Theranos founder Elizabeth Holmes, once Silicon Valley wunderkind who dazzled investors with her health technology startup, was a passionate and hardworking executive blinded by her dedication and drive to succeed — not a liar, her lawyers have argued.
“Elizabeth Holmes worked herself to the bone for 15 years trying to make lab testing cheaper and more accessible,” defense attorney Lance Wade said. “Now, in the end, Theranos failed. And Ms. Holmes walked away with nothing. But failure is not a crime. Trying your hardest and coming up short is not a crime.”
The remarks were made late Wednesday morning as a part of Wade’s opening statement during the first day of Holmes’ fraud trial. She was indicted alongside former Theranos Chief Operating Officer, Ramesh “Sunny” Balwani, in 2018 for defrauding investors, doctors and patients by falsely claiming her company, once valued at $9 billion, could revolutionize medical lab testing with a unique technology, created to distribute a wide range of tests with just a few drops of blood.
The pair have since pleaded not guilty to charges including two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.
Wade acknowledged before jurors that Holmes, a new mother, made mistakes in running her tech company, including trusting Balwani, who is also her ex-boyfriend. In court documents unsealed just before the trial, the defense argued Holmes’ role in the scheme was heavily influenced by an allegedly abusive relationship she at one point shared with the former COO.
Without going into specifics, Wade accused Balwani of “intimate partner abuse,” adding that, at the time, Holmes believed she was bringing in “the best businessman she knew.”
“You will learn that Mr. Balwani did not take well to people who disagreed with him,” Wade said while asserting Balwani, who also oversaw the Theranos Lab, was the source of much tension that pushed Theranos employees to leave the company.
“Poor operations in the lab was one of Theranos’ biggest failures, but it wasn’t fraud,” he added.
Federal prosecutor Robert Leach in a scathing, 40-minute opening statement on Wednesday cast Holmes in a much darker light, painting a portrait for jurors of a conniving entrepreneur who duped investors, customers and patients for years, even though she was fully aware her much-hyped blood-testing technology was a bust.
“This case is about fraud, about lying and cheating to get money,” Leach said during his roughly 45-minute opening statement.
Some 200 witnesses, including those who received inaccurate test results relating to conditions such as HIV, cancer and miscarriages, are slated to take the stand.
Leach said evidence would also show that Theranos was struggling as far back as 2009, about six years after Holmes founded the company, based in Palo Alto, Calif. He accused of Holmes of relying on a pattern of lying and hyperbole as a means to trick major media outlets, wealthy investors, well-connected Theranos board members like former U.S. Secretaries of State George Shultz and Henry Kissinger, and customers such as Walgreens.
A Stanford University dropout, Holmes founded Theranos in 2003 when she was only 19 years old. Over the years, she transformed into a media darling, sporting dark turtlenecks like Steve Jobs, and nabbed impressive investors like Henry Kissinger and Rupert Murdoch. She was also briefly dubbed the world’s youngest self-made billionaire before a series of damning articles published in 2015 by the Wall Street Journal revealed her most of Theranos’ samples were actually sent out to outside parties using standard-issue machines he described as “big” and “clunky.”
The company collapsed in 2018, and Holmes later that year settled with the Securities and Exchange Commission to pay $500,000 without admitting or denying the charges.
Her rise and fall has already been the subject of countless documentaries, books and podcasts, feeding the fervor surrounding the highly-anticipated legal proceedings.
If convicted at the end of what is expected to be a months-long trial, Holmes faces up to 20 years in prison. Balwani faces multiple fraud charges in a separate trial scheduled to begin next year. His attorney has denied Holmes’ allegations
With News Wire Services
