SAN JOSE, Calif. (KRON) — Elizabeth Holmes’ defense team suffered a big blow this week from a former U.S. Secretary of Defense who testified against the fallen Silicon Valley star, legal analysts said.
James “Mad Dog” Mattis was the most prominent person to take the witness stand in Holmes’ criminal federal fraud trial.
Holmes is charged with defrauding investors and patients. Prosecutors said the former Theranos CEO was driven by a desire to become rich and famous.
Mattis was one of many sophisticated investors who Holmes won over with promises that her company was on the verge of a revolutionary invention that could give patients faster, cheaper, and more accurate blood tests.
Mattis testified that when he met Holmes in 2011, he was impressed by how “sharp,” “articulate,” and committed,” she was.
He testified that Holmes misled him into believing Theranos’ blood analyzers could be used to help save soldiers’ lives on the battlefield. At the time, Mattis was a four-star Marine Corps general overseeing the U.S. wars in Iraq and Afghanistan.
Holmes’ defense attorneys are attempting to convince the jury that Holmes was unaware of major problems in Theranos’ blood lab.
Defense attorney Lance Wade told the jury that Holmes hard-working, young and naïve businesswoman whose company simply failed.
“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,” Wade said.
Sunny Balwani, Holmes’ ex-boyfriend and Theranos COO, is also charged with conspiracy and wire fraud. Legal analysts say the defense will likely try to pin the blame of Balwani. In court documents, defense attorneys wrote that Balwani controlled, manipulated, and abused Holmes.
For the first six days of testimony, prosecutors called on witnesses including former Theranos lab techs, finance managers, doctors, and patients.
Legal analysts say Mattis was the most damaging witness on the stand so far because his faith in Theranos’ technology came from direct conversations with Holmes.
“General Mattis’ testimony was very significant for the prosecution,” legal analyst and former prosecutor Michele Hagan told KRON4. “That was tough testimony to sit through as a defendant.”
Mattis retired from the military in 2013 and joined Theranos’ board of directors. He said he invested $85,000 so he would have some “skin in the game.”
“He was an investor, so he’s an example of what an investor was told,” Hagan said. “You can have the most sophisticated investors, but if you lie to them, if you commit fraud, it’s still a crime.”
Mattis testified that Holmes was the person calling the shots at Theranos.
“Ms. Holmes was in charge,” Mattis said.
Once a strong believer in Theranos’ mission, Mattis testified that he eventually realized the Holmes had misled him and the rest of the board of directors.
By 2016, “there just came a point when I didn’t know what to believe about Theranos anymore,” he said.
Holmes, 37, pleaded not guilty.