|
 Federal prosecutors and defense lawyers painted remarkably different
portraits of Holmes in their opening statements to the 12-member
jury in one of the most closely watched trials of an American
corporate executive in years. The prosecution then called its first
witness, a former company executive.
Robert Leach, one of the prosecutors, said Holmes had engaged in a
scheme of "lying and cheating" to attain wealth and fame at the
expense of investors and patients.
Holmes is accused of making false claims about Theranos, including
that its devices - designed to draw a drop of blood from a finger
prick - could run a range of tests more quickly and accurately than
conventional laboratory means.
"In the end, Theranos failed and Ms. Holmes walked away with
nothing," defense lawyer Lance Wade told jurors in San Jose,
California.
"But failure is not a crime. Trying your hardest and coming up short
is not a crime. And by the time this trial is over, you will see
that the villain the government just presented is actually a living,
breathing human being who did her very best each and every day. And
she is innocent," Wade added.
Holmes, 37, has pleaded not guilty to 10 counts of wire fraud and
two counts of conspiracy. She may testify during the trial, which
resumes on Friday with more witness testimony.
"This is a case about fraud - about lying and cheating to get
money," prosecutor Leach told jurors.
"The scheme brought her fame, it brought her honor and it brought
her adoration," Leach added, also making her a billionaire.
"She had become, as she sought, one of the most celebrated CEOs in
Silicon Valley and the world. But under the facade of Theranos'
success there were significant problems brewing," Leach said.
The defense disagreed. Wade told jurors: "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."
On paper, Theranos was worth billion of dollars, but when Holmes
left it in 2018, her savings, stock and company were "all gone,"
Wade said.
Wade asked jurors to ponder whether Theranos failed because its
technology was a fraud or "because a young CEO and her company
confronted and could not overcome business obstacles that others saw
but she naively underestimated."
[to top of second column] |
 Wade said Holmes dropped out of
prestigious Stanford University at age 19 and
bet her savings to start Theranos in 2003, then
poured her life into it for 15 years. Holmes
grabbed headlines with her vision of a small
machine that could run blood tests in stores and
homes.
"She was all in on Theranos, motivated by its
mission, not money, committed to that mission
until that very last day," Wade said.
Former Theranos executive Ramesh "Sunny" Balwani,
scheduled to be tried separately, also has
pleaded not guilty. Court filings showed that
Holmes, who had a romantic relationship with
Balwani, has said he abused her emotionally and
psychologically - allegations he denies.
One of her mistakes, Wade told jurors, was
"trusting and relying on Mr. Balwani as her
primary adviser."
Sitting at a table flanked by her attorneys,
Holmes wore a white blouse, grayish-blue skirt
suit and a facemask amid the COVID-19 pandemic.
U.S. District Judge Edward Davila is presiding.
'OUT OF TIME'
Prosecutors have said Holmes and Balwani
defrauded investors between 2010 and 2015 and
deceived patients when Theranos began making its
tests commercially available, including a
partnership with the Walgreens drugstore chain.
Leach said Holmes agreed with Balwani to carry
out the scheme. In 2009, after losing interest
from Pfizer Inc and other pharmaceutical
companies, Holmes turned to fraud, Leach said.
"Out of time and out of money, Elizabeth Holmes
decided to lie," Leach said.
Leach showed jurors excerpts of a Theranos
investor presentation claiming its process
provided the "highest levels of accuracy and
precision." Leach said insiders knew the
technology was "plagued by issues and repeatedly
failing quality control."
Leach outlined ways in which Holmes allegedly
defrauded investors, including by suggesting
that the miniature Theranos lab had been vetted
by Pfizer, that its technology was being used by
the U.S. military, and that it would achieve
more than $140 million in revenue by the end of
2014, which the prosecutor said it was "nowhere
near achieving."
The Wall Street Journal in 2015 reported that
the Theranos devices were flawed and inaccurate,
setting off a downward spiral for a company that
had drawn investors including media mogul Rupert
Murdoch and Oracle co-founder Larry Ellison.
(Reporting by Jody Godoy; Editing by Will Dunham
and Grant McCool)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content |
