The reckoning begins
Jury selection begins today in the federal criminal case against Elizabeth Holmes, the founder of the blood-testing tech start-up Theranos. Indicted in 2018, she faces a dozen counts of fraud and conspiracy to commit wire fraud for making false claims about Theranos’s blood tests and business prospects. She has pleaded not guilty. If convicted, Holmes, 37, faces up to 20 years in prison.
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Opening arguments in the trial, which is expected to last three to four months, begin next week. At the heart of the proceedings, The Times’s Erin Griffith and Erin Woo write, is whether Holmes intentionally misled investors about her company’s technology or believed her own lies and was manipulated by others.
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Court filings recently unsealed provided a preview of what Holmes’s lawyers may say, and whom they could present in her defense.
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Holmes may point the finger at others, judging from a request her lawyers made last year that was just made public. She will be tried alone, but is not the only one accused of fraud. Ramesh “Sunny” Balwani, her former boyfriend and the former president and C.O.O. of Theranos, also faces charges. (His trial will begin early next year; he also pleaded not guilty.)
Holmes told the court she could introduce an expert to discuss “a mental condition bearing on guilt,” namely that her relationship with Balwani had a “pattern of abuse and coercive control.” Balwani’s lawyers denied the accusation in a filing.
The tech industry’s “fake it till you make it” culture is also on trial. Holmes was 19 when she started Theranos in 2003. After dropping out of Stanford, she raised $700 million from investors and became the world’s youngest billionaire, as Theranos soared to $9 billion in value.
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Holmes carefully cultivated her image, delivering eye-catching promises about Theranos’s revolutionary technology with an unusually deep voice, an intense stare and a uniform of black turtlenecks meant to evoke Steve Jobs. In her heyday, she presented herself as the ultimate ambitious, self-assured entrepreneur out to change the world, a common archetype in the tech industry, which has helped propel start-ups to riches and power. (Her high profile may pose a challenge for jury selection, which is expected to extend into tomorrow, or possibly longer.)
A refresher on who’s who in the rise and fall of Theranos. In addition to Holmes and Balwani, some of the other key figures in the saga include:
Tyler Shultz and Erica Chung, the former Theranos employees who blew the whistle on the company’s false claims.
David Boies, the litigator who served on the company’s board and tried to shut down whistle-blowers and reporters who questioned the company’s business practices.
Former members of Theranos’s star-studded board, including the former secretaries of defense James Mattis and William Perry, as well as the former secretaries of state Henry Kissinger and George Shultz (the grandfather of Tyler, the whistle-blower mentioned above).
John Carreyrou, the journalist who wrote the definitive account of fraudulent practices at the company.
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