Elizabeth Holmes Trial: Her Biggest Risk

Elizabeth Holmes, the CEO of Theranos, Inc, a Silicon Valley startup blood testing company previously valued at $9 billion dollars is currently on trial in federal district court in San Jose, California. Ms. Holmes, along with her ex-boyfriend and COO Ramesh “Sunny” Balwani are charged with 10 counts of wire fraud and 2 counts of conspiracy to commit wire fraud with each count carrying a possible sentence of up to 20 years in prison, $250,000 fine, 3 years supervised probation, and victim restitution. The defendants will be tried separately with Balwani’s trial scheduled to begin in January 2022.

In short, the prosecution alleges Holmes and Balwani defrauded investors and patients by misrepresenting that their Theranos blood testing technology and innovative methods for drawing blood, testing blood, and interpreting patient data worked, when it allegedly did not work. As reportedly claimed, with one finger prick of blood, Theranos could run up to 200 blood tests, revolutionizing the blood testing industry and a cost saving for patients. The indictment also alleges that the defendants misrepresented the company’s financial condition, approvals from government agencies to investors, and made false and misleading statements in marketing materials and to the media.

So, is this a “case about fraud, about lying and cheating to get money…out of time, out of money, Elizabeth Holmes decided to lie…”?, as stated by the prosecution in their opening statement. The defendants, reportedly, raised over $400 million from investors of which approximately $155 million is alleged to have been communicated/transmitted electronically (telephone, email, etc.) across state lines (ie. wire fraud).

Or, is this a case about another failed startup where “failure is not a crime”, as stated by the defense in their opening statement.

And…it appears the defense may argue Defendant Holmes, (and maybe her best defense and tragic, if true), was apparently controlled and abused by Defendant Balwani, thus, she lacked the intent to defraud, a required element of each alleged crime.

Yet, putting the defendant Holmes on the stand may be the biggest risk of her life. Her fate will lie in her hands. Holmes will have to convince the jurors (or a juror) that she was controlled by Balwani to the extent that she could not form the requisite intent to defraud. When I was a domestic violence prosecutor, many defendants took the stand to their detriment.

However, Holmes is not your average defendant. She is a charismatic driven committed risk taker who persuaded and convinced many sophisticated high profile tech leaders, venture capitalists, major healthcare corporations, to invest hundreds of millions in her company, and recruited former US defense secretaries, secretary of state, media giants, and politicians to staff her board of directors.

Will she take the risk? She needs one juror to believe her. Criminal cases require unanimous verdicts.

If Holmes doesn’t take the stand, after her attorneys in their opening statement portrayed Balwani as abusive, “had a temper, could lash out”, and “there was another side to it (their relationship) that most people didn’t see”, thus, implying that Holmes was also abused by Balwani, tends to leave the jury wanting to hear from Holmes. However, she has every right not to take the stand under the fifth amendment (right not to incriminate self) and the jury will be instructed not to consider her right remain silent in determining her guilt or innocence. Yet, in my experience, jurors tend to not look kindly on unproven assertions made in opening statement by either party, when they can be proven by evidence other than by the defendant. A doctor’s opinion as to whether Holmes was a victim of abuse may not be enough to convince a jury, especially, if it becomes a battle of the experts.

Ultimately, the jury will decide whether Defendant Holmes, the “girl genius”, as she has been nicknamed and celebrated as the world’s youngest billionaire, is a victim or a con-artist. Meanwhile, while the evidence unfolds, Holmes, like every defendant, is innocent until proven guilty beyond a reasonable doubt.

Simply my opinion, what say you?

Here are some of the text messages between Balwani and Holmes, and my recent interview with San Francisco’s KRON4 news. You decide….

Additional Interviews: NewsNation, KRON4 San Francisco, FOX5 San Diego, KPIX CBS San Francisco, NBC Bay Area News, KRON4 San Francisco, KPIX5 San Francisco, KPIX5 San Francisco. Worth the watch!