SAN JOSE, Calif. (KRON) — Who is Elizabeth Holmes? The persona presented by her defense team to the jury is a complete opposite from Holmes’ public persona during her time as Silicon Valley’s rising star.
For Holmes’ criminal federal fraud trial, defense attorneys are doing everything they can to distance Holmes from Theranos, the biotech company she founded when she was just 19.
“Theranos is not on trial. My client is on trial,” defense attorney Lance Wade told the judge Wednesday.
Holmes is charged with defrauding investors and patients.
The defense is framing its case around trying to prove Holmes was a “naïve” young CEO who underestimated business obstacles and was “controlled, manipulated and abused,” by Ramesh “Sunny” Balwani.
Balwani was COO of Theranos and Holmes’ boyfriend.
Holmes became Silicon Valley’s “golden girl” by pitching herself to investors and medical professionals as a confident, intelligent, visionary with a mission to change the world for the better.
“I found what I felt like I was born to do, at a really early age,” Holmes declared while speaking at Forbes’ 30 Under 30 Summit in October 2015.
Holmes said she dropped out of Stanford University and founded Theranos with dreams of inventing a blood testing machine that would give people who are sick a faster way to figure out what their illness was.
Holmes said she chose to become a CEO — instead of joining an NGO — so she would have more “control” over projects she worked on.
“Building a business can be a vehicle for making a difference in the world. I could not think of anything that was more meaningful than being able to change what people go through when they say goodbye too soon to people they love,” Holmes said at the summit.
Holmes said starting her own company was the best way to make sure her “intentions,” empowering patients to live longer lives, became a reality.
In opening statements of Holmes’ trial, prosecutors said her true “intentions” were to become rich and famous.
The reality of Holmes’ invention was that the mini blood testers gave patients false results and startling health scares.
While major problems in the blood lab were unfolding, Holmes became America’s youngest self-made billionaire. She wooed wealthy inventors to pump millions of dollars into her Silicon Valley startup company.
In 2014, Theranos employees working in the blood lab alerted executives up the chain of command that Theranos’ machines routinely failed quality control, lab tech Erika Cheung testified Wednesday. They were told to brush the evidence under the rug, she said.
“I was uncomfortable processing patient samples,” Cheung testified. “I did not think the technology we were using was adequate enough to be engaging in that behavior.”
Balwani told Theranos employees who worked in its clinical lab that they were not allowed to communicate with employees who worked in the product research and development lab, Cheung testified.
Holmes’ defense team tried to block the prosecution from being able to show circumstantial evidence showing Holmes likely knew her finger prick blood testers were not working.
Wade also tried to block Cheung from testifying about any subjects that were “inflammatory hearsay,” such as the emotions she went through when no one at Theranos took her concerns seriously.
The trial’s outcome hinges on proving Holmes’ intentions, showing what Holmes knew, and pinpointing when she knew it, said former San Francisco deputy district attorney Michele Hagan.
“Fake it ’till you make it. When you have a product that doesn’t work, that’s a whole different story,” Hagan said.
“If this product showed it didn’t work, and she knew that, then there is a problem. Because then you are in a position of defrauding people. So this is going to come down to: what did she know? When did she know it?” Hagan said.
Disillusioned by what they saw at Theranos, Cheung and her co-worker, Tyler Shultz, left the company and became whistleblowers.
Shultz leaked information about problems in the lab to the Wall Street Journal.
Cheung alerted the federal agents at the Centers for Medicare & Medicaid Services. The CMMS showed up for a surprise inspection at Theranos, and the company closed its labs soon after.
Balwani will be put on trial separately next year.