Elizabeth Holmes’ criminal fraud case goes to the jury as the closing arguments are closed
In dueling concluding arguments spanning two court days, the prosecution and the defense presented strikingly different depictions of Holmes. The prosecution described her as an experienced leader who deliberately chose to mislead investors, doctors and patients to take their money and prevent the start-up of blood tests from failing. Holmes’ defense portrayed her as a well-meaning entrepreneur who worked hard to build a technology that she believed had enormous potential.
“The parties agree that Holmes worked hard, that she wanted Theranos to succeed,” said prosecutor John Bostic in his refusal to the defense’s closing argument on Friday. “The defense cites it as a reason to doubt Holmes̵[ads1]7; intention to deceive in this case. But that was actually her motive,” he added.
When the arguments back and forth were concluded on Friday, the judge read out jury instructions, which give jurors a set of guidelines to see their potential verdict. The jury members were handed over the case around 16.45 local time, and they will return on Monday at 08.30 to discuss.
Holmes, once hailed as the next Steve Jobs, now faces nine counts of federal wire fraud and two counts of conspiracy to commit wire fraud. If convicted by the jury, Holmes faces up to 20 years in prison and a fine of $ 250,000 plus redress for each count of wire fraud and each conspiracy count. She has pleaded guilty.
In his closing remarks Thursday and Friday, Holmes’ lawyer, Kevin Downey, tried to undermine the government’s case by painting Holmes as a committed entrepreneur who “gave up youth” as well as her friends and her close relationship with her family “because she she thought she was building a technology that would change the world. ” Downey concluded by emphasizing that Holmes remained on Theranos until the end and “went down with that ship when it went down.”
Downey’s remarks were based on his arguments the day before, in which he portrayed Holmes as a young entrepreneur “building a business, not a criminal enterprise.” He crossed off evidence that he said showed she lacked the will to cheat. To convict Holmes, the prosecution must convince the jury of her intent.
“You know from your own experience and from your own common sense how you assess people’s intentions,” he said towards the end of his comments on Friday. “And you know that at the first sign of trouble, the villains take out, criminals cover up and rats leave a fleeing ship.”
The prosecution, on the other hand, emphasized that Holmes made a choice to lie to investors when her start-up for blood sampling ran out of money. “She chose fraud over business failure,” prosecutor Jeffrey Schenk said in his first closing remarks Thursday.
Bostic returned to the alleged misleading approach to Holmes and her company in his rebuttal. “The disease that plagued Theranos was not a lack of effort,” he said, “it was a lack of honesty.”
From the boardroom to the courtroom
Holmes, now 37, dropped out of Stanford in 2003 at the age of 19 to start what would become Theranos. A decade later, she took veils off the company, proposes to the press and claims a Walgreens partnership while claiming to have invented technology that can accurately and reliably test for a variety of conditions with just a few drops of blood. She raised $ 945 million from investors, slammed the company worth $ 9 billion, and made herself a paper billionaire.
The trial was first indicted more than three years ago, and was delayed by the pandemic and the birth of her first child. Public interest in Holmes has not waned since her fall. There are documentaries, an upcoming limited series and a planned feature film.
At 3:15 a.m. local time Friday, 34 members of the public and press had already lined up outside the federal courthouse in San Jose where the trial is taking place. There are only 34 seats available, plus an additional approximately 45 seats in an overflow room. The trial will not be televised.
How Holmes’ defense tried to convince the jury
In his comments on Friday, Downey tried to cast doubt on some of the prosecution’s testimony, emphasizing that the jury members only heard from three patients and pointed the finger at others to try to show Holmes’ innocence.
In particular, Downey said that some Theranos investors called as witnesses by the government either did little due diligence or did extensive investigations, but decided to invest in Theranos nonetheless. A common feature of all of them, Downey suggested, was that they knew others related to Theranos, and they were particularly interested in the retail collaboration with Walgreens, not because they were influenced by details such as the number of fingerprint tests Theranos performed.
Downey has previously pointed to evidence that he said shows Holmes had nothing to hide. He told jurors that Holmes did not hide the truth about the company’s test methods for regulators or her board (which the government disputes), that Holmes was not afraid to submit Theranos’ technology to outsiders, and that when a regulatory revision found significant problems in the laboratory , she wanted to have them addressed, including agreeing to cancel two years of blood tests at the suggestion of Theranos’ laboratory director.
“You will see that there are many innocent incidents, and only when you look at the government’s lens and look through the government’s eyes will you see any malicious intent or bad behavior,” Downey said Thursday.
On both days, Downey projected a picture of a staircase, illustrating the eight levels he said jurors had to climb in their minds to judge Holmes. Bottom: «no proof». Further up: «reasonable proof». And at the very top: “beyond a reasonable doubt”.
“If someone acts in good faith or someone does not believe that what they are doing is in fact part of a scheme to defraud, then the right verdict is a not guilty verdict,” Downey told jurors Thursday.
The prosecution’s case
“Fraud is in a way like a lead on the truth. For a long time, Holmes and Balwani knew the truth,” Schenk said Thursday, referring to Ramesh “Sunny” Balwani, the company’s COO and president who was also Holmes’ girlfriend at the time of the alleged fraud.
Balwani and Holmes were indicted together, but their trials were interrupted when she indicated that she would take a stand to testify that she was a victim of their decades-long violent relationship. Balwani has denied the abuse allegations in the court documents. He is due to appear in court early next year and has also pleaded guilty.
“They knew what Theranos could do and what it could not do, and the people they interacted with, the investors and the patients, did not. And they took advantage of that kind of information gap,” Schenk said. “And for that they were capable of committing fraud, and because of that you should find Elizabeth Holmes guilty of the alleged offenses.”
