The proceedings for the criminal fraud trial of Theranos founder and CEO Elizabeth Holmes escalated on Monday as Holmes’ defense team cross-examined an angry investor.
Holmes is charged with 12 counts of defrauding investors of hundreds of millions of dollars, as well as doctors and patients, by making false and misleading claims about the now defunct company’s blood testing technology .
Using several emails sent by Alan Eisenman, a Houston investor who, along with his family, invested nearly $ 1.2 million in Theranos in 2006 and $ 99,990 in 2013, the defense established that ‘Eisenman had repeatedly requested information beyond what Theranos was sending to his investor group as a whole. .
Eisenman admitted last week and again on Monday that he had no “legal rights” to the news feed he was seeking. He dismissed a statement by defense attorney Kevin Downey that Holmes and his alleged business partner and co-conspirator, Sunny Balwani, had become “frustrated” by his constant emails and calls, claiming instead that Holmes was “hiding” informations.
Eisenman also took offense when shown an email from Holmes asking him to stop “harassing” the chairman of the board of Theranos, calling it “total misrepresentation.”
But the fireworks really started when the defense pointed out that Eisenman’s “model” of sending out numerous emails lasted until last weekend. Following his testimony last Wednesday, Eisenman asked prosecutors if he could return to Texas until his questioning resumed in court.
Prosecutors said yes, but warned Eisenman not to contact any of the lawyers or parties in the case, a directive he said he understood. Downey then showed Eisenman an email he sent prosecutors less than 15 hours later on Thursday, in which, Eisenman agreed, he “offered some thoughts on the testimony he had given the day before.”
This email prompted a call from the FBI agent attending the trial, telling Eisenman, once again, not to contact the prosecution about the trial.
Undeterred, Eisenman sent prosecutors yet another email the next day, which prompted another call from the government team, this time from Assistant U.S. Attorney John Bostic, again telling Eisenman to stop all communications. Eisenman argued with Downey over whether the second email was a “communication,” claiming it was only about his travel arrangements, not the substance of the matter, and that he was “a smart guy. “who could make the difference.
Returning to the issue of Eisenman’s investments in Theranos, Eisenman agreed with Downey that, by the time he was offered a second opportunity to invest in the company in 2013, his relationship with Balwani had “been very hostile” for. a few years.
Eisenman testified that he did not recall speaking with Holmes until the second investment. But he insisted that Balwani told him the Theranos technology was working and “encouraged” him to invest a second time.
Eisenman did not back down even when shown an email in which Balwani reminded Eisenman that prior to the 2013 investment, Balwani explained “in detail that you won’t get any updates, that you should not invest and management will NOT spend with you at all times, providing you with updates and responding to your emails on business operations, strategy and details.
Eisenman said the idea of ââBalwani saying these things “was ridiculous.”
Judge Davila intervened several times during the back and forth, telling Eisenman at one point, “Reset,” when his continued conversation with Downey caused the court reporter to put his hands up.
Downey ended his questioning by questioning Eisenman about an email he sent to the prosecution in which he said he was a “loyal member of the team,” implying that Eisenman is biased.
Eisenman said his own email was “a little misleading” and that “faithful” was a “subjective clause”, explaining that he and the prosecution shared “the same goal, that justice be done”. Eisenman then said he “had no bias in the case,” a comment Judge Davila ordered to be struck off. Prosecutors announced last week that they would complete their case against Holmes before the end of this week.