Holmes Lawyer Urges Jury to ‘Doubt’ Fraud at Trial’s End
(Bloomberg) -- A lawyer for Elizabeth Holmes argued the Theranos Inc. founder was “building a business and not a criminal enterprise,” and asked jurors at her trial not to find her guilty if they have any doubts about the evidence against her.
“If you have a reasonable doubt as to whether Ms. Holmes committed any element of the offense, you should find her not guilty,” attorney Kevin Downey said.
Downey started addressing the jury of eight men and four women Thursday afternoon after a federal prosecutor spent hours reviewing the evidence presented over three months that he said proves the former chief executive officer of the blood-testing startup defrauded investors and patients.
Closing arguments in the trial that began in San Jose, California, in early September are the last chance for both sides to sway jurors before they begin deliberating. The jury must decide whether the 37-year-old entrepreneur is guilty of fraud and conspiracy charges filed in 2018, the same year Theranos collapsed after previously reaching a valuation of $9 billion.
She faces as long as 20 years in prison if she’s convicted, although a sentence that long is highly unlikely.
“Elizabeth Holmes was building a business and not a criminal enterprise,” Downey said, adding that the government would have jurors believe she told half-truths and lies over “years and years and years.”
In fact, the defense lawyer argued, the company was built by a large group of bright people who “believed in the mission Theranos believed in.” That goal: accurate blood testing that was convenient and more affordable and would “at the end of the day make people healthier.”
Earlier, Assistant U.S. Attorney Jeff Schenk had argued that instead of watching the startup “slowly fail,” Holmes “made the decision to defraud her investors.”
“She chose to be dishonest with investors and patients,” Schenk said.
If Holmes had been honest about Theranos and its prospects, she wouldn’t have told investors that the company’s technology was endorsed by big pharmaceutical companies, or that its blood-testing devices were being used by the military, Schenk said.
Downey argued the government cherry-picked evidence in challenging Holmes’s statement that Theranos technology had been validated by 10 of the 15 largest pharmaceutical companies.
While prosecutors pointed to relationships with Pfizer Inc., Schering-Plough Corp. and GlaxoSmithKline Plc, they failed to mention at least 12 contracts Theranos had with pharmaceutical companies that “in some form or other” examined, used or were trying to validate the company’s blood tests, the defense lawyer argued.
The government omitted Theranos relationships with companies including AstraZeneca Plc, Novartis AG, Merck & Co. and Bristol-Myers Squibb Co. “You heard nothing of this in the government’s case,” he said.
Holmes testified in her defense for seven days, acknowledging she made errors and attempting to pin mismanagement of the startup’s finances and lab operations on her former boyfriend and Theranos President Ramesh “Sunny” Balwani, who she also accused of verbal and sexual abuse.
Schenk told the jury Thursday that the alleged abuse isn’t relevant to the fraud Holmes is charged with.
Whether you find Holmes guilty or not guilty, Schenk said, “you are not saying we do not believe Ms. Holmes” about the abuse. “You do not need to decide whether that abuse happened.”
Balwani, who faces a separate trial on the same fraud charges in February, has pleaded not guilty and has denied the abuse allegations.
The defense team’s closing arguments are set to resume Friday. The jury could begin deliberating later in the day.
The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Jose).
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