Theranos Founder’s Fraud Trial Begins In California

World

The fraud trial of biotech star Elizabeth Holmes opened Wednesday in California, and prosecutors claimed she told grandiose lies to mislead investors in her billion-dollar company, as her defense said she simply committed. mistakes.

When he launched the diagnostic firm Theranos in 2003 at age 19, the charismatic Holmes promised faster and cheaper results than traditional labs, with an analytical range using just a few drops of blood.

The problem, prosecutors say, is that the tests did not deliver as promised, and he now faces fraud charges that could carry decades in prison.

“This is a case about lying and cheating to get money,” US Attorney Robert Leach told the jury during his opening arguments in the heart of Silicon Valley, the city of San Jose.

“The defendant’s fraudulent scheme made her a multimillionaire,” he told a courtroom packed with journalists, Holmes’ loved ones and large legal teams.

But his powerful defense argued that Holmes dedicated his life to Theranos and was not the “villain” prosecutors claimed; instead, he had made mistakes, including the company he maintained.

“Theranos failed in part because it made mistakes, but mistakes are not crimes. A failed business does not turn a CEO into a criminal,” attorney Lance Wade told the jury.

The defense has also alleged in the documents that Holmes was psychologically abused and controlled by her business partner and ex-boyfriend Ramesh “Sunny” Balwani, who is being tried separately.

“You will hear that trusting and relying on Balwani as his main advisor was one of his mistakes,” Wade told the jury.

Holmes was a global tech celebrity whose multi-billion dollar startup seemed set to revolutionize medical testing before it collapsed and caught fire in a series of fraud allegations.

The 37-year-old is facing charges of wire fraud and conspiracy to commit wire fraud. If found guilty, she could be jailed for up to 20 years.

She and Balwani, the former COO of Theranos whom she dated for a time, are charged with conspiring to defraud Theranos investors and clients.

From ‘visionary’ to ‘villain’

During the jury selection last week, Holmes’ attorney, Kevin Downey, asked potential members if they had experience with “intimate partner abuse,” indicating the defense’s plans to raise the issue.

Prosecutor Jeffrey Schenk of the United States Attorney’s Office is expected to ask medical professionals to undermine that notion.

When the first day of testimony concluded, Judge Edward Dávila warned jurors to avoid reading news of the case. Procedures were to resume on Friday.

Political figures like Henry Kissinger and former defense secretary James Mattis were drawn to the company’s board of directors, and media mogul Rupert Murdoch invested cash in what appeared to be a sure winner.

Mattis, Murdoch and Kissinger are on a list of possible witnesses presented in court by prosecutors.

Holmes was praised as a visionary, drawing comparisons to Apple founder Steve Jobs.

But years of hype, and billions of dollars later, those promises didn’t mix – the miracle machines didn’t work.

And, prosecutors say, Holmes knew it, but continued to lie to investors, doctors and patients in order to raise more than $ 700 million for the company.

At one point, he had an estimated net worth of $ 3.6 billion, according to Forbes magazine. At the time, she was the youngest billionaire to not have inherited his fortune.

In 2018, the Securities and Exchange Commission presented Theranos case as a lesson for Silicon Valley, a warning against the “fake it until you get it” culture.

The trial was postponed several times, most recently because Holmes had a son in early July.

(AFP)

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