Fraud trial begins against Theranos founder Elizabeth Holmes

Fraud trial begins against Theranos founder Elizabeth Holmes
© Getty Images

The fraud trial for Theranos founder Elizabeth Holmes began in San Jose, Calif., on Wednesday, with the prosecution and defense delivering opening arguments in the highly anticipated case.

Holmes and Ramesh “Sunny” Balwani, the former president and chief operating officer of Theranos and at one point Holmes’s boyfriend, were both charged with two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.

Prosecutors alleged that the company, which claimed to have technology that could conduct clinical tests on small amounts of blood, defrauded investors and patients.

ADVERTISEMENT

Both have pleaded not guilty to the charges against them. Balwani is set to go on trial next year.

Holmes appeared in court on Wednesday for the first day of her trial, which is expected to last 13 weeks, according to The Washington Post.

Assistant U.S. Attorney Robert Leach, the lead prosecutor, said the case involving Theranos is “about fraud, about lying and cheating to get money” during his opening statement, according to CNN.

“Out of time and out of money, the defendant decided to mislead,” Leach added.

Leach told jurors that Holmes knew some results from the blood tests processed with Theranos’s technology were inaccurate, according to The Wall Street Journal.

He also said the company for months did not tell patients that the tests were inaccurate and in a number of instances never responded to patients who asked about their results.

“In the course of doing so, she skewed the medical decisions of patients, and she put them at risk,” Leach said.

The defense in its opening statement sought to prove that Holmes was a hard worker and truly wanted to develop health care.

“Elizabeth Holmes did not go to work every day intending to lie, cheat and steal. The government would have you believe her company, her entire life is a fraud. That is wrong. That is not true,” attorney Lance Wade said, according to the Post.

He said the founder “worked herself to the bone” to bring down the cost of lab testing and make the process easier.

The defense also pointed to Balwani, whom Holmes met in 2002, when she was 18 years old and he was 37, as one of the driving factors behind the failure of Theranos.

“You’ll hear that trusting and relying on Mr. Balwani as her primary adviser was one of her mistakes,” Wade said.

The attorney suggested that more testimony will focus on Balwani, telling jurors, “Like with most personal relationships, there was another side to it that most people never saw. You’ll have to wait for all of the evidence and then decide how to fairly view that relationship in full.”

NPR reported last month that Holmes is expected to argue in trial that she suffered abuse from Balwani, which influenced her ability to make decisions.

Holmes started the company when she was a 19-year-old student at Stanford University before dropping out of school.

The company fell apart in 2018, almost three years after news reports surfaced regarding the company’s operations and the faulty effectiveness of its tests.

If convicted, Holmes faces up to 20 years in prison.