Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO

[JackNah_8]

Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO
Alexis Keenan
·Reporter

One of Silicon Valley’s most infamous entrepreneurs, Elizabeth Holmes, is scheduled to stand trial on Aug. 31 to defend accusations that she used her biotech startup, Theranos, to commit criminal fraud.

Holmes, 37, once proclaimed the youngest female self-made billionaire — and featured in Yahoo Finance’s new documentary "Valley of Hype," streaming on Yahoo Finance starting Aug. 30 — faces federal charges of wire fraud and conspiracy to commit wire fraud tied to the collapse of the blood-testing company.

Jury selection is slated to begin Aug. 31, and opening statements are scheduled for Sept. 8.

A central question at trial will be whether Holmes and her former romantic partner and co-defendant, ex-Theranos president and COO, Ramesh "Sunny" Balwani, used Theranos to intentionally defraud private investors into backing the venture, and intentionally defraud patients into purchasing unreliable blood tests.

Between 2013 and 2015, Theranos raised more than $700 million from private investors, and accepted payments from patients who purchased its blood tests offered in certain Walgreens (WBA) stores in Arizona and California.

How much due diligence was actually conducted?

"But this wasn’t, and shouldn’t have been, such 'dumb money'— it came from some very brilliant and accomplished people," Margaret O'Mara, University of Washington history professor and author of "The Code: Silicon Valley and the Remaking of America," told Yahoo Finance in a July interview.

Among Theranos' investors were some of the world's wealthiest investors and some of Silicon Valley's premier venture capital firms, some of who may testify during Holmes' trial.

Legendary investor Tim Draper, head of venture capital firm Draper Fisher Jurvetson, was one of Holmes' earliest investors. Other investors included ATA Ventures, hedge fund and investment management company Partner Fund Management, the Walton Family, the family of former U.S. education secretary Betsy DeVos, media mogul Rupert Murdoch, and Mexican business tycoon Carlos Slim.

Theranos, and other companies like WeWork, O'Mara said, reflect dark consequences that can emerge from a global financial system flush with cash, even when backing comes from influential financial and political leaders.

"I’m interested in understanding how the people who both served on Theranos’ board and invested in the company were persuaded to put their money and reputations on the line for this operation," O'Mara said. "How much due diligence was actually conducted? Was the advice of financial analysts overridden? How much was Holmes' and Balwani's deception, and how much was advisers’ and investors’ irrational exuberance?"

The former CEO and her co-defendant, Balwani, were indicted by a federal grand jury in 2018, but the trial was delayed repeatedly by the coronavirus pandemic and again by Holmes' pregnancy. In 2020, the court granted a motion for the two defendants to be tried separately.

According to prosecutors, Holmes misrepresented to investors and patients that Theranos’s proprietary analyzer known as the TSPU, Edison, or miniLab could accomplish a full range of accurate and reliable diagnostic tests using small blood samples drawn from a finger stick

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Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO

One of Silicon Valley’s most infamous entrepreneurs, Elizabeth Holmes, is scheduled to stand trial in San Jose, California starting September 7 to defend federal criminal accusations that she used her biotech startup, Theranos, to commit financial fraud. Holmes, 37, once proclaimed the youngest...

finance.yahoo.com

This is going to be an interesting case, I doubt we will hear any truth from Holmes.

 

[sprockets]

Watched a video on her a couple of weeks ago. She was amazingly adept at her game and sucked in a LOT of people who should have known better.

 

[GreyCrow]

"I’m interested in understanding how the people who both served on Theranos’ board and invested in the company were persuaded to put their money and reputations on the line for this operation," O'Mara said. "How much due diligence was actually conducted? Was the advice of financial analysts overridden? How much was Holmes' and Balwani's deception, and how much was advisers’ and investors’ irrational exuberance?"

This is the guts of the case right here. There is fraud and there is stupidity.

Walgreens was the impetus of the company going big yet this is the gist of what they were told

Ex-Theranos employee's wife: People like Elizabeth Holmes 'should be in jail': 'The Dropout' ep 2

It was 2009 and Theranos founder and CEO Elizabeth Holmes was in a precarious place. She had an office, employees and a lofty mission, but her company was low on cash.

abcnews.go.com

According to Walgreens’ lawsuit against Theranos, at this initial meeting, Walgreens said that Holmes and Balwani made the claim that the technology was "viable and consumer-ready," and that Theranos Systems were validated under FDA guidelines. Walgreens claimed that Theranos said that the finger-stick technology would be ready to launch to consumers later that year.

Walgreens also said in that court filing that Theranos even claimed their technology had been used by the U.S military in foreign government operations.

The ' ready to launch later that year' is borderline but an understandable comment as they were pitching to get market place - the others are troublesome for them

I think they had a good idea that got away from them and its the cover up that will consume them

 

[JackNah_8]

I watched a documentary about E Holmes a year ago, unbelievable how many people were fooled by her. She sold a great 'fake' idea and got the right backing without any proper research or evidence.

She comes across as a narcissist. She's married to a rich heir and recently had a baby . What timing, just before a court case.

 

[MSB ROYS]

There is an new podcast by the John Carreyrou talking about the upcoming trial and more damning stories for those interested:


As a scientist, I had to shake my head about their small scale blood sampling volume not having enough Ebola RNA copies to amplify for a viable test (Episode 2). Management didn't even allow staff to know what was happening inside the company, let alone the investors. Always undertake due diligence and question everything!

 

[JackNah_8]

Thanks for sharing the podcast.

John Carreyrou:

‘People wanted to believe’: reporter who exposed Theranos on Elizabeth Holmes’ trial

As blood testing startup founder’s fraud trial looms, John Carreyrou says hero worship is still a problem in Silicon Valley

www.theguardian.com

Why do you think it was able to go unchecked for so long?

As Holmes herself has said, Theranos was in stealth mode in its first 10 years, so the company was not on anyone’s radar. It was really only in the limelight for two years before I wrote my first story on the scandal. You could argue that even that was too long because these unreliable and inaccurate blood tests were already available in Walgreens.

There is still a willingness to worship geniuses in Silicon Valley

Sunny [Ramesh Balwani, former president of Theranos, who was also charged with fraud] and Elizabeth were very secretive – they managed that company like it was the CIA. The threat of litigation was always in the air, so employees were worried about speaking out.

So she will try to push the blame onto Sunny even though she knew what was going on Theranos. I am so surprised Theranos managed to stay in business for 15yrs! Unbelievable.

 

[Hojuman]

Aussie guy from Perth does some great vids on you-tube on the Holmes's of this world - Cold Fusion.

One on Dr. Ruja and her " Onecoin " crypto worth watching.

 

[Kurve]

Once a prized member of Silicon Valley, the woman once praised as the youngest self-made billionaire has seen an incomparable fall from grace. Former Theranos CEO, Elizabeth Holmes, has shown signs of psychopathy in her endless pursuit to “democratize healthcare” through blood testing. Charged with fraud in 2018, her scheming ways and the inner working of her mind were both put out on public display for the whole world to see. From the gaze her eyes to her lack of empathy, this may be one of the biggest revelations and outings of a psychopath in recent memory. This documentary will provide a detailed look at her downfall plus which psychological studies back accusations of Holmes displaying psychopathic behavior. She truly is the con in Silicon.

 

[JackNah_8]

Jury:

Theranos founder Elizabeth Holmes will face jury of seven men and five women in fraud trial

After two days of intense questioning, the 12-person jury was selected for the criminal trial of Elizabeth Holmes, who faces up to 20 years in prison.

www.cnbc.com

 

[Kurve]

The defence:

Elizabeth Holmes, the onetime Silicon Valley superstar on trial for conspiracy and fraud, plans to argue that she was a victim of abuse. In newly unsealed court documents, Holmes’ lawyers say the CEO and founder of blood-testing startup Theranos acted at the behest of her business partner and then-boyfriend, Ramesh Balwani.

"Out of hundreds of securities fraud cases, I have never seen this defense."

In the court filings, Holmes’ legal team paints a picture in which Balwani controlled Holmes’ every move and psychologically manipulated her over the course of their 10-year relationship. The two met when Holmes was just 18 and Balwani was 37, and Balwani went on to become Theranos’ president. She claims in the court filings that he controlled what she ate, how she dressed, how much she could sleep, how much money she could spend and who she could spend time with and where. And that he monitored her phone calls, texts and emails. She accuses him of verbally disparaging her and physically abusing her, allegedly throwing “hard, sharp objects” at her.

How Elizabeth Holmes’ Abuse Allegations Could Affect Her Fraud Trial

In a rare defense strategy, the Theranos founder claims her ex-boyfriend masterminded a deception of investors and that she was a victim of his abuse

time.com

 

[JackNah_8]

No surprise, her defence is going down the abuse route

 

[JackNah_8]

4 Startling Insights Into Elizabeth Holmes From Psychiatrist Who's Known Her Since Childhood

Daughter of an Enron executive Elizabeth Holmes was pushed hard by a striving mother, according to a psychiatrist and inventor who has known her since childhood

www.forbes.com

I didn't know her dad was former VP at Enron

 

[JackNah_8]

latest:

Former Theranos employee describes being starstruck by Elizabeth Holmes, quickly growing concerned over startup's capabilities

The criminal trial of Theranos founder and former CEO Elizabeth Holmes resumed Tuesday with the first full day of witness testimony. Two former employees, including Erika Cheung, who reported the company to regulators in 2015, took the stand.

edition.cnn.com

 

[Kurve]

latest:

Former Theranos employee describes being starstruck by Elizabeth Holmes, quickly growing concerned over startup's capabilities

The criminal trial of Theranos founder and former CEO Elizabeth Holmes resumed Tuesday with the first full day of witness testimony. Two former employees, including Erika Cheung, who reported the company to regulators in 2015, took the stand.

edition.cnn.com

I think a lot of people were a bit star struck or intimidated by her, not only was she gorgeous, she was tall and only 19 years old when she launched. Pretty impressive even if she was mostly all con.

Did you see the 60 Mins segment I think it was, where Holmes was giving a speech to a panel of scientists and an audience and one of the middle aged nobs interrupted her totally bedazzled and said 'You are simply magnificent' ... it was pathetic

 

[JackNah_8]

I think a lot of people were a bit star struck or intimidated by her, not only was she gorgeous, she was tall and only 19 years old when she launched. Pretty impressive even if she was mostly all con.

Did you see the 60 Mins segment I think it was, where Holmes was giving a speech to a panel of scientists and an audience and one of the middle aged nobs interrupted her totally bedazzled and said 'You are simply magnificent' ... it was pathetic

I havent seen that segment. Awhile ago I watched Holmes documentary: The Inventor. It was crazy that experienced scientists believe every word she said, even though she had no substance or clear evidence

 

[MSB ROYS]

If you listen to the latest Bad Blood podcast Episode 5 "Fake it 'till you make it" you will hear how she was modelled Theranos culture on programmers rather than scientists.

 

[MSB ROYS]

Interesting to hear what Holmes says.

 

[JackNah_8]

Interesting to hear what Holmes says.

She will probably blame her ex husband

 

[Kurve]

Her defence is done.

Theranos founder Elizabeth Holmes testified she "never" lied to investors as her defence team rested its case in her criminal fraud trial.
Ms Holmes, 37, pleaded not guilty to charges she lied about her firm, including that its technology could detect diseases with a few drops of blood.
Prosecutors say she knowingly duped investors and patients.
Her defence says she was merely a naïve businesswoman whose firm failed.
Ms Holmes faces 11 counts of wire fraud and conspiracy. Each count carries a maximum sentence of 20 years in prison.
Over seven days of testimony, Ms Holmes acknowledged mistakes were made, but insisted she did not defraud investors or patients.

Under cross-examination, she conceded that there were errors in a 2014 Fortune magazine cover story by journalist Roger Parloff, which helped lift the young founder to stardom.
On Tuesday, Assistant US Attorney Robert Leach showed Ms Holmes a line in the story, which said the company offered more than 200 diagnostic tests using the Theranos technology.
Asked by Mr Leach if she would agree that statement was incorrect, Ms Holmes replied: "I believe that now."

Ms Holmes testified last week that by 2014, Theranos had started to use third-party machines for most of its blood tests.
She had no clear explanation for why investors were given a revenue projection of nearly $1bn in 2015, when internal estimates were much lower - around $113m. And she disputed claims that she lied to potential investors about Theranos devices being used in military helicopters.
"My testimony is I don't think I said that," she said.

Closing arguments are expected to take place on 16 and 17 December, with jury deliberations to follow.

Elizabeth Holmes testifies she 'never' misled investors

Holmes' defence team rested their case after seven days of testimony from the Theranos founder.

www.bbc.com

 

[JackNah_8]

Guilty

Theranos founder Elizabeth Holmes guilty in mammoth fraud case

Theranos founder Elizabeth Holmes, a former tech billionaire once hailed as a visionary, faces years in prison after being convicted of fraud and conspiracy.

www.abc.net.au

 

[Kurve]

Sentencing is next week.

Theranos founder should get 15 years behind bars, pay $US800 million for fraud, prosecutors say

The blood testing start-up founder was convicted on four counts of wire fraud and conspiracy in January.

www.abc.net.au

 

[Kurve]

She got 11 years.

California's US District Judge Edward Davila sentenced Holmes on three counts of investor fraud and one count of conspiracy.

Theranos founder Elizabeth Holmes sentenced to more than a decade in prison over conspiracy, fraud

US attorneys say Holmes's crimes "damaged the trust and integrity" in technology start-ups.

www.abc.net.au

 

[JackNah_8]

Good, she deserves it.

 

[Hojuman]

Enjoy Elizabeth

 

[Kurve]

Whatever happened to Balwani last week, I don't know?

What happened to Ramesh 'Sunny' Balwani?​

In July 2022, Holmes' ex-boyfriend and former business partner Ramesh 'Sunny' Balwani was found guilty of all charges for his involvement in the Theranos multimillion dollar fraud scheme. This included 2 counts of conspiracy and ten counts of wire fraud.

The former Chief Operating Officer of Theranos is currently out on bail, but will return to the San Jose courtroom for his sentencing hearing on November 15, 2022. According to Business Standard,(opens in new tab) he faces a maximum prison sentence of 20 years, plus a fine of $250,000.

Where is Elizabeth Holmes now and will she go to prison?

Her request for a new trial has been denied

www.goodto.com