Calif. jury gets fraud case of Theranos founder Elizabeth Holmes

Calif. jury gets fraud case of Theranos founder Elizabeth Holmes
Arguments and testimony in the criminal fraud trial of former Theranos CEO Elizabeth Holmes have wrapped up with jury deliberations to begin on Monday. File Photo by John Angelillo/UPI | License Photo

Dec. 18 (UPI) -- After three months of arguments and witness testimony, Theranos founder and former CEO Elizabeth Holmes' criminal fraud trial is now in the jury's hands.

Holmes, 37, who founded the blood-testing start-up Theranos in 2003 in Palo Alto, Calif., faces nine counts of wire fraud and two counts of conspiracy to commit wire fraud for an alleged scheme to defraud investors, which led the company to dissolve in September 2018.


She was indicted in June 2018 along with former Theranos President and Chief Operating Officer Ramesh "Sunny" Balwani, who faces the same charges, for allegedly making false and misleading statements to investors about developing a device that could run a full range of blood tests with only a finger-prick sample.

Both have pleaded not guilty. Balwani faces trial next year.

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Arguments came to a close in Holmes' case late Friday as Judge Edward Davila gave the jury instructions about how to consider testimony and evidence they've seen, the San Jose Mercury News and CNBC reported.


The panel will start its deliberations Monday.

Holmes' defense attorney Kevin Downey argued Friday his client never intended to defraud investors, telling the jury in closing arguments that Holmes, with a net worth $4.5 billion at one point, never sold any shares.

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"At the first sign of trouble, crooks cash out, criminals cover up and rats flee a sinking ship," Downey said.

Holmes instead "went down with that ship when it went down," he continued. "That is who this woman is. You don't need more from me to know what her intent was."

Theranos raised $945 million from high-profile investors such as News Corp.'s Rupert Murdoch, Don Lucas and the family of former education secretary Betsy DeVos.

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"People lost money," Downey said. "Ms. Holmes certainly did not intend for people to lose money. That's a bad event and a failure on her part."

Prosecutor John Bostic said in his rebuttal, "The disease that plagued Theranos wasn't a lack of effort, it was a lack of honesty."

Bostic added that while there were people in the company who valued accuracy and reliability of the startup's technology, "Holmes was not one of those people, and she was in charge."


"We see a CEO of a company who was so desperate for the company to succeed, so afraid of failure, that she was willing to do anything," he asserted.

Holmes testified late last month that she was sexually and emotionally abused by Balwani, who along with being a top company official was also her boyfriend after leaving Stanford University, where she claimed she was raped.

Bostic said jurors must put the abuse allegations out of their mind, stating there is "no evidence connecting the allegations of abuse with the actual charged conduct."

Earlier this month, Holmes testified that she gave a reporter incorrect information about the company's technology in 2014.

If convicted, Holmes could face up to 20 years in prison, a fine of $250,000, plus restitution.

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