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Theranos founder Holmes touts high hopes of failed startup at fraud trial

By Adam Schrader & Don Jacobson
Theranos founder Holmes touts high hopes of failed startup at fraud trial
Elizabeth Holmes (L) speaks onstage in 2015 alongside Alibaba's Jack Ma. The Theranos founder is expected to continue testifying Monday in her high-profile fraud trial. File Photo by John Angelillo/UPI | License Photo

Nov. 22 (UPI) -- Elizabeth Holmes resumed testifying in her high-profile fraud trial Monday in San Jose, answering questions from defense attorneys about her high hopes as founder of the failed startup Theranos.

Holmes, 37, briefly took the stand in a surprise move shortly before court recessed on Friday and again testified for around two hours on Monday while facing charges of bilking more than $700 million from investors in her venture.

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The Silicon Valley entrepreneur startled legal experts when she unexpectedly decided to take the stand -- opening her up to cross-examination from prosecutors alleging she defrauded investors before the company was dissolved in September 2018.

Holmes founded the blood testing company in 2003. She has pleaded not guilty to 11 counts of fraud charges after she was indicted in 2018. For each count, she faces up to 20 years in prison and a fine of $250,000 plus restitution if convicted.

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Under friendly questioning from her attorney, Kevin Downey, Holmes on Monday attempted to refute the government's fraud case by describing how she had helped establish promising partnerships with big pharmaceutical companies, the Department of Defense and Stanford University for the company's blood testing product, CNBC reported.

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"We thought this was a really big idea," Holmes said of the Theranos technology. "These robots that are used in the traditional lab as far as we know had not been miniaturized to run in a device that could be put at the point of care."

Pharma company Merck "sent data back to Theranos showing how well we performed compared to their traditional assays," she testified, adding that the startup also had relationships with Pfizer and Schering-Plough.

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She did not, however, address key government allegations that Theranos forged the pharma giants' logos on lab reports to make them appear legitimate. A previous government witness testified that Pfizer never approved of the use of its logo.

Opening arguments for the trial, now its 11th week, began on Sept. 8. Holmes had remained quiet about her case until first taking the stand last week before a jury of eight men and four women.

During her testimony Friday, Holmes spoke at length about the company's early days and confirmed when asked by Downey that her company's technology was "capable of running any blood tests."

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Holmes' testimony last week did not mention former boyfriend and COO of Theranos, Ramesh "Sunny" Balwani, who is also facing charges in a separate trial scheduled for next year for the alleged fraud scheme.

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Holmes' trial is expected to run through Dec. 17.

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