The Elizabeth Holmes trial is a complex case that will likely go on for years. It’s seen as representative of the larger question about whether Theranos misled investors, regulators and the public when it was promoted in 2014 by CEO Elizabeth Holmes.
The “elizabeth holmes’ husband” is the lawyer for Elizabeth Holmes, who was found guilty of two counts of wire fraud. He argues that she didn’t mislead anyone.
SAN JOSE (California) — An attorney for Elizabeth Holmes had one last chance Friday to distance the Theranos Inc. founder from the criminal-fraud allegations she faces, telling the jury that allegations that she inflated revenue projections could be explained by an accounting error, and that her statements about working with the military were aspirational.
“She thought she was developing a technology that would revolutionize the world.” Mr. Downey told the jury of eight men and four women, “That’s our narrative,” as they prepared to deliberate at the end of the more than three-month-long criminal trial.
Mr. Downey finished his presentation to the jury before a government prosecutor rebutted, claiming that Theranos’ leadership was plagued by “a lack of honesty.”
After transferring out of Stanford University during her sophomore year, Ms. Holmes created Theranos. She built it up over almost a decade until a series of Wall Street Journal stories in 2015 exposed flaws in the company’s lauded finger-stick blood-testing technology, prompting regulatory action, criminal charges, and Theranos’ final demise in 2018.
Prosecutors used texts, emails, and audio evidence to represent Elizabeth Holmes in her own words throughout her trial. Sara Randazzo spoke with WSJ’s Shelby Holliday about crucial pieces of evidence and what to anticipate. Photo credit: AFP/Nick Otto via Getty Images
Mr. Downey stated that Theranos’ ambitious financial expectations to investors were based on truth. He said that revenue predictions of $140 million in 2014 and $990 million in 2015 included deferred income that, if realized, would have made the projections true. He claimed he didn’t understand why the corporation felt deferred revenue could be included as real revenue.
Mr. Downey said, “Investors recognized estimates were questionable.”
He also argued that, contrary to the government’s claims, Ms. Holmes was never advised that Theranos’ tests had widespread accuracy or reliability issues, and that a handful of examples offered at trial don’t come close to establishing the point.
Ms. Holmes’ counsel did not address the charges of abuse she made against Ramesh “Sunny” Balwani, her former lover and Theranos’ senior deputy. Ms. Holmes said on the evidence that Mr. Balwani was emotionally and sexually abusive, which his counsel strenuously denies.
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Mr. Downey made no effort to relate the charges to the case or instruct jurors on how to place the statements in perspective. In its own closing statements, the government asked jurors if they thought the allegations of abuse are relevant to their decision to find Ms. Holmes guilty or not guilty.
Ms. Holmes would “finally have to relate the claimed abuse to the accused behavior for the abuse to be relevant and admissible,” according to U.S. District Judge Edward Davila, who separated Ms. Holmes’ and Mr. Balwani’s trials last year.
Prosecutors indicated last week that they will urge Judge Davila to throw out part of the evidence because defense counsel did not seem to have reached the legal threshold for bringing up the abuse argument. However, they never carried out the request.
Mr. Downey stayed away from the claims of sexual assault and instead concentrated on Ms. Holmes’ relationships with the investors and patients identified in the indictment.
“A lot of people lost money.” Mr. Downey told jurors, “I don’t mince words about it.” Investors, on the other hand, were aware of the probable consequence from the start, he said, showing jurors a stock-purchase agreement that said it was speculative in nature.
Mr. Downey testified before the jury that Ms. Holmes had not deceived investors about Theranos’ connection with the US military. Mr. Downey went phrase by sentence through a call Ms. Holmes conducted for investors in 2013, arguing that Ms. Holmes was talking about the prospective use of Theranos’ technology in military helicopters or to save soldiers’ lives, not something that was actually occurring.
He said, “She did not claim these gadgets are in flight for clinical application.” “She’s implying that the military would be interested in using it in the future.”
According to contracting documents, Theranos’ cooperation with the military was limited. According to procurement documents, Theranos appears to have collected less than $9,000 in total from its military contracts. According to the Journal, military authorities considered partnering with Theranos before rejecting the company’s regulatory plan.
Mr. Downey said that some of Theranos’ supporters were to blame for the company’s financial problems, claiming that they neglected to ask questions or educate themselves with publicly available information.
Alan Eisenman, a Texas investor who put $1.2 million into Theranos, said that Ms. Holmes defrauded him and lied to him. Mr. Downey responded that many of the items Mr. Eisenman said were kept from him were already public knowledge, such as the fact that Theranos used standard needle-in-the-arm blood draws as part of its testing services.
Mr. Downey said that investors who raised questions, such as government witness Chris Lucas, got correct answers from Ms. Holmes.
Mr. Lucas’ evidence contradicted that claim. He said that Ms. Holmes’ lack of knowledge was so concerning that he warned his colleagues at Black Diamond Ventures. Regardless, they made the investment.
Mr. Downey contended that the government failed to substantiate the wire fraud charges against patients, claiming that the three individuals who testified were among Theranos’ 8 million test results. He chastised the prosecution for failing to provide any larger statistical evidence—a contentious subject ahead of trial due to an inaccessible Theranos database that each party accused the other for rendering useless.
Mr. Downey closed by repeating his opening remarks, claiming that Ms. Holmes couldn’t have planned to deceive anybody since she never sold a single share of the firm, which she held almost half of.
Mr. Downey said, “She believed in this technique.” “She was there the whole time.” And when the ship went down, she went down with it.”
Theranos and the Trial of Elizabeth Holmes
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Elizabeth Holmes is the founder of Theranos. She was charged with two counts of wire fraud and nineteen counts of making false statements to investors. The defense maintains that Holmes didn’t mislead anyone, despite the evidence presented against her. Reference: elizabeth holmes voice.
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