Elizabeth Holmes trial: Theranos scandal “is not that bad”, says defense in pleadings


SAN JOSE, Calif. (KRON) – There are a lot of strong opinions about Elizabeth Holmes, the former CEO of Theranos, accused of faking her rise to Silicon Valley stardom.

The only opinions that will decide his fate are however in the minds of 12 anonymous jurors.

The case could be handed over to the jury for deliberation as early as Friday. Defense attorney Kevin Downey was still delivering closing arguments at 11 a.m. on Friday.

The victims in this case are patients who had frightening health problems when they received false blood test results from Theranos, as well as investors who injected millions of dollars into Theranos.

To get a guilty verdict, prosecutors must remind the jury why this case matters, legal analyst Michele Hagan said.

“The prosecution needs to make the jury care. Why do we care about this matter? We care because technology (Theranos) puts the lives and health of patients at risk, ”Hagan said.

Holmes is charged with 11 counts of fraud and conspiracy. Each count carries a maximum penalty of 20 years.

Holmes, 37, was not detained during her trial. She goes to the San José Federal Courthouse every day, holding her mother’s and her husband’s hands. His supporters also included his brother, Christian Holmes, for the first time on Friday.

Elizabeth Holmes walking past the San Jose Federal Courthouse on December 16, 2021 (Justin Sullivan / Getty Images)

Twenty-nine witnesses have testified against Holmes, describing his actions as the face and CEO of Theranos. The defense called only three witnesses, including Holmes herself as a star witness. She blamed everyone around her at Theranos.

Hagan said the jury’s verdict will be determined by who they believe.

“She testified to her version of reality,” Hagan said.

“Twenty-nine government witnesses against Elizabeth Holmes. They bet on it. And just as she bet on herself when she left Stanford, she’s taking another bet herself by pleading this Elizabeth Holmes case against everyone, ”Hagan said.

Throughout the trial, defense attorneys and prosecutors argued over what Holmes’ true intentions were.

Prosecutor Jeffrey Schenk began his argument by telling the jury: “Elizabeth Holmes had a choice to make. She could watch Theranos slowly fail, or she could make a different decision. Holmes made the decision to defraud his investors and his patients.

“This choice was not only callous, it was criminal,” said Schenk.

“Holmes knew one thing for sure: An honest case to his investors and his patients would not result in any income for Theranos. Theranos was running out of money, ”Schenk said.

Elizabeth holmes
Elizabeth Holmes watches her husband, Billy Evans, as she arrives at the courthouse on December 17, 2021. (Photo by Justin Sullivan / Getty Image)

He told the jury to “imagine what an honest pitch would have looked like. She would have said that the Theranos tests were inaccurate… that Theranos (the technology) had not been validated. She reportedly told the patients, you can do a blood test, but it’s unreliable.

When Holmes charmed sophisticated and wealthy investors, she “caught flies with honey,” he said.

The defense described Holmes’ intentions as noble. She dropped out of Stanford University at age 19 with dreams of saving lives with a new invention. Holmes wanted to build a device using microtechnology that could perform any blood test a traditional lab could do, from a simple blood stick.

In argument on Friday, Downey said, “His interest was not in making money. It was to bring this technology to the world.

“Elizabeth Holmes was building a business, not a criminal enterprise,” Downey told the jury.

Holmes was unaware of the major issues in Theranos’ blood lab, his defense team claimed.

The prosecution has focused on a series of events at Theranos that “look bad, but at the end of the day when all the evidence comes together it’s not that bad,” Downey said.

The rise and fall of Theranos is one of the biggest scandals in Silicon Valley history.

Her defense team said Holmes was a hard-working young entrepreneur who tried her best and failed.

“Failure is not a crime,” said defense lawyer Lance Wade.

Theranos has raised more than $ 900 million, forged partnerships with major retailers Walgreens and Safeway, and made Elizabeth Holmes a cover of Fortune magazine.

But unknown to most people outside of Theranos, the company’s blood testing technology was flawed. As CEO, Holmes has avoided questions about the operation of his blood machines by throwing out the term “trade secrets.”

Prosecutors said Holmes had woven a web of lies to save himself from failure, and his lies reached the level of fraud.

Theranos collapsed after its tech flaws were discovered in 2015 and 2016. Federal prosecutors have accused Holmes and Sunny Balwani – Theranos ‘former COO and Holmes’ ex-boyfriend – of plotting together to defraud investors and patients.

Balwani will be tried separately next year.

Key witnesses who testified against Holmes:

Former US Secretary of Defense James “Mad Dog” Mattis

Mattis testified that Holmes impressed him because she was “sharp”, “articulate” and “engaged”. He joined the board of directors of Theranos and invested in the company.

Once a strong supporter of Theranos’ mission, Mattis testified that he finally realized the Holmes had misled him with empty promises.

Whistleblower and former Theranos lab technician Erika Cheung

Theranos blood test machines failed so frequently that lab workers worked around the clock to recalibrate themselves, Cheung said.

Cheung testified that she was afraid of company executives. After resigning, Cheung received an email from the company’s legal team threatening her with libel suit.

Adam Rosendorff, former director of the Theranos laboratory

As Theranos’ senior laboratory director, Rosendorff was legally responsible for making sure blood tests were accurate. The defense dug holes in Rosendorff’s credibility and ethical integrity, Hagan said.

When Rosendorff left Theranos, he leaked information to the Wall Street Journal. John Carreyrou, former WSJ reporter and author of “Bad Blood,” revealed Rosendorff was his “Deep Throat” for a series of investigation into Theranos.

Steven Burd, former CEO of Safeway and Wade Miquelon, former CFO of Walgreens

Two businessmen who helped secure multi-million dollar deals with Theranos, former Safeway CEO Steve Burd and former Walgreens CFO Wade Miquelon, both had close personal relationships with Holmes.

Walgreens and Safeway had the same goal in 2010: They wanted to install Theranos blood testing machines in all of their pharmacies.

Miquelon wrote an email in 2010 to his fellow Walgreens executives saying, “We will be the gateway to primary care and the gateway to the exit. Then we will truly be the most important player in health care in the United States.

Patient Brittany Gould

Gould learned that she had a miscarriage in 2014 because a Theranos blood test incorrectly showed her HCG levels to drop dramatically. Gould later gave birth to a healthy daughter.

Prosecutors showed the jury a letter from Christian Holmes, brother of Elizabeth Holmes and a Theranos employee, who wrote an apology to Gould’s doctor, saying “these errors are extremely rare.”

Fortune magazine reporter Roger Parloff

Parloff wrote a flattering Fortune magazine cover describing Holmes. History propelled her to stardom. He testified that he was impressed with Holmes and his “remarkable company”. The article contained inaccurate information about the performance of Theranos technology.

The Associated Press contributed to this report.

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