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On Wednesday, at the start of a closely watched trial, Elizabeth Holmes’ lawyer told the federal jury that Elizabeth Holmes had failed to make her blood testing technology startup Theranos become A viable company, this is not a crime. The trial will examine her mental state and Silicon Valley’s propaganda culture.
“Elizabeth Holmes didn’t go to work every day to lie, deceive and steal,” Holmes’ lawyer Lance Wade told the jurors during the opening debate. “The government will make you believe in her company. Her life has been a scam.”
The 37-year-old Holmes “worked hard for 15 years trying to make laboratory tests cheaper and more accessible. She devoted her efforts to that effort,” Wade added.
“In the end Theranos failed. Ms. Holmes walked away with nothing. But failure is not a crime. Trying your best to fail is not a crime.”
The San Jose Federal Court trial is expected to become one of the most compelling tests of alleged misconduct in Silicon Valley, which is experiencing a historic boom in start-up funding.
Earlier, a U.S. prosecutor stated that Holmes deliberately deceived investors and customers of this once-popular startup company to get rich. Assistant U.S. Attorney Robert Leach said: “This is a case of fraud, lying and deception to obtain money.”
Prosecutors tried to link Theranos’ business troubles with Holmes’ actions, claiming that if it was unable to raise additional funds, the company was on the brink of financial bankruptcy at least twice.
“Time and money, Elizabeth Holmes decided to lie,” Leach said.
Holmes faces 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. She has pleaded not guilty. If convicted, she will face up to 20 years in prison.
She came to the San Jose court in a gray skirt suit and light-colored shirt, contrary to the black turtleneck sweater with the tailor’s logo when she became famous.
Theranos was founded by Holmes in 2003 and is headquartered in Palo Alto. It seems to be a successful start-up company that has discovered a new way to perform dozens of medical tests using a small amount of blood. In 2014, investors valued the company at US$9 billion.
But the prosecutors of the U.S. Department of Justice be accused Holmes and Ramesh Balwani, the former president of Theranos, claimed in 2018 that even though they knew that the company’s technology had reliability issues, they still falsely advertised the company’s technology.
Cheryl Bader, an associate professor of law at Fordham University and a former federal prosecutor, said: “The most important thing is for the prosecutor to prove that she knows these tests are useless.”
The prosecutors also accused Holmes and Balwani of misrepresenting Theranos’ financial situation to investors, claiming that the company’s revenue would reach $1 billion with sales of only $1 billion in 2015.
Holmes’ lawyers had previously tried to dismiss the case, saying that the indictment was too vague. Judge Edward Davila rejected their motion in October last year.
In March 2020, Davila ordered separate trials of the two defendants. Holmes’ lawyer argued that Balwani (and her ex-boyfriend) abused the founder of Theranos and affected her judgment. Balwani denied these claims.
The prosecutor submitted a list of possible witnesses, including former board member Henry Kissinger; attorney David Boyce, the company’s former external legal counsel; and media mogul Rupert Murdoch, an investment in Theranos By.
Holmes’ lawyers said they could ask former Wall Street Journal reporter John Carreru to testify that his investigation of Theranos helped facilitate the company’s downfall. It is not clear whether Holmes himself will testify in the trial, and the trial is expected to last for several months.