, which values demands for world change and rapid growth. The verdict could influence whether prosecutors pursue similar white-collar cases at a time when tech start-ups are swimming in funding and hype.
But proving intent is the hardest part of pursuing a white-collar criminal trial, said James Melendres, a former federal prosecutor.
“It’s about what’s going on in someone’s mind, which is extremely difficult to definitively prove,” he said.
The jury of eight men and four women will begin deliberating on Ms Holmes’ fate once the defense concludes its closing arguments, most likely on Friday. Ms Holmes, who has pleaded not guilty to nine counts of wire fraud and two counts of conspiring to commit wire fraud, faces up to 20 years in prison if convicted.
Prior to the Theranos implosion, Ms. Holmes stood out as the rare successful founder in the male-dominated tech industry. She founded Theranos in 2003, left Stanford University in 2004 to work on the startup, and has raised nearly $ 1 billion from investors for the company’s supposedly revolutionary blood testing technology. business. His promise: Theranos’ tests could detect a whole range of health problems with just a few drops of blood.
But a Wall Street Journal investigation in 2015 revealed that Theranos’ technology was not working and that Ms. Holmes appeared to have courted investors and business partners with misleading claims. The business collapsed in 2018 after canceling millions of its blood tests.
That same year, Ms Holmes was charged with fraud. His trial began on September 8 after numerous delays.
Prosecutors called 29 witnesses, describing six main areas of Ms Holmes ‘alleged deception, including lies about Theranos’ tech capabilities, work with the military, and business performance.
Former Theranos employees said the startup’s technology routinely failed quality control tests, returned inaccurate results and could only perform a dozen tests, rather than the hundreds according to Holmes. Doctors and patients explained how they made medical decisions based on Theranos tests that turned out to be wrong.
Prosecutors also showed a set of Theranos validation reports bearing the logos of drug companies that had neither prepared nor approved the findings they contained. They showed letters to investors in which Ms Holmes falsely claimed Theranos had military contracts and employee emails saying the company was hiding device failures and suppressing abnormal blood test results.
In their testimony, investors and pharmaceutical executives said Ms Holmes’ claims led them to invest millions of dollars in Theranos or sign contracts with her company.
“The government has spent a lot of time presenting evidence not from just one misrepresentation claim, but from several,” Melendres said. “If you line up three, four, five, half a dozen inaccuracies, it becomes more difficult for the jury to agree on anything other than the fact that there was an intentional ploy.”
The defense called only three witnesses and relied on Ms Holmes to make their case. Last month, she spoke up to portray herself as a well-meaning, naïve, and overly dependent entrepreneur on those around her. She said she was emotionally and physically abused by Ramesh Balwani, the former chief operating officer of Theranos and her former boyfriend.
Ms Holmes voice quivered and her eyes filled with tears as she recounted how Mr Balwani dictated almost every aspect of her life to her and even forced sex on her, implying that she was in control. less his actions than prosecutors had suggested. She cried at the stand a second time when prosecutors, to refute her characterization that the relationship was abusive, asked her to read love texts between her and Mr. Balwani.
Mr Balwani, who faces identical fraud charges as Ms Holmes and is due to stand trial next year, has denied the allegations.
Mr Schenk on Thursday dismissed Ms Holmes’ abuse accusations as unrelated to the fraud charges.
“The case concerns false statements made to investors and false statements made to patients,” Mr. Schenk said, noting that a guilty verdict did not mean the jury did not believe his allegations of abuse and vice versa. “You don’t need to decide if this abuse took place.”
Instead, Mr. Schenk focused on tying together weeks of testimony. He went through the witnesses one by one and described each element of the 11 charges against Ms Holmes. Sometimes he asked jurors to write down the exhibit numbers to refer to during deliberations.
Time and time again, Mr Schenk pointed to claims Ms Holmes herself had made, pointing to inaccurate quotes she gave to reporters and releasing a recording of her exaggeration of Theranos’ military ties to investors.
He posted emails to Ms Holmes, in which she was briefed on the accuracy issues with Theranos’ technology, and a timeline showing that she had nonetheless continued with the start-up’s commercial launch.
“She was involved; she is responsible ; she knows it, ”said Schenk.
The defense began their argument by claiming that the government had not told the full story of Theranos’ relationship with the drug companies. Mr Downey said Theranos had contracts with drug companies and pointed to instances where Ms Holmes offered to put investors in touch with drugmakers, arguing she had no intention of deceiving investors on these relationships.
He dwelled on the positive comments Ms Holmes received about Theranos’ testing to show that she believed her claims about the technology. He also stressed his willingness to allow the Food and Drug Administration and other institutions to assess Theranos’ technology as a sign that it was not trying to hide how it worked.
Mr Downey also looked into details such as Ms Holmes’ understanding of the word ‘correctness’ to show that others had misunderstood her, not that she had misled them.
Mr Downey concluded Thursday’s session by posting a list of Theranos’ star-studded board of directors, which included former Secretary of State George Shultz and former Senator Sam Nunn, a Democrat from Georgia.
The slide was titled, “Was This Group Fooled?” “