Fallen tech star Holmes set to face fraud trial
THERANOS FOUNDER WILL ‘ACCUSE EX-LOVER OF ABUSE’
A TRIAL of fallen US biotech star Elizabeth Holmes begins this week with federal jurors in San Jose, California, scheduled to hear opening arguments in the case against the Stanford University dropout who is charged with misleading investors and patients.
Holmes, 37, was a tech world celebrity whose multi-billion dollar start-up looked set to revolutionise medical testing using a single drop of blood before it crashed and burned in a blaze of fraud claims. She is accused of falsely claiming that her company’s printer-sized devices could run a range of tests and produce accurate results.
Holmes and former Theranos chief operating officer Ramesh “Sunny” Balwani, whom she dated for a time, are charged with conspiring to swindle Theranos investors and customers.
Court papers submitted more than 18 months ago and unsealed last month revealed that Holmes accused Balwani of psychological and sexual abuse.
Her lawyers said Holmes’ “deference” to Balwani led her to believe allegedly false statements about parts of Theranos that he controlled, including a claim about a partnership with drugstore chain Walgreens. Holmes was 18 years old when she met Balwani, who is 20 years older than her, and started living with him around three years later, according to Bad Blood, Wall Street Journal reporter John Carreyrou’s best-selling book on the Theranos saga.
The book chronicles the rise and fall of the company Holmes started at age 19, concluding that she was a “manipulator” whose “moral compass was badly askew.” Balwani denied allegations of abuse in a 2019 court filing. He is scheduled to be tried on fraud charges related to Theranos after the end of Holmes’ trial.
Holmes founded Theranos in 2003 at the age of 19, and prosecutors allege she told the company’s private investors several lies, including that Theranos did not need US Food and Drug Administration approval for its devices. Holmes is also accused of having defrauded patients by leading them to think blood tests from Theranos machines were more accurate than they were.
Political figures like Henry Kissinger and former US defence secretary James Mattis were drawn to the company’s board and media mogul Rupert Murdoch invested cash in what seemed to be a sure-fire winner.
Holmes was lauded as a visionary, drawing comparisons with Apple founder Steve Jobs. But years of hype, and billions of dollars later, those promises unspooled; the miracle machines did not work.
And, say prosecutors, Holmes knew it, yet continued to lie to investors, doctors and patients so she could raise more than $700 million (£508m). At one point she had a net worth estimated at $3.6 billion, according to Forbes magazine. At the time she was the youngest billionaire not to have inherited her fortune.
Jurors could hear from former board members like Kissinger and Mattis, as well as from Murdoch after witness testimony begins on Wednesday (8).
To be convicted, the jury of 12 must unanimously find her guilty beyond a reasonable doubt.
In court filings, Holmes’ attorneys have argued there is a missing link between what Holmes herself knew and what Theranos employees told doctors and regulators about the company’s technology.
“Corporate executives generally do not face individual criminal liability for the actions and statements of a corporation’s agents or employees, and that principle holds equally true in this case,” they wrote.