Elizabeth Holmes speaks out in her criminal fraud trial | Technology

SAN JOSE, Calif. (AP) – Fallen Silicon Valley star Elizabeth Holmes, accused of deceiving investors and patients about her startup Theranos and her medical device she says would reshape healthcare, appeared Friday night at the bar in his criminal fraud trial. .

The surprise decision to have Holmes testify so early in his defense was a bomb and carries considerable risks. Federal prosecutors, who ended their case several months earlier on Friday, have made it clear they are anxious to grill Holmes under oath.

Prosecutors will likely not have that chance until after Thanksgiving weekend. Holmes’ attorney Kevin Downey told U.S. District Judge Edward Davila he plans to continue guiding her through her story when she returns to the stand on Monday and Tuesday in a San Jose courtroom, in California, before the trial recess until Nov. 29.

Prosecutors called 29 witnesses to substantiate their claim that Holmes was putting patients ‘lives at risk while fooling investors and clients about Theranos’ technology. Among them was General James Mattis, former US Secretary of Defense and former Theranos board member, who explained how he was initially impressed and ultimately disillusioned with Holmes.

They also featured internal documents and sometimes salacious texts between Holmes and her former lover, Sunny Bulwani, who also served as the COO of Theranos. In court documents, Holmes’ attorneys have claimed she was manipulated by Balwani through “intimate partner violence” – an issue expected to arise during her ongoing testimony next week.

Until she spoke on Friday, Holmes had sat upright in her chair on the far right of the jury during the trial, unmoved even when one-off supporters spoke of their concerns about Theranos.

This combination of compelling testimony and documentary evidence has apparently proven effective in convincing Holmes to tell his side of the story to the jury of 10 men and four women (including two alternates) who will ultimately decide his fate. If found guilty, Holmes – now 37 and mother of a recently born son – could face a sentence of up to 20 years in prison.

Shortly after 3 p.m. Holmes walked slowly to the rostrum in front of a rapt courtroom filled with spectators and jurors, all wearing masks.

Maskless behind a transparent barrier, Holmes recounted her early years as a student at Stanford University and her interest in disease detection. This culminated in his decision to drop out of school in 2003 at the age of 19 to found the startup that eventually became Theranos. Holmes said the name was derived from the words “therapy” and “diagnosis.”

Holmes said she convinced her parents to let her use her college savings to fund her ambitions to shake up the healthcare industry. “I started working all the time… trying to meet people who could help me build this,” Holmes said in a hoarse voice that became one of his hallmarks during the ascension of Theranos.

As the business took shape, so did his vision. Ultimately, Theranos developed a device called Edison that could search for hundreds of health issues with just a few drops of blood. Current tests typically each require a vial of blood, making it both slow and inconvenient to perform more than a handful of tests on patients at a time.

Had it performed as promised, the Edison could have revolutionized healthcare by making it easier and cheaper to scan for the first signs of illness and other health issues. Instead, the jurors heard records of Holmes bragging to investors about alleged breakthroughs which later turned out to be false.

Witness depositions and other evidence presented at trial strongly suggest that Holmes distorted alleged deals with big pharmaceutical companies such as Pfizer and the U.S. military while hiding recurring issues with the Edison.

But Edison’s problems didn’t become public until the Wall Street Journal first published in a explosive article series in October 2015. An audit of the Centers for Medicare and Medicaid Services confirmed these problems the following year.

By that time, Holmes and Balwani had raised hundreds of millions of dollars from billionaire investors such as media mogul Rupert Murdoch and the Walton family of Walmart and had made deals with Walgreens and Safeway to perform analysis of blood in their pharmacies. Those investments at one point valued Theranos at $ 9 billion, giving Holmes a fortune of $ 4.5 billion – on paper – in 2014.

Evidence presented at trial also revealed that Holmes had released financial projections calling for private company Theranos to generate $ 140 million in revenue in 2014 and $ 990 million in revenue in 2015 while making a profit. A copy of Theranos’ 2015 tax return presented as part of evidence at trial showed the company had revenues of less than $ 500,000 that year while reporting cumulative losses of $ 585 million.

Ellen Kreitzberg, a law professor at the University of Santa Clara who attended the trial, said she believed the government had made a strong case.

“There is nothing fancy or sexy about this testimony,” she said. “The witnesses were very careful in their testimony. None of the witnesses seemed to have anger or grudges against her. And so because of that, they were very powerful witnesses.”

Other witnesses called by the government included two former laboratory directors at Theranos who repeatedly warned Holmes that the blood testing technology was unreliable at all. Prosecutors also interviewed two part-time lab directors, including Balwani’s dermatologist, who spent just a few hours examining Theranos’ blood test technology in late 2014 and most of 2015. The lawyers de Holmes noted that part-time laboratory directors were permitted under government regulations. .

Other key witnesses included former Pfizer employees, former Safeway CEO Steve Burd, and a litany of investors from Theranos, including a representative from the former secretary’s family investment firm. education Betsy DeVos. The DeVos family ended up investing $ 100 million.

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