San Jose, California – Taking a deep breath, Elizabeth Holmes His face crumpled for a while as he spoke, his voice cracking.
Ramesh BalwaniMs Holmes testified in court on Monday. He was controlling, she said, scheduling every minute of the food he ate, and keeping it away from his family. And he forced her to have sex with him against his will, she said.
“He’d force me to have sex with him when I didn’t want to because he said he wanted me to know that he still loved me,” Ms Holmes cried on the stand.
it was the most dramatic moment in a three month trial, accusing Ms Holmes of lying and counterfeiting millions of dollars for her failed blood testing start-up, Theranos. Since September, prosecutors have tried to show the jury that Ms. Holmes, who presented herself in public A Terrible Kind of Business and Technology, misled investors, doctors and patients about the efficacy of Theranos’ blood testing technology.
She was charged in 2018 with Mr Balwani, better known as Sunny, her secret lover for more than a decade and former chief operating officer of Theranos. Last year, Ms. Holmes’ attorneys successfully argued for splitting their fraud cases; Mr. Balwani will be tried next year. At the start of her trial, Judge Edward Davila of the US District Court for the Northern District of California, who is overseeing the case, instructed jurors not to speculate as to why Mr. Balwani was not present. Both have pleaded not guilty.
The test has been held up as a parable of Silicon Valley hubris and the “fake it until you make it” culture has been taken to an alarming extreme. Few start-up founders who spread the truth to raise money or secure business deals have ever been accused of fraud. A guilty verdict could prompt regulators to crack down on the tech industry at a time when it has amassed enormous wealth and power. Ms Holmes faces 20 years in prison if convicted.
With new allegations about her relationship with Mr Balwani, Ms Holmes has potentially turned the story around her alleged wrongdoing and the jury’s perception of what happened. So far, her lawyers have described Ms. Holmes as young, inexperienced and unfit to run a research laboratory. They have only indicated the role of Mr. Balwani in the fraud.
Ms. Holmes’ attorney, Lance Wade, said in an opening statement in September: “One of his mistakes was to rely on and rely on Mr. Balwani as his primary adviser.”
Mr Balwani has denied all allegations of misconduct. His lawyers did not immediately respond to a request for comment.
Ms. Holmes also testified on the stand on the fourth day in her trial that her comments were misunderstood about Theranos’ ties to the military – which the start-up once said it had a contract with, even though it was not. It said it did not intend to mislead anyone during technical demonstrations or inspections. And he said others were responsible for the day-to-day management of Theranos’ lab.
But it was overshadowed by details of her relationship, which she hid from the public while Theranos was on its fast-moving trajectory for a valuation of $9 billion. theranos collapsed in 2018 The company’s two-year trial results came to naught after a regulatory action.
For months, trial watchers have wondered whether Ms. Holmes will point the finger at Mr. Balwani as part of her defense, as her lawyers have indicated in filings that she might. They have also said they hope to call on Mindy Mechanic, an expert witness who can testify about intimate partner abuse, to explain Ms Holmes’ allegations.
Blaming your relationship with Mr. Balwani is a risky tactic that could backfire, said David M. Ring, a civil trial attorney specializing in sexual assault and abuse cases.
“Elizabeth Holmes, to this day, has presented herself as the epitome of confidence – this brilliant, composed entrepreneur – and now all of a sudden she is telling us, ‘I was the puppet and Sunny Balwani was the puppet,’” he said. But if the jury finds his account credible, “it’s going to go a long way to an acquittal.”
Ms. Holmes met Mr. Balwani when she was 18, when she moved to China through Stanford University. He is 20 years older than her. After Ms. Holmes dropped out to start Theranos in 2003, she contacted Mr. Balwani, who consoled her after she said she had raped a student at Stanford.
“He said I was safe now that I had met him,” said Ms. Holmes. They started living together and Mr. Balwani joined Theranos in 2009.
As Theranos grew up, Ms. Holmes presented herself as self-confident and laid-back. But behind the scenes, he said, Mr. Balwani criticized and controlled him, prompting him to follow a strict daily regimen of prayer, principles and green juices.
“He told me I didn’t know what I was doing in business, that my beliefs were wrong, that he was amazed by my mediocrity and that I was going to fail if I followed my instincts,” she said. said, pausing to wipe his nose as he tore it.
He said Mr Balwani would often tell her to kill off her old personality and “become the new Elizabeth” in order to be successful in business.
Notes taken by Ms. Holmes on her iPhone at the time backed up her account. “There is literally nothing to enjoy about this or who I am if I did. It hurts a lot. How much more,” read one written after Mr. Balwani’s alleged assault.
It moved out in 2016, she said, after regulatory oversight revealed major problems in Theranos’ lab. Until that time, she said, she believed Theranos’ technology worked. The inspection prompted him to look at Mr. Balwani with a different perspective. “He wasn’t who I thought he was,” she said.
Presenting such a defense complicates the prosecution’s case against Ms. Holmes. Throughout the trial, he tried to tie the alleged fraud in Theranos to Ms. Holmes by showing her emails and text messages informing her of the company’s problems.
Former employees have testified that she was a practical leader who meticulously managed things like marketing copy and took charge in meetings with investors and partners. In earlier testimony, Ms. Holmes admitted that she had personally added drug companies’ logos to reports sent to investors without the drug makers’ permission.
Prosecutors also played a video of Ms Holmes discussing Theranos’ problems in a TV interview. “I am the founder and CEO of this company,” she said. “At the end of the day everything that happens in this company is my responsibility.”
But on Monday, Ms Holmes portrayed herself as a young woman manipulated by a controlling elder boyfriend who took responsibility for her success.
“It affected everything about who I was and I don’t fully understand it,” she said, stuttering at the word “I.”