Theranos founder Elizabeth Holmes is not a villain but rather a hard-working, young and naive businesswoman whose company simply failed, her lawyer told jurors on Wednesday at the former Silicon Valley star's trial on federal fraud charges involving the now-defunct blood-testing start-up once valued at $9 billion (€7.5 billion ).
Lance Wade, a lawyer for Ms Holmes, delivered the defence’s opening statement in one of the most closely watched trials of a US corporate executive in years. Wade spoke after the prosecution in its opening statement said Holmes had engaged in a scheme of “lying and cheating” to attain wealth and fame at the expense of investors and patients. Ms 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,” Mr 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,” Mr Wade added.
Ms Holmes (37) has pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy. She may testify during the trial. “This is a case about fraud – about lying and cheating to get money,” Robert Leach, a member of the prosecution team, earlier told the 12-member jury.
“The scheme brought her fame, it brought her honour and it brought her adoration,” Mr Leach added, also making her a billionaire. “She had become, as she sought, one of the most celebrated chief executives in Silicon Valley and the world. But under the facade of Theranos’s success there were significant problems brewing,” Mr Leach said.
The defence countered that portrayal, with Wade telling 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. That is not true.”
On paper, Theranos was worth billion of dollars, but when Ms Holmes left it in 2018, her savings, her stock and the company were “all gone,” Mr Wade said. He 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?”
Mr Wade said Ms Holmes dropped out of prestigious Stanford University and bet her savings to start Theranos at age 19 in 2003, then poured her life into it for 15 years.
Blood tests
Ms 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. Holmes sat at a table flanked by her attorneys. She earlier arrived at the courtroom, wearing a white blouse and greyish-blue skirt suit, with a facemask amid the Covid-19 pandemic. US District Judge Edward Davila is presiding.
Former Theranos executive Ramesh “Sunny” Balwani, scheduled to be tried separately, has also pleaded not guilty. Court filings showed that Holmes, who had a romantic relationship with Balwani, has alleged he abused her emotionally and psychologically. Mr Balwani has denied the allegations.
Mr Leach said evidence would show Ms Holmes had agreed with Mr Balwani to carry out a scheme to defraud Theranos investors and patients.
In 2009, after losing interest from Pfizer and other pharmaceutical companies, Holmes turned to fraud, Mr Leach said.
“Out of time and out of money, Elizabeth Holmes decided to lie,” Mr Leach said. Prosecutors have said Ms Holmes and Mr Balwani defrauded investors between 2010 and 2015 and deceived patients when the company began making its tests commercially available, including via a partnership with the Walgreens drugstore chain.
Mr Leach showed jurors excerpts of a Theranos investor presentation claiming its process provided the “highest levels of accuracy and precision”. Mr Leach said insiders knew the technology was “plagued by issues and repeatedly failing quality control”.
Mr Leach laid out ways in which Ms Holmes allegedly defrauded investors, including by suggesting that the company’s miniature lab had been vetted by Pfizer, that its technology was being used by the US military, and that it would achieve more than $140 million in revenue by the end of 2014, which he 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. – Reuters
