- Prosecutors put their case to rest in Elizabeth Holmes’ fraud trial on Friday.
- In 11 weeks, the jurors heard the testimony of 29 witnesses.
- The government’s final witness was journalist Roger Parloff, who wrote a 2014 cover story on Holmes in Fortune magazine.
San Jose, Calif. Prosecutors on Friday put their case to rest after calling 29 witnesses in 11 weeks in a criminal fraud trial against former Theranos CEO Elizabeth Holmes.
Ex-lab directors took the stand, as did former Defense Secretary James Mattis, a Theranos board member. Jury members also heard testimony from patients, doctors, investors and business partners.
The government’s final witness on Thursday was journalist Roger Parloff, who wrote 2014 Fortune magazine. cover story, “This CEO is out for blood,” outlines Holmes. Prosecutors claimed that Theranos founder used the article to lure investors who piled into the blood-testing company, ultimately valuing it at $9 billion.
Holmes, 37, pleaded not guilty to 11 counts of wire fraud and conspiracy to commit wire fraud. One of the counts associated with a patient was dropped on Friday. A Stanford University dropout and former Silicon Valley wunderkind could face up to two decades in prison if convicted. He has denied any wrongdoing.
Now that the government has rested, the focus is on protecting Holmes, which is about to begin immediately. Juries have heard Holmes’ voice several times, including on Thursday, as the conversation was louder than Parloff’s recording.
But they have yet to hear directly from Holmes, and the central question now is whether they ever will.
“He is a very risky person to testify,” said Danny Savelos, an NBC News legal analyst tracking the case. “Yeah, he’s very smart. But there’s a lot of prosecution evidence that he can be cross-examined that he probably won’t have a good answer.”
Holmes was seen as the undisputed leader of Theranos from the company’s founding in 2003 until its collapse 15 years later. However, in documents released before the trial began, the defense blamed Holmes’ ex-boyfriend and former business partner, Ramesh “Sunny” Balwani, for a decade of abuse and control over him.
Defense lawyers continued that line of attack during the examination of witnesses, claiming that Holmes placed blind faith in Balwani and relied heavily on his laboratory directors.
Savelos said the defense faces the challenge of showing that Holmes was not always in charge and that he did not knowingly mislead investors and patients.
“The defense really has to grapple with the undeniable facts that Holmes was the boss and that the technique didn’t work,” Savelos said. “It’s a hard sell. The government has emails, text messages, and all kinds of documents. The government showed that the buck stopped with Elizabeth Holmes. The defense would try to show that she did it with only a few things, but all Not with things.”
Balwani has also been criminally charged with cheating and will face trial later.
An assistant U.S. attorney said late Thursday, as jurors left the courtroom, that if the defense begins its case on Friday, he would refer to the stand as “a paralegal from the Williams & Connolly law firm, who masquerades as a I am going to serve”. Summary Witness.”
Over the past 11 weeks, prosecutors have portrayed Holmes as a manipulative fraudster who defrauded patients and investors by making false claims about his company’s technology, which he said drew blood from a finger prick. The test battery can run.
Robert Leach, an assistant US attorney, repeatedly called Holmes a “liar and a fraud”, first in his initial statements and then through direct witness accounts.
The most high-profile witness was Mattis, who told jurors in September that, as a member of the Theranos board, he had been misinformed about the capabilities of the company’s technology.
“Looking back now, I am disappointed with the level of transparency that Ms. Holmes testified,” Mattis testified, adding that “we were being denied fundamental issues.” The retired four-star general said he invested $85,000 of his own money in a start-up.
There “came a point when I didn’t know what to believe about Theranos anymore,” he said.
Several company insiders, including whistleblower and former lab assistant Erica Cheung, testified that Theranos’ equipment could not run more than 12 different tests, contradicting the company’s announcements. Holmes told potential investors and others that Theranos’ proprietary technology could run 1,000 blood tests.
Prosecutors said Holmes defrauded investors by using unauthorized due diligence reports from major drugmakers such as Pfizer and Schering-Plough, whose company logos were on the documents.
Walgreens’ former chief financial officer, Wade Miquelon, was one of several executives who received a report with the unauthorized logo. A major Theranos partner, Walgreens, poured $140 million into the company as part of a deal to keep blood testing equipment inside its stores.
The partnership fell apart after Theranos repeatedly missed its deadline. Walgreens sued the company in 2016, alleging breach of contract.
When the jury members heard, the mystery of the people deepened. Dr. Shane Weber, a scientist at Pfizer, who in 2008 evaluated the blood test technology and came to the conclusion that the drug company should not make a deal with Theranos.
The jurors were shown a report from Theranos that Holmes had sent to Walgreens with the Pfizer logo. Weber testified that Pfizer never approved the use of the logo.
There were plenty of opportunities for Holmes to listen to his subordinates, who were constantly raising concerns. But prosecutors shrugged off the idea in the house that Holmes’ “fake it ’till you make it”
Strategy cost life.
Former lab director Adam Rosendorff, whose testimony lasted six days, told jurors that Holmes and Balvani ignored their repeated warnings that the technique simply didn’t work. Instead, he said officials prioritized the company’s finances and public image over the health of patients.
Kingshuk Das, the company’s last laboratory director, said he had also warned Holmes that the technology was unreliable. Das testified that he annulled 50,000 to 60,000 tests conducted using Theranos’ Edison blood testing device and told Holmes that it “wasn’t performing from the start.”
Both Rosendorff and Das said Holmes dismissed their concerns.
Holmes was once named by Forbes as America’s richest self-made woman, with an estimated net worth of $4.5 billion in 2015. The following year, after a series of Wall Street Journal stories highlighting Theranos’ shortcomings and misleading claims, Forbes Low Holmes deserves “nothing.”
By that time, the company had raised over $940 million from investors.
The jurors heard from a handful of wealthy supporters who said they invested in the company based on Holmes’ lofty promises. Witnesses included a representative of the family of former Education Secretary Betsy DeVos. Brian Tolbert, whose firm invested $5 million, and Alan Eisenman, a Texas investor, also testified.
Finally came Brian Grossman, whose firm. PFM Health Sci. Invested $96 million in Theranos. Grossman said he was deceived by Holmes, even though he took extensive precautions on the company and even drew his blood at Walgreens.
Grossman told jurors that Theranos claimed the technology had been validated by major pharmaceutical companies and the Defense Department, which used it on the battlefield and on MedVac helicopters.
“What better application for this kind of technology than in a military setting in harsh conditions like Afghanistan or Iraq?” Grossman said. Theranos indicated there was “something over $200 million in revenue from the Department of Defense,” he said.
None of this was true.
Instead, despite Holmes’ rosy financial projections, the company was bleeding hundreds of millions of dollars in cash, according to testimony from former finance chief San Ho Spivey, who also goes by Dennis Yam. As of 2015, Theranos had lost more than $585 million, Yum told jurors.
Prosecutors also pointed to a document provided to investors that estimated revenue of $140 million for 2014 and $990 million for 2015. Yama said that he did not prepare the document.
The jury heard additional testimony from three patients. Each detailed shocking stories about getting the wrong result after taking the Theranos test.
One of those patients, Erin Tompkins, said she was sent into panic when her results showed she had been tested positive for HIV antibodies. The test was wrong.
“I was very emotional at the time,” Tompkins said.
Watch: Confession tapes from Elizabeth Holmes trial