U.S. Rests Its Case within the Elizabeth Holmes Trial

Protection legal professionals are anticipated to argue that the founding father of Theranos, the blood-testing start-up, failed however didn’t commit fraud.

Elizabeth Holmes, the founder of Theranos, entering federal court in San Jose, Calif., earlier this month.
Credit score…John G Mabanglo/EPA, by way of Shutterstock

Erin Griffith

SAN JOSE, Calif. — For the previous 11 weeks, prosecutors revealed emails from determined buyers. They held up falsified paperwork side-by-side with the originals. They known as dozens of witnesses who lobbed accusations of deceit and evasiveness.

And on Friday, after questioning their twenty ninth witness, prosecutors concluded their arguments towards Elizabeth Holmes, the founding father of the failed blood testing start-up Theranos. Ms. Holmes has pleaded not responsible to 11 counts of defrauding buyers over Theranos’s expertise and enterprise, in a case that has been billed as a referendum on Silicon Valley’s start-up tradition.

The prosecution’s resting its case is a serious turning level within the trial of Ms. Holmes, whose rise and fall captivated the general public and who has been held up as a logo of the tech trade’s hubris and the final decade’s tradition of grift.

For weeks, prosecutors sought to color Ms. Holmes, 37, as a liar who constructed Theranos right into a $9 billion start-up whereas figuring out all alongside that the corporate’s blood exams, which had been trumpeted as revolutionary, didn’t work. Prosecutors methodically outlined six most important areas of Ms. Holmes’s deception, together with lies about Theranos’s work with the navy and pharmaceutical corporations, its enterprise efficiency and the accuracy of its blood exams.

Her legal professionals are actually anticipated to argue that Theranos was merely a failure and never a fraud, elevating the query of whether or not Ms. Holmes will take the stand in her personal protection. In filings, her legal professionals have indicated that she is more likely to testify.

The stakes of the trial are excessive. If Ms. Holmes is convicted, she faces as much as 20 years in jail for every depend of fraud, and prosecutors could also be emboldened to go after extra start-ups that stretch the reality to boost funding. An acquittal might ship a message that Silicon Valley start-ups, which have exploded in energy and wealth during the last decade, are tough to carry to account.

“When prosecutors relaxation their case, they’re mainly saying they’ve sufficient to ask the jury to convict the defendant proper then and there,” stated Andrey Spektor, a lawyer at Bryan Cave Leighton Paisner and former federal prosecutor in New York’s Jap District. He stated he anticipated the protection to placed on a case, fairly than merely permit the jury to resolve whether or not the prosecutors did not show theirs.

Who’s Who within the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Who’s Who within the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Carlos Chavarria for The New York Occasions

Elizabeth Holmes, the disgraced founding father of the blood testing start-up Theranos, stands trial for 2 counts of conspiracy to commit wire fraud and 9 counts of wire fraud.

Listed here are a number of the key figures within the case →

Ms. Holmes, a Stanford College dropout who based Theranos in 2003 and raised $945 million from buyers, was indicted on fraud costs in 2018. Her case has been plagued for years by delays: First over course of, then the pandemic and eventually, Ms. Holmes’s giving beginning to a child in August.

When the trial lastly started in September, prosecutors known as former buyers, companions and Theranos staff to testify. Jim Mattis, the retired four-star Marine Corps common and former protection secretary who was a Theranos director, took the stand, as did a former Theranos lab director who endured six grueling days of questioning. In a single surreal second, a forensics knowledgeable recited textual content messages between Ms. Holmes and her then-boyfriend and enterprise associate at Theranos, Ramesh Balwani, who is called Sunny.

This week, Alan Eisenman, an early investor in Theranos, testified that Ms. Holmes reduce him off and threatened him when he requested her for extra details about the corporate. But even after that therapy, Mr. Eisenman poured extra money into the start-up, believing its seemingly fast-growing enterprise would ship riches to backers like him.

When requested about his understanding of the worth of his Theranos inventory right now, Mr. Eisenman stated, “It’s not an understanding, it’s a conclusion. It’s price zero.”


The prosecution’s most compelling proof included a collection of validation stories that Ms. Holmes despatched to potential buyers and companions that made it look as if pharmaceutical corporations together with Pfizer and Schering-Plough had endorsed Theranos’s expertise. Representatives from every firm testified that they’d not endorsed Theranos’s blood check and had been shocked to see their corporations’ logos added to the report.

Daniel Edlin, who labored at Theranos and was a fraternity brother of Ms. Holmes’s brother, Christian, testified that the start-up faked demonstrations of its machines for potential buyers, hid expertise failures and threw out irregular blood check outcomes.

Mr. Mattis testified that he was not conscious of any contracts between Theranos and the navy to place its machines on medevac helicopters or on the battlefield, as Ms. Holmes had often instructed buyers.


The prosecution concluded its case with testimony from Roger Parloff, the journalist who wrote {a magazine} cowl story about Ms. Holmes, serving to propel her to acclaim. Mr. Parloff’s article was despatched to quite a few buyers as a part of Ms. Holmes’s pitch.

But notably absent from the courtroom had been a number of the most outstanding witnesses on the prosecution’s checklist. Ms. Holmes’s rise was aided by her affiliation with enterprise titans such because the media mogul Rupert Murdoch, elder statesmen comparable to Henry Kissinger and Admiral Gary Roughead, and the lawyer David Boies. Theranos was felled, partly, by whistle-blowers comparable to Tyler Shultz, the grandson of George Shultz, the previous secretary of state who sat on Theranos’s board. None of them testified.

Additionally absent was Mr. Balwani, who was charged with fraud alongside Ms. Holmes and faces trial subsequent yr. His position as a fiery defender of Theranos who went after anybody who questioned the corporate has been within the background of a lot of the testimony.

At almost each flip, Ms. Holmes’s legal professionals sought to restrict testimony and proof. They attacked the credibility of buyers, utilizing authorized disclaimers to point out that buyers knew they had been playing on a younger start-up. The legal professionals additionally poked holes in buyers’ restricted due diligence on Theranos’s claims. At one level, they directed Erika Cheung, a key whistle-blower who labored in Theranos’s lab, to learn the complete organizational chart of the folks employed in lab to point out she performed a small position within the total operation.

After prosecutors rested their case on Friday, Ms. Holmes’s legal professionals instantly requested the decide for an acquittal and stated the proof was inadequate. In addition they moved to drop sure costs, testimony and proof and succeeded in eradicating one depend of fraud.

Their first witnesses included Trent Middleton, a paralegal on the protection workforce’s agency who created stories summarizing info about Theranos, such because the variety of patents, buyers and whole income. Ms. Holmes’s legal professionals additionally known as Fabrizio Bonanni, a biotechnology govt who joined Theranos’s board of administrators in 2016, who described the efforts the start-up made to enhance its processes and insurance policies after it got here beneath hearth.

Ms. Holmes’s legal professionals might attempt to shine a highlight on her relationship with Mr. Balwani. The 2 dated in secret. In court docket filings, Ms. Holmes alleged he was emotionally abusive and controlling. Mr. Balwani’s legal professionals have denied the claims.

Testimony from Ms. Holmes is more likely to revive the media circus surrounding the trial’s early days, which died down because the weeks of testimony wore on. It will additionally open her as much as doubtlessly damaging cross-examination from prosecutors or perjury.

“Most felony defendants don’t testify, significantly in white-collar circumstances the place the federal government has many challenges to beat, like in proving intent, and typically even in simply proving {that a} crime occurred,” Mr. Spektor stated. Ms. Holmes’s case is totally different, he stated, as a result of the offense is evident reduce and the proof is pretty simple to grasp.

All through the proceedings, Ms. Holmes has been quiet within the courtroom, solely whispering to her legal professionals or relations. However the jury heard her forcefully defending Theranos towards accusations of fraud in video interviews performed in court docket. In addition they heard her settle for blame.

“I’m the founder and C.E.O. of this firm,” she stated in one of many movies. “Something that occurs on this firm is my duty.”