Founder and former CEO of health technology start-up Theranos Elizabeth Holmes is set to go to
trial this week for fraud after four years of repeated delays.
She has been charged with 12 counts of fraud and conspiracy to commit wire fraud because of
the false claims she made about Theranos’ blood testing technology. Jury selection began Aug.
31 in federal court in San Jose, Calif., and the trial is expected to last for three to four months.
Holmes founded Theranos in 2003 at only 19 years old and as a Stanford University dropout.
Holmes wanted to revolutionize blood testing and stated that she had the technology to test for
various medical conditions such as cancer and diabetes using only a few drops of the subject’s
blood.
Her rise to fame and power was meteoric. She formed a retail partnership with pharmaceutical
company Walgreens in 2013 and made former Secretaries of State Henry Kissinger and George
Shultz and four-star general and future Defense Secretary James Mattis members of her board of
directors. At its highest point, Theranos has a value of $9 billion.
However, her incredible success soon soured. The Wall Street Journal launched a condemning
investigation in Oct. 2015 that called into question Theranos’ technological advancements in the
form of their blood testing machines and methods. The article mentioned that former employees
questioned the accuracy and capabilities of the machine, named Edison. The company was
subsequently sued for fraud by its investors, had its blood testing license revoked by the U.S.
government and was ultimately dissolved in Sept. 2018.
Holmes and her business and former romantic partner, Theranos’ former COO Ramesh “Sunny”
Balwani, could both face up to 20 years in prison and a fine of $250,000 due to their alleged
fraud of investors, doctors and patients. The U.S. Department of Justice claims that Holmes and
Balwani promoted Theranos as capable of running hundreds of tests using only a few drops of
blood even though they did not have or develop the technology to make these tests fast and
reliable. They also vastly overestimated Theranos’ projected revenue to investors. Both have
pleaded not guilty.
Legal experts believe that the key to the upcoming trial is figuring out how much Holmes knew
about Theranos’ technology and whether she intended to deceive stakeholders. However, it is
currently unclear if Holmes will take the stand herself since prosecutors could use her past
statements to damage her credibility.
It is unclear what the defense’s strategy will be for the trial, but unsealed court documents have
given the public some ideas. It was revealed that Holmes plans to push the blame on Balwani by
accusing him of psychological, emotional and sexual abuse, essentially putting forward that he
refused her the ability to make decisions regarding Theranos. Balwani fervently denies these
claims. Holmes’ attorneys also indicated last year that they planned to introduce evidence that
Holmes has a mental condition that could absolve her of guilt. However, the court dismissed any
claims of Holmes being naïve or gullible when conducting her business as valid legal defenses.
The prosecution provided a list of 280 potential witnesses against Holmes, including media
mogul Rupert Murdoch, Theranos’ board of directors, 11 patients who were allegedly impacted
by Theranos’ inaccurate test results and nine physicians whose patients received inaccurate tests.
Notably, Holmes and her attorneys attempted to exclude any patient testimony.
Holmes and Theranos proved that Silicon Valley’s famous motto “fake it ‘til you make it”
cannot be applied to people’s health, well-being and lives.
