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In a surprise twist, the founder of failed start-up Elizabeth Holmes began testifying on Friday to defend herself against the 11 counts of criminal fraud she faces in connection with blood testing company Theranos that she has. founded after dropping 19 years at Stanford.
Until that happened, it was uncertain to the strangers whether Holmes would speak up during his trial. Even on Friday afternoon, legal experts stressed it was unlikely, given the risky decision that could expose him to cross-examination by the prosecution and possibly damage his credibility with the jury.
Holmes, wearing a navy blazer and white collar shirt, spoke up, removed her mask and smiled. His defense team had previously argued for the right for vaccinated witnesses to testify without a mask.
She has pleaded not guilty to defrauding investors and Theranos patients by wrongly claiming that the company has developed technology that allows a wide range of tests to be performed on a single drop of blood.
In her signature baritone, she announced to the jury her birthday – February 3, 1984 – and declared that she had spent her “freshman year and a half” at university at Stanford. There, she says, she met Channing Robertson, who was chairman of the chemical engineering department, and encouraged her to continue her research.
“Can you tell us what was going on in your head that generated this idea that you could file a patent application?” Asked defense lawyer Kevin Downey.
Holmes said she had worked at Stanford on microfluidics and on diagnostic machines in Singapore and “thought I could combine them and miniaturize some of the technologies I had seen in the lab. This led her to file her first patent application in September 2003, before her second year. It was finally granted in 2007.
The defense accompanied Holmes through Theranos’ early days as she sought advisers in the Stanford community, crafted a business plan and attracted investment, and, she believed, “nailed” expectations.
After the first demonstration of the Theranos equipment to pharmaceutical giant Novartis, Holmes sent staff an email, which was shown in court, which read: “The team. We nailed this one. You all did an amazing job to make this happen – this is the Theranos Method. “
This is not how everyone saw it. A Novartis protest was described as a failure in the book “Bad Blood” by Wall Street Journal reporter John Carreyou. The passage described a machine failure and a false result sent from California.
The testimony of the former CEO ended after just an hour. His testimony is expected to continue Monday and Tuesday. The court must then stop for the holidays and resume on November 29.
Holmes, 37, left the courtroom holding hands with her boyfriend, hotel chain heir Billy Evans. The couple had a son, born in July, shortly before the trial began.
The defense is trying to offer the jury an alternative account to that put forward by the government over the past 11 weeks, going through 29 witnesses and enduring technical delays, a water failure and the dismissal of three jurors.
Earlier on Friday, the government closed its fraud case against Holmes.
One of the 12 charges was immediately dismissed, following an earlier error by prosecutors. The defense previously asked the government to submit a list of specific Theranos diagnostic tests for which patient witnesses allege they received erroneous results.
For one of the patients whose testimony was the basis of Count 9 against Holmes, the government believed the patient’s test was covered by those on the list, but it was not. By the time the omission was discovered, it was too late for the prosecution to remedy it by filing a replacement indictment, as the limitation period had expired.
The defense requested the exclusion of several exhibits and testimony and requested an acquittal under rule 29, which requires a judge to grant an acquittal if the government has not presented enough evidence for a jury. finds an accused guilty beyond a reasonable doubt. While the move is not unusual, she says her lawyers believe she has a chance of success.
Holmes’ defense team also argued that the testimony of Theranos patient Erin Tompkins, who said she was given a test falsely indicating that she was HIV-positive, should be quashed because prosecutors did not not called his doctor to testify.
“Ms Tompkins’ testimony should remain on file,” countered prosecutor John Bostic, as she “was qualified to speak about her experience with the Theranos test and present the results she obtained to the jury.”
His lawyers also decided to delete part of a cover letter on a government lab inspection report, saying the prosecution never called a witness from the inspection agency CMS. The damning report states, in part, that “poor laboratory practices immediately endanger the health and safety of patients.”
“Ms. Holmes respectfully requests a motion of acquittal,†defense lawyer Amy Mason Saharia told the judge. The evidence provided is “insufficient for every item on every count,†she said.
Mrs. Holmes respectfully requests a motion of acquittal.
The defense called its first witness on Friday, a paralegal from the Williams & Connolly law firm representing Holmes, who was there to present in evidence several summary exhibits, such as the number of patents awarded to Theranos, the total of client receipts from the company and the number of tests offered by Theranos.
One of the clearest examples of potential fraud presented by the prosecution came in the form of manipulated lab reports that Theranos sent to investors and the media. The company sent the results of its own tests to potential pharmaceutical partners, Pfizer and Schering-Plow. He would then affix the logos of those companies to the reports and represent them as having been validated and approved by those companies, prosecutors argued.
Witnesses said Holmes said the company’s devices were used by the military on medevac helicopters during battlefield operations. That was never the case, former Defense Secretary Jim Mattis, former Theranos board member, said during the trial.
In addition to former investors, employees and board members, jurors also heard testimony from journalist Roger Parloff, whose Fortune magazine cover, subsequently retracted, on Holmes helped bolster his reputation and was included. in investor filing cabinets. Prosecutors argued Holmes made numerous false statements to him prior to the article’s publication, which led to the article perpetuating lies and inaccuracies which the company exploited to advertise and invest .
In 2004, Holmes left Stanford University at age 19 to pursue the idea of ​​inventing a microfluidic blood diagnostic system that could quickly perform a multitude of tests on a simple finger prick, instead of the standard venous swabs used. by commercial laboratories. After securing investments and media accolades, she became the world’s youngest self-made billionaire woman and her business was valued at over $ 9 billion.
Then it all fell apart after a series of skeptical Wall Street Journal articles in 2015 and 2016 revealed that the company was actually running its tests on spoofed third-party equipment instead of its own proprietary devices.
Due to the deficiencies of the Theranos lab and the fact that it had to massively dilute the finger-prick samples to be run on the large commercial machines built to analyze venous blood samples, Theranos gave patients false results, a reported the Journal.
The results led a pregnant patient to believe she was going to have a miscarriage. An Arizona man identified as RC in a class action lawsuit alleged that Theranos’ erroneous sugar and lipid test results led his doctors to not change his drug regimen, which he said led to to his heart attack.
Some results also indicated that some patients had a marker that they would normally only have if they had a prostate, which women do not have. The company later canceled tens of thousands of patient results, including every test performed on its own machines.
If found guilty, Holmes and her co-accused and former boyfriend Ramesh “Sunny” Balwani face up to 20 years in prison each, a fine of $ 250,000, plus restitution, according to the indictment.
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