SAN JOSE, Calif. (AP) — A federal prosecutor on Thursday described Theranos CEO Elizabeth Holmes as a shameless fraudster who duped investors and patents while concealing dangerous defects in her startup's blood-testing technology.
Prosecutor Jeff Schenk opened his closing argument in Holmes' criminal fraud trial by painting a sordid portrait of Holmes, once a Silicon Valley billionaire — on paper — now trying to avoid conviction on fraud charges that could result in a 20-year prison sentence.
Lawyers for Holmes are making make their own final arguments.
“Elizabeth Holmes was building a business and not a criminal enterprise,” said her lawyer Kevin Downey as he began his closing argument.
The trial has been underway for three months, and the jury will weigh 11 felony counts of fraud and conspiracy facing Holmes, 37.
As he methodically walked the jury through the testimony of the 29 witnesses called by the government, Schenk emphasized that Holmes had a critical choice to make on several occasions during her 15-year reign running Theranos. Holmes could have acknowledged troubling flaws in Theranos’ blood-testing technology, Schenk contended, but she covered them up instead as part of her pursuit of fame and fortune.
“She chose fraud over business failure,” Schenk told the jury. “She chose to be dishonest. This choice was not only callous; it was criminal.”
While Schenk made the case for conviction, Holmes peered at both the prosecutor and the jurors from across a packed courtroom in San Jose, California. Just a few feet behind her, Holmes' mother and current partner, Billy Evans, sat in the front row listening intently, as did her father.
Schenk occasionally played recordings of separation conversations Holmes had with a group of Theranos investors in December 2013 and with a Fortune magazine reporter in May 2014. In both recordings, Holmes makes a series of inaccurate and exaggerated comments about the capabilities of Theranos' technology and its purported contracts with the U.S. military that never materialized.
In other evidence displayed by Schenk, Holmes distorted the scope and prospects of partnerships that Theranos had allegedly struck with Walgreens and major drug makers, such as Pfizer.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
SAN JOSE, Calif. (AP) — The trial of fallen Silicon Valley star Elizabeth Holmes moves into its final phase Thursday when federal prosecutors and defense attorneys will present their final arguments to the jury that will determine her fate.
Holmes' criminal fraud trial has featured three months of often dramatic testimony and other evidence surrounding her 15-year reign as CEO of Theranos, a blood-testing startup she founded after dropping out of Stanford University when she was just 19.
Summations of the respective cases are expected to spill into Friday. U.S. District Judge Edward Davila will then hand off the case to a jury consisting of 10 men and four women, including two alternates. Deliberations are scheduled to continue through the holiday season if necessary.
Holmes, now 37, leveraged Theranos to woo billionaire investors while assembling a board of directors that included former U.S. Cabinet members spanning from the Nixon to Trump administrations while promising to revolutionize health care with a more humane, convenient and cheaper way to test blood.
Instead of relying on vials of blood drawn from veins, Theranos touted a technology that Holmes said would be able to scan for hundreds of diseases and other potential problems with a few drops of blood taken via a finger prick.
It was such a compelling concept that Theranos raised more than $900 million, struck partnerships with major retailers Walgreens and Safeway and turned Elizabeth Holmes into a Silicon Valley sensation with an estimated fortune of $4.5 billion.
But unknown to most people outside Theranos, the company's blood-testing technology was flawed, often producing inaccurate results that could have endangered the lives of patients who took the tests at Walgreens stores.
The problems, exposed in 2015 and 2016 by stories in The Wall Street Journal and the findings of a regulatory audit, led to Theranos' collapse in 2018. That, in turn, triggered felony charges against Holmes that could land her in prison for up to 20 years.
Government prosecutors have painted Holmes as a charlatan who duped investors, business partners and patients in pursuit of fame and fortune while positioning herself as a visionary similar her hero Steve Jobs, the co-founder of Apple. Holmes' lawyers have depicted her as a trailblazer who took a few wrong turns while running Theranos, but never committed any crimes.
In seven days on the stand, Holmes expressed some contrition while insisting she never stopped trying to refine Theranos' technology. She also blamed her former lover and business partner Sunny Balwani for many of the company's problems while accusing him of mental, emotional and sexual abuse that she said turned her into his pawn.
Balwani, Theranos' chief operating officer from 2009 until Holmes ousted him in 2016, faces similar criminal charges in a separate trial scheduled to begin early next year. His attorney has adamantly denied Holmes' allegations, but the jury in her trial never heard from Balwani, who intended to invoke his Fifth Amendment right against self-incrimination had he been been called to testify.
Michael Liedtke, The Associated Press
