Elizabeth Holmes Promised To Change The World; Prosecutors Claim She Defrauded Investors, Patients – CBS San Francisco
SAN JOSE (CBS SF) — Under the glare of the national media cameras, fallen Theranos founder Elizabeth Holmes walked stoically into the federal courthouse in San Jose Wednesday morning, ignoring a chorus of questions shouted by reporters at her as her long-awaited fraud trial was set to begin with opening statements.
It was a much different kind of media attention for Holmes, who was once seen as a fast-rising star in Silicon Valley. The Stanford dropout was even heralded as the next Steve Jobs, leading several magazines to put her on their covers and helping her convince investors to give her billions.
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She promised her revolutionary blood testing procedure would change the world. Federal prosecutors claim her tests were a sham, defrauding investors and delivering false results for patients. Stanford trial law expert David Sklansky told KPIX that the case comes down to a core issue.
“It’s not a crime to believe your own hype,” he said. “It’s not a crime to be overconfident in your company. It is a crime to knowingly deceive people. And prosecutors will have to prove that that’s what Elizabeth Holmes did.”
Sklansky believes much will be revealed about the future course of the trial during the opening statements.
“This will be the opportunity for the lawyers to tell jurors what evidence they expect to present during the trial,” he told KPIX 5 Morning News. “So we may hear what witnesses each side will call. We may hear whether Elizabeth Holmes will testify. And we may hear from for the first time what the full defense will be mounted for Elizabeth Holmes.”
“We know from the pre-trial pleadings that it will have something to do with allegations of abuse from her co-defendant and former colleague at Theranos (President) Sunny Balwani. But we don’t know exactly how that is going to play out.”
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The couple are no longer together — Holmes has since married Billy Evans, a 27-year-old heir to Evans Hotels, and has had a child.
Meanwhile, Balwani faces a separate federal fraud trial that is set to begin on Jan. 11, 2022.
Sklansky said abuse claims are very rare in fraud cases.
“We are going to learn something interesting (in opening statements). What the nature of the claim is that Elizabeth Holmes is making regarding the effects of the abuse on her state of mind,” he said. “We know she’s not claiming insanity. We know that the argument is that because of the abuse she was suffering, she believed the truth of the representations that Theranos was making, but we don’t know exactly what the claim is about how that happened.”
A diverse jury of seven men and five women — ranging in age from 19 to the 60s — will hear the evidence. If they find Holmes guilty, she would face as much 20 years in prison.
Holmes, who was present for both days of questioning as well as when the jury was selected, was indicted more than three years ago on a dozen federal fraud and conspiracy charges over allegations she knowingly misled investors, patients, and doctors about the capabilities of her company’s proprietary blood testing technology. She has pleaded not guilty.
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The trial, which has been delayed several times due to the ongoing pandemic and further postponed due to the birth of Holmes’ first child in July, is expected to last roughly 13 weeks.
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