San Jose, Calif. , Elizabeth Holmes, the founder of failed blood testing start-up Theranos took a stand for the fifth day on Tuesday to defend himself in a fraud trial that has been billed as a test of start-up pride and hype.
Ms. Holmes faces 11 charges Fraudulently defrauding patients, doctors and investors by lying about Theranos’ technology and business relationships. He has pleaded not guilty.
Before Theranos collapsed, it was a Silicon Valley darling that promised to revolutionize health care through cheap, simple blood tests that took only a few drops of blood. Ms. Holmes raised nearly $1 billion from investors and was announced as the next Steve Jobs. but 2015 investigation The Wall Street Journal revealed that Theranos’ blood testing technology wasn’t working, and the start-up got busted.
In the first 11 weeks after Ms. Holmes’ trial, Prosecutors called 29 witnesses, She testified that Ms. Holmes and Theranos falsified reports, concealed the use of third-party blood testing equipment, made fake technology demonstrations and exaggerated the company’s marketing claims.
To refute those arguments, Ms. Holmes, 37, took a stand on 19 November. In her first few days of testimony, she blamed others, saying she was a true believer of Theranos’ technology and that her decisions were misunderstood. Ms. Holmes’ attorney, Kevin Downey, portrays her client as a fine entrepreneur whose actions to protect the company were turned into fraud by prosecutors.
Here’s what happened in Ms. Holmes’ testimony:
prosecutor take aim
Under cross-examination on Tuesday, Ms Holmes admitted to occasional mistakes. He said the Journal’s handling of Theranos’ claims was a “disaster”.
“We totally messed it up,” she said.
Ms. Holmes also admitted, after the provocation, that whistle-blowers, including former Theranos employees Tyler Schultz and Erica Cheung, were right when they talked about problems in the start-up’s lab.
In other instances, Ms. Holmes pushed back, blaming her actions on Theranos’ desire to protect trade secrets. She said she had not tried to “intimidate” John Carrerou, the journal reporter who exposed the company’s flaws, or Ms Cheung and Mr Schultz, Mr Carrerou’s sources.
“We wanted to make sure that our trade secrets were not disclosed,” she said.
In many cases, Ms. Holmes said she simply did not remember. He didn’t remember whether Mr. Carrerou’s legacy was mocked, how many tests Theranos had done at the time of Mr. Carrerou’s article, or what his salary was. Prosecutor Robert Leach frequently pulled up text messages and emails to refresh her memory.
allegations of abuse
Ms Holmes closed her testimony on Monday with blaming allegations of abuse against her boyfriend of more than a decade, Ramesh Balwani, who worked at Theranos and accused as a co-conspirator in the fraud. He said that Ms. Balwani, who accompanies Sunny, was emotionally and physically abused, she said.
Ms Holmes said Mr Balwani often criticized her and controlled what she ate and her schedule. He kept her away from her family because they were a distraction. And he told her to “kill” her old self in order to be reincarnated as a new, successful entrepreneur.
He also accused of rape. “He used to 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,” she said through tears.
Mr. Balwani left the company in 2016 after a regulatory oversight discovered major problems in Theranos’ lab. Around that time, Ms. Holmes moved out, she testified. “He wasn’t who I thought he was,” she said.
Ms. Holmes said her impact on him was so profound that she didn’t even know how to measure it. “It affected everything about who I was, and I don’t fully understand it,” she said.
Mr Balwani’s lawyers have denied all allegations of misconduct. Mr Balwani, who is facing his own fraud trial next year, has pleaded not guilty.
fake verification report
A key moment in the trial occurred on the third day of Ms. Holmes’ testimony, when she said she had Personally Added Pharmaceutical Company Logos For Theranos report, which was then used to persuade investors and partners to work with its start-up.
Prosecutors have withheld the report as evidence that Ms Holmes lied about Theranos’ prospects. The report carried logos from drugmakers Pfizer and Schering-Plough, even though neither company had a hand in preparing or approving the report, and both recommended against using Theranos’ technology.
In her testimony, Ms. Holmes said she added drugmakers’ logos to the report “because this work was done in partnership with those companies and that’s what I was trying to convey.” She argued that she did not intend to defraud anyone and would have acted differently if she knew that investors and partners would see the logo as endorsement by drugmakers.
Ms. Holmes has spent much of her testimony arguing that others at Theranos were to blame for the company’s shortcomings.
She said that Theranos’ lab director Adam Rosendorff was responsible for the diagnostic lab, and that a vice president, Daniel Young, was in charge of the partnership with pharmacy chain Walgreens. She also highlighted the experience of her star-studded board of directors, which means they should have given her better advice.
Ms. Holmes’ understanding of Theranos’ technology was that “it performed well,” she said.
When Mr. Downey brought up a study by Johns Hopkins University scientists that concluded Theranos’ technology was “novel and sound”, Ms. Holmes said, “Our team was really excited about it. Were some of the best laboratory experts in the world.”
For Ms. Holmes to be convicted, prosecutors must prove that she intended to commit fraud. On the stand, Ms. Holmes has consistently stated that she did not intend to deceive anyone.
She said she hid Theranos’ use of third-party tools — one of the key charges against prosecutors against her — because she was concerned that others would copy the modifications Theranos made to those tools. He also said that he did not intend to hide that Theranos’ own machines could not perform as many tests as he claimed.
“It was an invention that we understood in our consultation that we had to protect it as a trade secret,” said Ms. Holmes.
He said Theranos’ marketing claims were intended to set the start-up’s brand apart from its larger partners. Ms. Holmes said she made these claims on the advice of leading advertising agency TBWAChiatDay and did not accept any material she believed to be false.
On Monday, Ms Holmes said she had told Theranos lab workers “absolutely not” to hide anything about the start-up during an oversight by regulators in 2013.