SAN JOSE, Calif. — For four days, Elizabeth Holmes took the stand to blame others for the alleged fraud at her blood testing start-up, Theranos. On the fifth day, prosecutors tried making one thing clear: She knew.
Over more than five hours of cross-examination on Tuesday, Robert Leach, the assistant U.S. attorney and lead prosecutor for the case, pointed to text messages, notes and emails with Ms. Holmes — and with her business partner and former boyfriend, Ramesh Balwani — discussing problems with Theranos’s business and technology. Mr. Leach had a common refrain: No one hid anything from Ms. Holmes. As Theranos’s chief executive, he argued, she was to blame.
“Anything that happens at the company was your responsibility at the end of the day?” Mr. Leach asked.
“That’s how I felt,” Ms. Holmes said.
It was the culmination of three months of testimony and four years of waiting since Ms. Holmes was indicted on charges of wire fraud and conspiracy to commit wire fraud in 2018. Prosecutors have shown jurors evidence of faked product demonstrations, falsified documents and communications with the goal of showing that Ms. Holmes knowingly misled investors, doctors, patients and the world about Theranos.
The outcome of her case has consequences for the tech industry at a moment when fast-growing start-ups are amassing wealth, power and cultural cachet. Few start-up founders have been prosecuted for misleading investors as they strive to hustle their long-shot business ideas into existence. If convicted, Ms. Holmes, 37, who has pleaded not guilty, faces up to 20 years in prison.
Theranos rose to a $9 billion valuation in 2015, raising $945 million on Ms. Holmes’s promise that its blood testing machines could perform hundreds of tests quickly and cheaply using just a few drops of blood. She started the company in 2003 after dropping out of Stanford University.
But in reality, prosecutors have argued, Theranos’s machines could conduct only a dozen tests, and those were unreliable. Instead, it secretly used commercially available machines from Siemens. After that and other misrepresentations were exposed, Theranos voided two years’ worth of blood test results. It also settled lawsuits with investors and the Securities and Exchange Commission, ultimately dissolving in 2018.
Who’s Who in the Elizabeth Holmes Trial
Who’s Who in the Elizabeth Holmes Trial
Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Here are some of the key figures in the case →
Who’s Who in the Elizabeth Holmes Trial
Holmes founded Theranos in 2003 as a 19-year-old Stanford dropout. She raised $945 million from investors and was crowned the world’s youngest billionaire, but has been accused of lying about how well Theranos’s technology worked. She has pleaded not guilty.
Who’s Who in the Elizabeth Holmes Trial
Ramesh Balwani, known as Sunny, was Theranos’s president and chief operating officer from 2009 through 2016 and was in a romantic relationship with Holmes. He has also been accused of fraud and may stand trial next year. He has pleaded not guilty.
Who’s Who in the Elizabeth Holmes Trial
David Boies, a prominent litigator, represented Theranos as its lawyer and served on its board.
He tried to shut down whistle-blowers and reporters who questioned the company’s business practices.
Who’s Who in the Elizabeth Holmes Trial
The journalist John Carreyrou wrote stories exposing fraudulent practices at Theranos.
His coverage for The Wall Street Journal helped lead to the implosion of Theranos.
Who’s Who in the Elizabeth Holmes Trial
Tyler Shultz and Erika Cheung are former Theranos employees and were whistle-blowers. They worked at the start-up in 2013 and 2014.
Shultz is a grandson of George Shultz, a former secretary of state who was on the Theranos board.
Who’s Who in the Elizabeth Holmes Trial
James Mattis, a retired four-star general, was a member of Theranos’s board.
He went on to serve as President Donald J. Trump’s secretary of defense.
Who’s Who in the Elizabeth Holmes Trial
Edward Davila, a federal judge for the Northern District of California, will oversee the case.
Kevin Downey, a partner at the Washington law firm Williams & Connolly, is the lead lawyer for Holmes.
Robert Leach, an assistant United States attorney for the Northern District of California, will lead the prosecution for the government, along with other prosecutors from the U.S. attorney’s office.
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