SAN JOSE, Calif .– For more than three months, the accused donned a medical mask, hugged his mother, and entered the Robert F. Peckham Federal Building in San Jose, Calif., Where officials, scientists and investors accused her of fraud.
Now a jury of strangers will decide his guilt.
A jury of eight men and four women was seized Friday evening of the case of Elizabeth Holmes, the founder of the start-up of blood tests Theranos. Lawyers for both sides completed their oral argument earlier today in the nearly four-month trial, and Judge Edward J. Davila of the U.S. District Court for the Northern District of California read detailed instructions to the jury. The jurors will meet to deliberate on Monday morning.
In the courtroom on Friday morning, Kevin Downey, Ms Holmes’ attorney, spent nearly three hours trying to discredit each of the government witnesses and sow doubt in the minds of jurors. As he flipped through slides meant to dismantle prosecution evidence with headlines including “Not all potential problems are real problems,” a few jurors jotted down notes.
Mr Downey concluded by saying that Ms Holmes was not a criminal. “She believed she was building technology that would change the world,” he said, raising his voice and making dramatic gestures.
Ms. Holmes faces 11 wire fraud and conspiracy to commit wire fraud charges for allegations she made to investors and patients about Theranos’ technology and business relationships. She pleaded not guilty. If found guilty, she faces up to 20 years in prison.
The trial, which alternated between a media spectacle and a business school warning, became a moment of truth in Silicon Valley, where executives rarely faced the consequences of their exaggerated claims. If Ms Holmes is found guilty, prosecutors could start digging more aggressively into the overwhelmingly optimistic accounts of rocket growth in more start-ups.
Even if she is acquitted, some executives could still advance more cautiously in their optimistic speeches. Startups have been riding a wave of investor exuberance for nearly a decade, despite repeated warnings of bubble-like behavior that could lead to more disasters like Theranos.
“I suspect CEOs of similar companies will be more careful when speaking,” said Andrey Spektor, lawyer at Bryan Cave Leighton Paisner and former federal attorney for the eastern district of New York. He said the tapes of Ms Holmes presenting her business to investors and on television were among the most incriminating evidence in the case.
Prosecutors used dozens of witnesses and hundreds of documents to claim Ms Holmes, 37, knowingly lied to investors about Theranos. She said the company had military contracts when it wasn’t, that its technology was “globally validated” by pharmaceutical companies when it had not been and its machines could. perform hundreds of tests when she could only do a dozen.
On Thursday, Jeff Schenk, a Deputy U.S. Attorney and one of the top prosecutors, summed up the government’s case simply: When Theranos was nearly strapped for cash, Ms. Holmes could have let it fail. But instead she chose to defraud investors, he said.
“This choice was not only insensitive, it was criminal,” said Mr. Schenk.
Ms Holmes’ attorneys responded with a series of responses: Her colleagues told her the technology worked, she withheld information to protect trade secrets, she took action to resolve issues once she got it. had knowledge, and the larger account of Theranos was more complicated than the prosecution had led it to believe.
“The government is showing an event that looks bad, but at the end of the day when all the evidence accumulates, it’s not that bad,” Mr. Downey said. He showed slides illustrating the government’s heavy burden to prove ‘beyond a reasonable doubt’ that Ms Holmes knowingly lied to get money.
Ms Holmes’ defense relied primarily on her own testimony, which lasted seven days and turned the narrative of the case upside down. This was the first time Ms Holmes had recounted her version of the events leading up to Theranos’ collapse, which has been widely documented in podcasts, books, documentaries and reports.
At the booth, Ms. Holmes introduced herself as a hardworking and ambitious entrepreneur who believed in the technology and the potential of her business. Any exaggerations or misleading statements were just her big plans for the future, she hinted.
She further said that Ramesh Balwani, her former boyfriend and longtime business partner known as Sunny, had berated her and controlled all aspects of her life. She also accused him of sexual abuse, which he denied. Their relationship had been kept a secret at the time.
But in court, all aspects of the relationship – texts, emails, conversations, infidelities and the limited liability company through which they owned a home – were separated. Prosecutors have tried to show that the couple conspired to commit fraud. Ms Holmes’ attorneys have attempted to show she was a victim.
It is rare for defendants in white-collar criminal trials to speak out, and it is even rarer for them to present testimonies of abuse. Ms Holmes’ lawyers were to call an expert witness to link her allegations of domestic violence to the alleged fraud, but they failed to do so.
On Friday, John Bostic, a prosecutor, explained the statements Mr Schenk made the day before about the abuse allegations, telling the jury that he did not need to draw any conclusions about the relationship between Ms Holmes and Mr Balwani to deliver a verdict. . He also tried to separate the abuse from the fraud charges.
“There is no evidence regarding a connection between their relationship and the conduct she is accused of committing,” he said.
Ms Holmes’ testimony added to the spectacle of the trial, drawing large crowds of spectators who often waited more than five hours outside the courtroom for one of its limited seats. A man shouted that Ms Holmes was a ‘boss girl’ when she entered the building, and a trio of attendees pretended to sell black turtlenecks – Ms Holmes’ business uniform during the climb of Theranos – as part of a work of art.
Mr Downey concluded his argument on Friday by stating that Ms Holmes had not intentionally defrauded anyone. When Theranos got into trouble, he said, Ms Holmes didn’t try to cover up, cash in or run away like a criminal would.
“She sank with this ship,” he said.
Mr Bostic refuted Mr Downey by reiterating the government’s argument against Ms Holmes.
“The illness that plagued Theranos was not a lack of effort,” he said. “It was a lack of honesty.”