Elizabeth Holmes trial: After stunning testimony, where does she stand and what comes next?

Ethan Baron, The Mercury News on

Published in Business News

SAN JOSE, California — For Theranos founder Elizabeth Holmes, the stakes could hardly be higher: a new mother at 37, in a relationship with an MIT-educated hotel heir, she could find herself locked away for years in a prison cell if the jury in her trial decides she committed criminal fraud.

Holmes, whose spectacular startup crash has led to one of the most closely-watched trials in Silicon Valley history, is accused of swindling investors out of hundreds of millions of dollars and defrauding patients with false claims that her defunct Palo Alto company’s purportedly revolutionary blood-testing machines could conduct a full range of tests using a few drops of blood from a finger stick.

To convict Holmes, federal prosecutors must go beyond the well-documented deficiencies of Theranos’ technology and persuade the jury that Holmes deliberately schemed to take money from investors and patients when she knew the technology did not work.

“The question for this jury is, ‘Did Elizabeth Holmes go too far?'” said legal analyst and former Santa Clara County prosecutor Steven Clark. But with both sides having made strong cases — and the possibility that additional testimony and evidence could emerge before the trial ends — Clark said, “I can’t answer that at this point.”

The Case Against Holmes

With a parade of 29 former Theranos employees, investors and patients, prosecutors have sought to portray Holmes as a greedy CEO who was in full control of her company, spinning a web of lies about the capability of her machines that ensnared investors and put patients’ lives and health in jeopardy.


Ex-laboratory staff and lab officials detailed serious problems with the accuracy of Theranos’ machines. Internal emails showed that Holmes — who has sought to distance herself from lab operations — was told about the issues, but she concealed them from investors and her board. Patients and a doctor also told jurors about test results from Theranos’ own machines that falsely indicated possible HIV infection and cancer.

The prosecution, said Bay Area legal analyst Michele Hagan, presented the jury with “consistent and corroborating testimony from one witness after another that showed that Holmes knew the problems were not being addressed and was still representing … that everything was A-OK.”

Investors testified about the promising and persuasive claims Holmes made, and expressed bitterness at what she left out, including that Theranos’ technology was unreliable, and that even as the company was claiming its blood tests could perform all the offerings of laboratory giants, it was relying on other firms’ machines for dozens of tests it could not actually perform.

In some of the most damning testimony, former U.S. Secretary of Defense James Mattis and an investment manager for the family of former U.S. Education Secretary Betsy DeVos testified that Holmes’ insinuations about the military using Theranos devices on medevac helicopters were misleading. A long-time lawyer for former U.S. Secretary of State Henry Kissinger — who, like Mattis, was a Theranos board member and investor — and former Walgreens chief financial officer Wade Miquelon also testified that Holmes had sent them glowing reports about Theranos altered to look like they came from major pharmaceutical firms.


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