Defense attorneys attempted to describe Balwani as simply an investor in Theranos, but prosecutors used the defendant’s own text messages to debunk that claim
Clinical laboratory directors and pathologists following the criminal fraud trial of ex-Theranos President and COO Ramesh “Sunny” Balwani may be experiencing a case of déjà vu as the former executive of the now-defunct blood-testing company has his day in court.
Even as Balwani’s defense team attempted to distance their client from the company’s day-to-day decision-making activities, prosecutors followed an almost identical script from the previous fraud trial of Theranos founder Elizabeth Holmes conducted earlier this year. That trial led to her conviction on four counts of defrauding investors.
As was the case in the Holmes trial, text messages between the two Theranos top executives (Balwani and Holmes) are again center stage in the San Jose, Calif., courtroom of U.S. District Judge Edward Davila.
Balwani Texts Reveal an ‘Unhappy’ Man Under Pressure
Balwani, 56, worked alongside Holmes at Theranos from 2009 to 2016. He purchased $5 million in stock in the company and helped finance the startup by underwriting a $13 million loan. Like Holmes, Balwani faces a dozen counts of fraud and conspiracy to commit wire fraud.
Jurors in the Balwani trial were shown a collection of private text messages between Balwani and Holmes—who also was his girlfriend at the time—that shed light on their business and personal relationships.
“I am responsible for everything at Theranos,” Balwani wrote in a text exchange with Holmes, NBC Bay Area reported. “I worked six years day and night to help you … sad about where we are,” he wrote.
“I am very unhappy because my work sucks,” Balwani told Holmes in another text. NBC Bay Area also reported on other text messages that discussed meeting new investors, meeting revenue goals, and potentially buying a corporate plane.
Just like former Theranos CEO/founder Elizabeth Holmes, former Theranos president/COO Ramesh “Sunny” Balwani (above) faces a dozen counts of fraud and conspiracy to commit wire fraud. Clinical laboratory directors will be particularly interested in the outcome of these trails since the responsibility of CLIA-laboratory directors to report anomalies in medical laboratory testing played a key part in defense testimony. (Photo copyright: The Guardian.)
Defense Counterattacks with Expert Testimony
Balwani’s defense team launched a counterattack the following day when witness Constance Cullen, PhD, a former immunologist at Schering-Plough, stated on cross examination that she dealt only with Holmes and never met Balwani or other Theranos executives, NBC Bay Area reported.
During Holmes’ trial, Cullen testified that Holmes had used the Schering-Plough logo without authorization on studies presented to potential investors which aimed to validate Theranos’ blood-testing technology.
Balwani’s defense team previously described him as a Theranos “shareholder” in an effort to distance him from executive decisions that allegedly misled Theranos investors about the startup’s revenues and accuracy of the company’s “revolutionary” Edison blood-testing device, which Theranos claimed could perform hundreds of clinical laboratory tests using a finger-prick of blood.
According to additional NBC Bay Area coverage of the trial, a former Walgreens executive testified he worked closely with Balwani during the drugstore chain’s failed multiyear partnership with Theranos, which included a $50 million investment to bring in-store medical laboratory testing to its pharmacies.
“As a person who was an investor and essentially serving as the chief operations officer, Sunny Balwani absolutely was intimately involved in the Walgreens relationship and all the relationships Theranos had,” chief legal analyst for Esquire Digital and editor of Today’s Esquire, Aron Solomon, JD, told NBC Bay Area in a video interview.
NBC Bay Area reported that prosecutors introduced text messages between Balwani and Holmes in which Balwani admitted he did not inform Walgreens that third-party equipment—not the Theranos Edison device—was being used for much of the actual clinical laboratory testing done in Walgreens stores.
Prosecutors Claim Balwani, Holmes Worked ‘Together’ to Defraud Investors
Earlier in April, government lawyers responded to claims from Holmes’ defense team that Judge Davila should set aside the convictions in Holmes’ fraud case because evidence at trial did not support a guilty verdict, Fortune reported.
The prosecutors countered in a court filing that the “overwhelming weight of the evidence admitted at trial supports the jury’s conviction” of conspiracy to commit wire fraud and fraud on Theranos investors.
Prosecutors maintained the Holmes trial was “replete with examples” of Holmes and Balwani “working together and conspiring to effectuate a scheme to defraud investors.” The two “were constantly in communication via email, text message, and in-person meetings” about the company’s laboratories, financials, patient blood-testing, and relationships with Walgreens, investors, and visits by regulators, the Fortune article noted.
Holmes was convicted on January 3, 2022, on three counts of wire fraud and one count of conspiracy to commit wire fraud. Her sentencing date is September 26. She faces up to 20 years in prison but remains free on bond while awaiting sentencing. Balwani’s trial is ongoing.
Clinical laboratory managers and pathologists following the Theranos saga with interest should expect more revelations in the weeks to come. Balwani’s trial, which began in March, is expected to last at least three months.
Like Holmes, Balwani faces 12 counts of fraud and conspiracy to commit wire fraud for allegedly misleading investors, patients, and others about blood-testing startup’s technology
Clinical laboratory managers and pathologists are buckling up as the next installment of the Theranos story gets underway, this time for the criminal fraud trial of ex-Theranos President and COO Ramesh “Sunny” Balwani.
In one text to Holmes, Balwani wrote, “I am responsible for everything at Theranos,” NBC Bay Area reported.
Partners in Everything, including Crime, Prosecutors Allege
According to the Wall Street Journal (WSJ), prosecutors are following the Holmes trial playbook. They focused their opening arguments on the personal and working relationships between the pair, tying Balwani to Holmes’ crimes at the Silicon Valley blood-testing startup.
As second in command at Theranos, Balwani helped run the company from 2009 to 2016. He also invested $5 million in Theranos stock, while also underwriting a $13 million corporate loan.
“They were partners in everything, including their crimes,” Assistant US Attorney Robert Leach told jurors, the Mercury News reported. “The defendant and Holmes knew the rosy falsehoods that they were telling investors were contrary to the reality within Theranos.”
Leach maintained that Balwani was responsible for the phony financial projections Theranos gave investors in 2015 predicting $990 million in revenue when the company had less than $2 million in sales.
Former Theranos President and COO Ramesh “Sunny” Balwani (above) is seen arriving at the federal court in San Jose, California, for the start of his federal fraud trial. Clinical laboratory leaders and pathologists who followed the trial of ex-Theranos founder and CEO Elizabeth Holmes will no doubt be interested in what can be learned from this trail as well. (Photo copyright: Jim Wilson/The New York Times.)
“This is a case about fraud. About lying and cheating to obtain money and property,” Leach added. Balwani “did this to get money from investors, and he did this to get money and business from paying patients who were counting on Theranos to deliver accurate and reliable blood tests so that they could make important medical decisions,” the WSJ reported.
Defense attorneys downplayed Balwani’s decision-making role within Theranos, pointing out that he did not join the start-up until six years after Holmes founded the company with the goal of revolutionizing blood testing by developing a device capable of performing blood tests using a finger-prick of blood.
“Sunny Balwani did not start Theranos. He did not control Theranos. Elizabeth Holmes, not Sunny, founded Theranos and built Theranos,” defense attorney Stephen Cazares, JD of San Francisco-based Orrick, said in his opening argument, the WSJ reported.
The trial was expected to begin in January but was delayed by the unexpected length of the Holmes trial. It was then pushed out to March when COVID-19 Omicron cases spiked in California during the winter.
Balwani’s trial is being held in the same San Jose courthouse where Holmes was convicted. Balwani, 56, is facing identical charges as Holmes, which include two counts of conspiracy to commit wire fraud and 10 counts of wire fraud. He has pleaded not guilty.
Holmes, who is currently free on a $500,000 bond, will be sentenced on Sept. 26, Dark Daily reported in January.
Judge Excludes Jurors for Watching Hulu’s ‘The Dropout’
During jury selection in March, some jurors acknowledged they were familiar with the case, causing delays in impaneling the 12-member jury and six alternates. US District Court Judge Edward Davila excluded two potential jurors because they had watched “The Dropout,” Hulu’s miniseries about Holmes and Theranos. Multiple other jurors were dropped because they had followed the Holmes trial in the news, Law360 reported.
When testimony began, prosecutors had a familiar name take the stand—whistleblower and former Theranos lab tech Erika Cheung, who provided key testimony in the Holmes trial. During her testimony, Cheung said she revealed to authorities what she saw at Theranos because “Theranos had gone to extreme lengths to [cover up] what was happening in the lab,” KRON4 in San Francisco reported.
“It was important to report the truth,” she added. “I felt that despite the risk—and I knew there could be consequences—people really need to see the truth of what was happening behind closed doors.”
Nevada State Public Health Laboratory (NSPHL) Director Mark Pandori, PhD, who served as Theranos’ lab director from December 2013 to May 2014, was the prosecution’s second witness. Pandori testified that receiving accurate results for some tests run through Theranos’ Edison blood testing machine was like “flipping a coin.”
“When you are working in a place like Theranos, you’re developing something new. And you want it to work. Quality control remained a problem for the duration of my time at the company. There was never a solution to poor performance,” Pandori testified, according to KRON4.
While the defense team has downplayed Balwani’s decision-making role—calling him a “shareholder”—Aron Solomon, JD, a legal analyst with Esquire Digital, maintains they may have a hard time convincing the jury that Balwani wasn’t a key player.
“There’s no way the defense is going to be successful in painting Sunny Balwani in the light simply as a shareholder,” he told NBC Bay Area. “We know that, literally, Sunny Balwani was intimately involved with Theranos, because he was intimately involved with Elizabeth Holmes,” Solomon added.
Little Media Buzz for Balwani, Unlike Holmes Trial
While the Holmes trial hogged the media spotlight and drew daily onlookers outside the courthouse, reporters covering Balwani’s court appearances describe a much different atmosphere.
“The sparse crowd and quiet atmosphere at US District Court in San Jose, Calif., felt nothing like the circus frenzy that engulfed the same sidewalk months earlier when his alleged co-conspirator and former girlfriend, Elizabeth Holmes, stood trial on the same charges,” The New York Times noted in its coverage of the Balwani trial.
The Balwani trial may not reach the same headline-producing fervor as the Holmes legal battle. However, clinical laboratory directors and pathologists who follow these proceedings will no doubt come away with important insights into how Theranos went so terribly wrong and how lab directors must act under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).
Start of ex-Theranos president and COO Sunny Balwani’s federal trial will be pushed to mid-March due to COVID-19 spike in California
Just when most clinical laboratory managers and pathologists thought the guilty verdict in the Elizabeth Holmes fraud case would bring an end to the saga, we learn her chapter in the Theranos story will instead extend another eight months to September when the former Silicon Valley CEO will be sentenced. However, a brand-new chapter will begin in March when the fraud trial of ex-Theranos president and COO Ramesh “Sunny” Balwani begins.
Holmes’ fraud trial concluded on January 3 with the jury convicting her on one count of conspiracy to defraud investors and three counts of wire fraud after seven days of deliberation and nearly four months of trial proceedings.
Holmes remains free on a $500,000 bond while awaiting sentencing.
Elizabeth Holmes is seen above arriving at the US District courthouse in San Jose, Calif. On January 3, the former Theranos CEO was convicted on three counts of wire fraud and one count of conspiracy to defraud investors. US District Judge Edward Davila set Holmes’ sentencing date for September 26. Clinical laboratory directors and pathologists who have closely followed the trial will have to wait eight months for the conclusion of this chapter in the Theranos saga. (Photo copyright: The Guardian.)
“I would be utterly shocked if she wasn’t sentenced to some term of imprisonment,” Amanda Kramer, JD, a former federal prosecutor who is now a partner with New York-based Covington & Burling LLP, told NPR.
“What is the sentence that will deter others who have a failing business from making the choice to commit fraud, rather than owning up to the failings and losing their dream?” she added.
Holmes, 37, faces a possible prison sentence of 20 years in prison as well as a $250,000 fine and possible restitution. But some legal experts expect a much shorter prison sentence for the disgraced CEO, who has no prior criminal history and is a first-time mother of a son born last July.
While sentencing typically takes place within a few months of a verdict being reached in a federal criminal trial, US District Judge Edward Davila set 1:30 p.m. September 26, 2022, as the date for Holmes’ sentencing hearing, according to his order dated January 12.
The Mercury News reported the lengthy delay in sentencing may be due to the start of Balwani’s upcoming trial on identical fraud charges. The delay in Holmes’ sentencing will allow for Balwani’s trial to begin in mid-March after being pushed back one month due to a spike in COVID-19 cases in California, The Mercury News reported.
Judge Davila will preside over Balwani’s trial as well.
Jury Acquits Holmes on Patient-related Charges
Holmes was acquitted of conspiracy to defraud patients of the now-defunct blood-testing laboratory and the jury failed to reach a unanimous decision on three other wire fraud charges.
University of Michigan Law Professor Barbara McQuade, a former US Attorney and an NBC News Legal Analyst, told CNBC she expects prosecutors to rethink their strategy in the Balwani trial based on the jury’s acquittal of Holmes on conspiracy and fraud charges involving Theranos patients.
“Knowing that this jury acquitted on all of the patient counts, I think that strategically, they should look to find a more direct way to explain why that is part of the fraud, that they necessarily knew that ultimately patients would be defrauded. And that although they didn’t know these individual patients by name, they knew that they existed in concept,” McQuade said.
One of the jurors in the Holmes’ trial, Wayne Kaatz, told ABC News he and other jurors were dismayed by their inability to come to a unanimous consensus on the three of the charges. A mistrial was declared on those three counts.
“We were very saddened,” Kaatz said. “We thought we had failed.”
Did Holmes Charm the Jury?
When Holmes dropped out of Stanford at age 19 to form Theranos, her goal, she claimed during testimony, was to transform healthcare by creating a blood-testing device capable of performing hundreds of clinical laboratory tests using a finger-stick of blood. She became a Silicon Valley sensation because of her charisma and charm, which she used to sell her dream to big money investors such as Oracle co-founder Larry Ellison and former US Secretary of State George Shultz.
Kaatz acknowledged Holmes’ personality also impacted the jury.
“It’s tough to convict somebody, especially somebody so likable, with such a positive dream,” Kaatz explained to ABC News, noting, however, that he voted guilty on the three counts on which the jury could not agree. “[We] respected Elizabeth’s belief in her technology, in her dream. [We thought], ‘She still believes in it, and we still believe she believes in it.’”
In the light of Holmes’ conviction, McQuade suggested it would not be shocking to see Balwani consider a plea deal in exchange for a lighter sentence.
“Could we perhaps, enter a guilty plea and get a reduction for acceptance of responsibility?” she said. “It’s certainly something that you have to look at.”
And so, the saga continues. Clinical laboratory directors and pathologists who followed Holmes’ trial with rapt interest should prepare for a new set of twists and turns as Ramesh Balwani prepares to face his own day in court.
As a Theranos insider and whistleblower, Tyler Schultz was able to provide information about the ongoing failures in medical laboratory testing at the once-high-flying Theranos to regulators and at least one journalist
What’s it like to be a whistleblower in a high-profile clinical laboratory? Few clinical laboratory workers will ever know. But former Theranos employee Tyler Shultz does know, after helping to expose the Silicon Valley blood-testing startup’s deceptions.
The 31-year-old Shultz reportedly celebrated the news of former Theranos CEO Elizabeth Holmes’ conviction on four charges of defrauding investors with champagne, joy, and a healthy dose of vindication, according to NPR.
“This story has been unfolding for pretty much my entire adult life,” Tyler Shultz (above), whistleblower in the Elizabeth Holmes fraud trial, told NPR from his parents’ home in Silicon Valley. “All of a sudden, it was just a weight was lifted. It’s over. I can’t believe it’s over,” he added. A former employee of now defunct clinical laboratory company Theranos, Shultz is CEO at Flux Biosciences, a company he co-founded. (Photo copyright: Deanne Fitzmaurice/NPR.)
Shultz Interns Briefly at Theranos
In 2011, Shultz was a biology major at Stanford University—where Elizabeth Holmes herself briefly attended—when his grandfather, former US Secretary of State George Shultz, a Theranos board member, introduced him to Holmes.
According to NPR, the younger Shultz was so impressed by the charismatic Holmes that he asked her if he could intern with Theranos after his junior year. Following his internship, he accepted a full-time position as a research engineer with Theranos, a stint that lasted only eight months. Shultz quit Theranos the day after he emailed Holmes in 2014 to alert her to failed quality-control checks and other troubling practices within the company’s clinical laboratory.
According a 2016 profile of Shultz in The Wall Street Journal (WSJ), his email to Holmes resulted in a “blistering” reply from then-Theranos President and COO Ramesh “Sunny” Balwani, who “belittled Shultz’s grasp of basic mathematics and his knowledge of laboratory science.”
Yet, Shultz told NPR, “It was clear that there was an open secret within Theranos that this technology simply didn’t exist.”
After leaving Theranos, Shultz became a key source for the WSJ’s 2015 exposé of Theranos. Using an alias, he also contacted state regulators in New York about the Theranos Edison blood-testing device’s shortcomings. In response, Theranos responded with threats of lawsuits and intimidation, the WSJ reported.
In an interview with CBS News, Shultz said, “I am happy that she was found guilty of these crimes and I feel like I got my vindication from that, and I feel good about that.”
Whistleblowers Were Critical to WSJ’s Investigation
Former WSJ reporter John Carreyrou, who authored the newspaper’s investigative series into Theranos, credits the Theranos whistleblowers for blowing the cover on the clinical lab company’s deceptions.
“I would not have been able to break this story without Rosendorff, Tyler, and Erika,” Carreyrou told NPR, referring to Shultz and two additional Theranos whistleblowers: one-time Theranos Laboratory Director Adam Rosendorff and laboratory associate Erika Cheung. “Tyler and Erika were corroborating sources, and that was absolutely critical.”
In the interview with CBS News, Tyler described the damage his role as a Theranos whistleblower caused to his relationship with his grandfather, former Secretary of State and Theranos board member George Shultz. Tyler said the elder Shultz did not believe his claims about Theranos’ regulatory deficiencies and the Edison device’s shortcomings until he neared the end of his life.
“That was extremely tough. This whole saga has taken a financial, emotional, and social toll on my relationships. The toll it took on my grandfather’s relationship was probably the worst. It is tough to explain. I had a few very honest conversations with him,” Shultz told CBS News.
While the elder Shultz never apologized to his grandson, Tyler said his grandfather ultimately acknowledged he was right.
“In one of my last conversations with him he told me a story about how he got Elizabeth invited during fleet week in San Francisco to go give a speech to United States Navy sailors. He said with tears in her eyes, she told the room about how she was so honored and humbled that her life’s work would be saving the lives of United States servicemen and women,” Shultz recalled in the CBS News interview.
“He said he could not believe that anybody could get in front of these men and women who are willing to put their lives in front of our country and lie directly to their face as convincingly as she lied,” he added.
George Shultz died in February 2021.
Jury’s Ruling on Defrauding Patients
In an interview with CNBC, Shultz said his one disappointment with the verdict was that Holmes was not found guilty of defrauding patients. Calling the patients “the real victims,” Shultz said, “I did what I did. I stuck my neck out to protect those patients, not to protect Betsy DeVos’ $100 million investment.” (The jury voted Holmes guilty on three counts of wire fraud and one count of conspiracy to commit fraud against Theranos’ investors, but not guilty on conspiracy to defraud and commit wire fraud against Theranos patients.)
Tyler Shultz was listed as a potential witness in the Holmes trial but was not called to take the stand. He—along with many clinical laboratory directors and pathologists who have closely followed the Holmes trial—will now await news of Holmes’ sentencing. Holmes could face up to 20 years in prison for each guilty verdict, but she’s likely to receive a lighter sentence.
The trail of Ramesh Balwani is expected to begin sometime in March. That trial can be expected to produce additional revelations about the problems of Theranos and how and why management is alleged to have knowingly reported inaccurate clinical laboratory test results to thousands of patients.
Split verdict could still mean considerable prison time for the one-time high-flying Silicon Valley entrepreneur
In a trial generating unprecedented interest among clinical laboratory scientists, former Theranos CEO Elizabeth Holmes was found guilty in federal court this week on four charges of defrauding investors.
Holmes faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count, though sentencing experts predict a much lighter sentence for the 37-year-old whose birth of her first child caused one of multiple delays in the start of the three-month-long trial.
“I suspect she may get five to seven years in prison,” Justin Paperny, Founder of federal prison consultancy White Collar Advice, told Fortune. However, Paperny said Holmes will be unlikely to be eligible for early release in federal prison beyond a 15% reduction in prison time for good behavior.
“There is no real mechanism to really aggressively advance your release date in federal prison,” Paperny told Fortune.
Holmes was acquitted on four counts, while the jury failed to reach a decision on three counts. Judge Edward J. Davila of the US District Court, Northern District of California, who presided over the trial, will sentence Holmes at a later date. Holmes is expected to be allowed to remain free on bail until sentencing.
The graphic above, taken from a CNBC live report, shows the jury’s verdicts in all 11 charges, including those on which the jury did not arrive at a verdict. (Photo copyright: CNBC.)
Trial Delays Due to Pandemic, Holmes’ Pregnancy
According to ABC News, Holmes “expressed no visible emotion as the verdicts were read.” She did not respond to questions about the verdict as she left the courtroom and walked to a nearby hotel where she has stayed during seven days of jury deliberations.
“The jurors in this 15-week trial navigated a complex case amid a pandemic and scheduling obstacle,” US Attorney of the Northern District of California, Stephanie Hinds, told reporters Monday evening, according to ABC News. “I thank the jurors for their thoughtful and determined service that ensured verdicts could be reached. The guilty verdicts in this case reflect Ms. Holmes’ culpability in this large-scale investor fraud, and she must now face sentencing for her crimes.”
The decision followed an often-delayed trial in which the prosecution put 29 witnesses on the stand, most of whom reinforced the government’s contention that Holmes defrauded investors and patients as she worked to bring to market Theranos’ “revolutionary” Edison finger-prick blood-testing device. The prosecution also presented emails, text messages, and other documents that it said were evidence of Holmes’ deceptions.
Dark Daily covered all of this in multiple ebriefings, including the potential that the four CLIA-laboratory directors who held the top laboratory position in Theranos’ lab during Holmes’ tenure as CEO might be held accountable for their actions or inactions on some level.
Details of Charges and Guilty Verdicts against Holmes
According to the Mercury News, the jury returned guilty verdicts on four counts facing Holmes:
Count 1: Guilty of conspiracy to commit wire fraud against Theranos investors. This charge accused Holmes and Chief Operating Officer Ramesh “Sunny” Balwani, of “knowingly and intentionally” soliciting payments from investors with false statements about Theranos’ technology, its business partnerships, and its financial model.
Count 6: Guilty of wire fraud in connection with a 2014 investment of $38,336,632 made by PFM Health Sciences of San Francisco. Brian Grossman, PFM’s Chief Investment Officer, testified that his team was told Theranos had brought in more than $200 million in revenue, “mostly from the Department of Defense.” In realty, 2011 revenue came in at $518,000 and the company had no revenue in 2012 or 2013, according to Theranos’ former head of accounting.
Count 7: Guilty of wire fraud in connection with an October 2014 investment of $99,999,984 made by a firm associated with the family of former Education Secretary Betsy DeVos. Managing Director, Global Private Equity at Ottawa Avenue Private Capital, Lisa Peterson testified Holmes claimed Theranos’ technology was in use “on military helicopters,” and sent a report with a Pfizer logo touting the “superior performance” and accuracy of Theranos’ machines. The logo and follow-up questioning, Peterson said, led her to conclude that the report was prepared by Pfizer, which was false.
Count 8: Guilty of wire fraud in connection with an October 2014 investment of $5,999,997 from a company involving Daniel Mosely, the long-time lawyer for former US Secretary of State Henry Kissinger. Mosely testified he also was led to believe Pfizer had approved Theranos’ technology. In a letter to Kissinger, he called the report “the most extensive evidence supplied regarding the reliability of the Theranos technology and its applications.”
The illustration above shows Elizabeth Holmes being kissed on her head by her father after being found guilty in federal court on four charges of defrauding investors while CEO of now defunct blood-testing laboratory Theranos. (Graphic copyright: Vicki Behringer/ABC News.)
The jury of eight men and four women began deliberations on December 20 after closing arguments in the nearly four-month-long trial in San Jose, California. Holmes originally faced 12 counts of wire fraud and conspiracy to commit wire fraud. One count was dropped during the trial.
During a blistering three-hour closing argument, Assistant US Attorney Jeffrey Schenk hammered home the prosecution’s contention that Holmes choose to deceive investors and patients rather than admit failure in her quest to revolutionize healthcare by delivering a blood-testing device capable of running up to 200 laboratory tests using a finger-prick of blood.
“Ms. Holmes made the decision to defraud her investors, and then to defraud patients,” Schenk told jurors, according to CNBC. “She chose fraud over business failure. She chose to be dishonest with investors and with patients.”
The defense team put three witnesses on the stand, with Holmes emerging as a surprise witness in her own defense. She maintained she never intended to defraud anyone and instead relied on experts within her company for the claims she made about Theranos’ blood-testing device. During her seven days of testimony, she also alleged emotional, physical, and sexual abuse by Balwani. Balwani has denied in legal filings Holmes’ abuse allegations.
Holmes Wanted to “Change the World,” Defense Claims
In his closing argument, defense attorney Kevin Downey maintained Holmes’ intent was not to deceive but to “change the world.”
“At the end of the day, the question you’re really asking yourself is, ‘What was Ms. Holmes’ intent?'” Downey told jurors, according to Business Insider, “Was she trying to defraud people?”
The jury’s answer: “Yes.”
Clinical laboratory directors and pathologists will soon learn the price Holmes will pay for her deceptions when she is sentenced in coming weeks. Meanwhile, the start of Balwani’s fraud trial has been postponed to February 15, according to Bloomberg News.
