Elizabeth Holmes Faces Last-Ditch Chance to Testify at Trial
(Bloomberg) -- Jurors in the trial of Elizabeth Holmes have heard a lot about the Theranos Inc. founder in the past 10 weeks. They may be about to hear from her directly.
Lawyers for the disgraced entrepreneur said in pre-trial filings they expected her to testify as part of a defense that she was abused and controlled by the company’s president, Ramesh “Sunny” Balwani. While her testimony isn’t certain, Holmes’s taking the stand would shake up the sometimes sleepy proceedings in Silicon Valley’s most high-profile court case.
As the prosecution wraps up its case — arguing that Holmes was exceptionally deceptive in building Theranos into a $9 billion company before it collapsed in 2018 — she may have little choice but to testify to convince the jury she’s not guilty.
“The only thing that can overcome mountains of evidence is if the jury believes your client,” said Christina Marinakis, a jury consultant at IMS Litigation Insights in Los Angeles, who has degrees in law and psychology. “It’s your last-ditch effort to get the jury back on your side.”
The trial has showcased evidence of how Holmes dazzled partners and investors with the expectation they would partake in — and reap the profits from — a revolution in health care, even as she knew her blood analyzers were a failed technology.
Witnesses have described deception on a staggering scale, summed up memorably by former Secretary of Defense James Mattis, the onetime Theranos board member and investor.
“There became a point when I just didn’t know what to believe about Theranos anymore,” the retired four-star general testified.
After all that jurors have learned in the almost two months since he took the stand, Mattis’s observation that he was “disappointed in the level of transparency” seems almost charitable.
Holmes is now at the trial’s most anticipated cross-roads: Will she testify in her own defense? And if so, will she blame Balwani, her ex-boyfriend, for the fraud they are accused of orchestrating together?
Most jurors want to hear defendants testify, Marinakis and criminal defense lawyers say. Despite admonitions from judges that defendants shouldn’t be penalized for declining to take the stand, jurors usually assume they’re guilty if they don’t. Jurors are saying to themselves, “If it were me up there as the defendant, if I were innocent, I would want to tell my side of the story,” Marinakis said.
Holmes, who became a mother in July, faces as long as 20 years in prison if convicted. Lance Wade, a lawyer for Holmes, declined to comment.
Holmes needs to reverse the government’s narrative in which prosecutors have hammered away at a handful of particularly damaging and recurring themes, experts say.
Read More: The Spectacular Rise and Fall of Elizabeth Holmes and Theranos
Evidence has shown that Holmes willfully ignored employees and data showing Theranos’s technology was a failure. Jurors have seen and heard how Theranos brazenly lifted pharmaceutical companies’ logos and applied them to reports to show their endorsement of the startup’s testing results when in fact they had rejected it. And the jury has learned how Holmes repeatedly, publicly lied about her company’s machines being adopted by the military — a claim refuted by Mattis.
The untruths were marshaled to forge partnerships with Safeway Inc. and Walgreens, which Holmes in turn used to tell potential investors that Theranos would earn revenue of $140 million in 2014 — and then almost $1 billion a year later.
The actual financial picture was much starker. Holmes’s top financial officer testified that Theranos posted revenue of just $150,000 in 2014. Evidence at trial shows it was even less in 2015.
Still, Holmes stepped up fundraising during that time period, luring some of the wealthiest families in the U.S. that went on to pour hundreds of millions of dollars into the company.
Holmes’s testimony would likely rock the familiar, subdued course the trial has fallen into. The proceeding could be turned on its head by an argument never attempted in a white-collar criminal case: that Holmes couldn’t have formed the intent to defraud patients and investors because she was manipulated and traumatized from abuse by Balwani. The two were intimately involved for years while they worked together at the company.
“If Elizabeth’s lawyers can effectively present her as having been under Sunny’s unhealthy influence and control — or worse — that’s potentially a powerful narrative on the question of intent,” Mark MacDougall, a former federal prosecutor turned criminal defense lawyer.
Several law professors and defense lawyers have said it will be hard for Holmes to pull off this strategy given that she was such a dynamic, highly functional advocate for her company.
It helps Holmes that Balwani, who has denied wrongdoing, faces a separate trial, so that she can point the finger at what lawyers call an “empty seat” in the courtroom and he won’t be there to defend himself. For their part, prosecutors have woven into their case testimony that Holmes, not Balwani, was in charge at Theranos. The move is a preemptive strike against Holmes trying to argue he was in control.
Holmes’s defense lawyers have to be confident that their client — who has established herself, for better or worse, as one of Silicon Valley’s most charismatic characters — can connect with the jury on a personal level.
So far, Holmes has maintained a statuesque poise at trial. She sits upright in a seat between her lawyers, her back not touching her chair, looking straight at each witness. Her mother attends each day, often holding her daughter’s hand. In interactions at the courthouse both are unfailingly courteous to courthouse staff, the public and media.
“If she seems to be respectful of jurors’ time — sitting up in her chair and listening attentively — that’s a strong subliminal message through a long trial,” MacDougall said. “Seeing her close family with her in court every day is also a good thing. It’s not easy to vote to convict when you feel like you have gotten to know and maybe even like the defendant.”
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