Elizabeth Holmes Rests Defense Case in Theranos Fraud Trial
(Bloomberg) -- Theranos Inc. founder Elizabeth Holmes ended her defense against fraud charges, after several days of testifying at her criminal trial in California before jurors who are likely to begin deciding her fate at the start of Christmas week.
Closing arguments in the case, which began in September, were scheduled for Dec. 16 and could last as long as two days. The judge said he won’t ask jurors to deliberate over the Christmas holiday and apologized for the case taking so long.
The 37-year-old Stanford dropout is accused of lying to investors about the blood-testing machines developed by Theranos, which peaked in valuation of $9 billion before collapsing in 2018. She faces as long as 20 years in prison if convicted.
Over more than six days testifying in her own defense, Holmes deflected blame, offered regrets and tearfully described a decade of alleged abuse by her former boyfriend, Ramesh “Sunny” Balwani, who was her second-in-command at Theranos. Holmes also said she’d been raped while a student at Stanford University.
On Wednesday, she finished her testimony on a high note, telling the jury her vision with Theranos was to change health care and that she never attempted to mislead investors who poured hundreds of millions of dollars into her once high-flying startup.
‘What Was Possible’
Holmes testified that when she asked others to back her company, the understanding was that she was working on a five- to 10-year horizon and “they were interested in what kind of change we could make.”
“I talked about what we created, what it could do, what was possible,” she said, summing up the aspirations she conveyed for the company.
In final questioning from her lawyer, Holmes told the jury she never cashed out on the several hundred million Theranos shares she owned.
In a question from prosecutor Bob Leach, Holmes was asked if investors are “entitled to truthful answers about Theranos’s capabilities?”
“Yes, of course,” she replied.
Over the course of her testimony, Holmes has blamed Balwani for failures at the Theranos labs and for rosy financial forecasts.
On Wednesday, Holmes depicted Balwani as frequently angry and prone to seizing control of various aspects of company operations.
While prosecutors have tried to cast doubt on the notion that Balwani was hiding his actions, Holmes sought to show that he was often ornery and critical of her performance as chief executive of the blood-testing startup.
Balwani would “blow off steam or vent through texts,” Holmes said, adding that “I was trying to be supportive.”
Sometimes he would personally take over whatever area he was upset about, including the company laboratory, she said.
After her testimony was concluded, Prosecutor Bob Leach told U.S. District Judge Edward Davila he’ll file a motion requesting that the jury disregard what Holmes said about “an incident” while she was a student at Stanford.
The testimony about “events in 2003” and an “incident at Stanford” should be stricken from the record, Leach said. Holmes testified tearfully Nov. 29 that she had been raped while at the university.
Leach argued the testimony isn’t relevant to Holmes’s defense after her lawyers opted not to call a psychologist as an expert witness to explain to the jury how trauma may have affected the entrepreneur’s mindset around the crimes she’s accused of committing. Prosecutors declined further comment.
Kevin Downey, a lawyer for Holmes, said he was surprised the government didn’t object to the testimony at the time Holmes presented it. “We’ll await the motion,” he said.
The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Jose).
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