Elizabeth Holmes fraud case goes to jury duty | Technology

By MICHAEL LIEDTKE – AP Technology Writer

SAN JOSE, Calif. (AP) – The jury that will assess 11 counts of fraud and conspiracy against former Theranos CEO Elizabeth Holmes was finally successful on Friday afternoon after a three-month trial that captivated Silicon Valley.

The transfer came after lawyers for opposing parties completed a second day of painstaking final arguments to summarize their respective interpretations of the evidence before the jury. This included the testimony of 32 witnesses – including Holmes herself – and over 900 exhibits.

The eight men and four women on the jury began their deliberations late Friday and will take the weekend off before resuming Monday morning to decide whether Holmes has turned his blood testing startup into a massive scam. If convicted on all counts, Holmes, 37, faces up to 20 years in prison.

In his latest attempt to persuade the jury to acquit, Holmes’ attorney Kevin Downey likened his final days leading a then reeling Theranos to a captain valiantly trying to save a sinking ship.

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If Holmes had committed any crimes, she would have rushed to jump overboard like a frightened rat, Downey told jurors as he finished about five hours of oral argument. Federal prosecutors spent three hours Thursday explaining why the jury should sentence her.

Referring to a turning point in 2016 that threatened to ruin Theranos, Downey asked the jury, “Is she gone? No, she stayed. Why? Because she believed in this technology. “

As he did on Thursday, Downey again described Holmes as a well-meaning entrepreneur who has never stopped trying to perfect Theranos’ blood testing technology and use it to improve healthcare.

“She believed she was building technology that would change the world,” Downey proclaimed Friday.

Federal prosecutor John Bostic offered a rebuttal, arguing that Holmes had attempted to save Theranos under scrutiny that left him with few other options. He cited evidence to claim that she constantly sought to deceive people whenever she thought she could get away with her alleged ruse.

“At so many fork in the road, she chose the wrong lane,” said Bostic.

Bostic’s rebuttal echoed many themes touched on in Thursday’s arguments, when fellow prosecutor Jeffrey Schenk portrayed Holmes as a charlatan who brazenly lied to get rich and famous. These purported goals were met in 2014 when Holmes became a media sensation with an estimated fortune of $ 4.5 billion based on his 50% stake in Theranos.

The lawsuit revolves around allegations that Holmes fooled investors, business partners and patients about Theranos’ technology. She has repeatedly claimed that the company’s new testing device can detect hundreds of illnesses and other problems with just a few drops of blood taken with a finger prick instead of a needle stuck in a vein.

The concept was so compelling that Theranos and Holmes were able to raise more than $ 900 million, part of it from billionaire investors like media mogul Rupert Murdoch and software titan Larry Ellison. The Palo Alto, Calif., Company has also negotiated potentially lucrative deals with major retailers Walgreens and Safeway. Holmes quickly began gracing the covers of national magazines as a prodigy.

Unknown to most people outside of Theranos, the company’s blood testing technology was flawed, often producing inaccurate results that could have endangered the lives of patients who took the tests.

After the flaws were discovered in 2015 and 2016, Theranos finally collapsed. The Ministry of Justice filed its criminal case in 2018.

“People have lost money,” Downey admitted Friday. “This is a bad event and a failure on the part of (Holmes).” But, he added, none of this was criminal.

Downey told the jury that Holmes did not realize the extent of the problems until a laboratory director at Theranos informed him in March 2016 that the company had to invalidate 60,000 of its past blood tests.

If Holmes had thought any crimes had been committed, Downey argued, she would have tried to cover them up and possibly sell some of her stock. Not only did she never sell a stock, Downey said, but she kept trying to save the company. Her turnaround efforts included ousting Theranos COO Sunny Balwani, who had also been her lover.

In a dramatic turn on the witness stand last month, Holmes said Balwani secretly controlled her diet, friendships and more while subjecting her to mental, emotional and sexual abuse. Although the testimony made Holmes Balwani’s pawn, Downey never mentioned the alleged abuse and its effect on Holmes during his oral argument.

The jury had to determine whether domestic violence might have affected some of its decisions at Theranos. In the prosecution’s final argument, Schenk reminded jurors that finding Holmes guilty of fraud would not mean they were dismissing his allegations of abuse.

Bostic reconsidered the matter on Friday, telling jurors they should not allow sympathy to influence their decision on the fraud charges. “There is a complete record of fraud charges in this case,” he said. “There is much less evidence of what happened between Miss Holmes and Mr. Balwani.”

Balwani’s attorney categorically denied Holmes’ charges in court documents the jury never saw. Jurors also never heard of Balwani, who intended to invoke his Fifth Amendment right against self-incrimination had been called to testify. Balwani, 56, faces similar fraud charges in a separate trial set to begin in February.

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