Elizabeth Holmes Trial: Jury Begins to Debate Theranos Founder’s Fate

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San Jose, Calif .—Eight male and four female juries on Friday at Theranos Inc. Was instructed to begin deliberations on the fate of Elizabeth Holmes, the founder of. Suspected fraud It has supported one of the largest white-collar crime cases in Silicon Valley history.

The jury is responsible for weighing after hearing from 32 witnesses over a three-month period. Whether Holmes is guilty Nine accusations of wire fraud and two accusations of conspiracy to commit wire fraud. Each claim can be sentenced to up to 20 years.

US District Judge Edward Davila sent the jury out of court late Friday and began deliberations, following the jury’s instructions and the final words from each side. They will soon finish the day and come back on Monday morning.

Holmes’ lawyer told the jury that Friday had the last opportunity to keep her away from the allegations she was facing, and that accounting errors could explain her allegations that she inflated her income forecasts. Her remarks about working with the military were ambitious.

“She believed she was building technology that would change the world, and that’s our story,” defendant lawyer Kevin Downey told the jury.

Government prosecutors continued their final rebuttal, claiming that Theranos suffered from the “lack of honesty” that came from its leadership.

Holmes founded Theranos after dropping out of Stanford University in his second year. She built it for almost 12 years before a series of Wall Street Journal articles, beginning in 2015, revealed a problem with the company’s proud fingerstick blood test technology, including regulatory measures, criminal accusations, and criminal charges. Caused the final collapse of Theranos in 2018.

At the Elizabeth Holmes trial, the prosecutor showed her text, email, and audio clips in her own words. The WSJ’s Shelby Holiday asked Saralandazzo about important evidence and what to expect. Photo: Nick Otto via Getty Images / AFP

Downey argued that Theranos’s lofty financial forecasts for investors were based on reality. Forecasts of revenues of about $ 140 million in 2014 and about $ 990 million in 2015 explained deferred revenues that would have made those forecasts accurate if they had been realized. Said. He said he wasn’t sure why the company thought deferred revenue could be counted as actual revenue.

“Investors understood that the forecasts were uncertain,” Downey said.

Holmes’ lawyer remained unresolved Allegations of abuse She opposed her ex-boyfriend and Theranos’ top deputy, Ramesh “Sunny” Balwani. From the standHolmes said Balwani was emotionally and sexually abusive, and claimed that his lawyer strongly denied it.

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Mr Downey did not attempt to link the allegations to the case or teach the jury how to contextualize the allegations.

The prosecutor addressed the allegations of abuse head-on in closing arguments. Assistant U.S. Attorney John Bostic understands to the jury whether he feels sympathy for Holmes, but the defense does not provide evidence and Holmes links her allegations against Balwani to fraud. He said he did not testify. Accusation against her.

“It would be wondering why Holmes testified about those claims when he was standing on the stand,” Bostic said. “You should put it out of your mind.”

When Judge Davila ordered the separation of Mr. Holmes and Mr. Balwani’s trials last year, Mr. Holmes said, “Ultimately, alleged abuse to make the abuse relevant and acceptable. Need to be linked to the act of being charged. “

Holmes’ lawyer, Downey, focused on the interaction between Holmes and the investor and the patient mentioned in the indictment.

“People have lost money. I don’t chop up words about it,” Downey told the jury. However, he said the potential consequences were known to investors from the beginning, showing the jury that investors in the stock purchase agreement signed that it was speculative in nature.

Downey told the jury that Holmes hadn’t misleaded investors about the work Theranos was doing with the US military. Revisiting the phone call Holmes made for investors in 2013, Downey talks about the potential application of Theranos technology in military helicopters, or about saving soldiers’ lives. Claimed to be talking. ..

“She didn’t say these devices were in flight for clinical use,” he said.

Contract records show that work with Theranos’ army was limited in scope. According to procurement records, Theranos appeared to have received less than $ 9,000 in total from military contracts. In one case, military officials briefly investigated their relationship with Theranos before rejecting the company’s regulatory strategy, Journal reports.

Downey, a Theranos investor, said some of the company’s backers didn’t ask questions or educate themselves with publicly known information for their financial loss. Claimed to have taken some responsibility.

Alan Eisenman, a Texas investor who invested about $ 1.2 million in Theranos, said Testimony that Holmes was deceived and lied.. Downey argued that much of what Eisenmann said was hidden from him was publicly known.

Investors who asked questions, such as government witness Chris Lucas, received accurate information from Holmes, Downey said.

Lucas’ testimony did not support the claim. He warned his Black Diamond Ventures colleagues as he testified that there was such a lack of embarrassing information from Mr. Holmes. They made an investment anyway.

“The level of due diligence is not important,” Bostic argued to the jury. “A fraudulent plan is a fraudulent plan, even if it just traps someone who is less careful than it should be.”

Defendant lawyer Downey concludes his discussion by returning to the comments made in the opening statement. Holmes had never sold a stake in the company and owned about half of it, so no one intended to scam.

“She believed in this technique,” Downey said. “She stayed all the time, and when it went down, she got off with the ship.”

Theranos and Elizabeth Holmes Trial

Write to Heather Somerville Heather.Somerville@wsj.com, Saralandazzo sara.randazzo@wsj.com And Christopher Weaver christopher.weaver@wsj.com

Copyright © 2021 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Elizabeth Holmes Trial: Jury Begins to Debate Theranos Founder’s Fate

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