By Allison Markman
New York City, New York
Theranos CEO Elizabeth Holmes’ fraud trial has begun, and the prosecution is out for blood. Holmes dropped out of Stanford University in 2004 to start the biotech startup Theranos, a company that claimed to be able to test for many illnesses using a single drop of blood.
Holmes is facing twelve counts of fraud and conspiracy to commit wire fraud over false claims she made about her blood testing company.
Questions about Theranos and the validity of its technology first arose in 2015 when the Wall Street Journal published a piece detailing the possible fraud of Theranos’ technology, writing that the tests Theranos claims to be able to run on “The Edison” (a Theranos patented device) could be run on other commercially available machines.
In 2018, Holmes and Sunny Balwani, her former boyfriend and executive at the company, were indicted. Prosecutors now intend to argue that the duo defrauded two groups of people: investors and patients.
In court, prosecutors will argue that Holmes intended to mislead investors into believing they held government contracts and that she exaggerated the company’s yearly profits. However, they will argue that Theranos’ most unlawful offense was their overestimation of the company’s technology and dishonesty regarding its abilities.
The company claimed that their own machinery, the Edison, could perform a variety of tests with only a finger prick of blood. Though promised reliable and affordable testing options, patients were met with untrustworthy or incorrect results about pregnancies, miscarriages, and AIDS.
In an effort to increase profits, Holmes even lobbied state governments to pass laws that would allow patients to have blood tests run without a prescription. This allowed anyone to walk into their local pharmacy where Theranos testing was available and order tests without medical oversight. To make matters worse, these customers most-likely received incorrect results.
After many delays due to COVID-19 and the birth of Holmes’ child, voir dire for the Holmes trial has begun. Opening statements will begin on September 8th.
Jury selection for this case will be difficult due to the familiarity the public has with the downfall of Theranos through the massive amount of documentaries, books, and podcasts on the issue.
According to court documents that were made public, Holmes may intend to argue that she was a victim of abuse by Balwani and acted on his orders. In filings, Holmes accused Balwani of a “pattern of abuse and coercive control.” In 2020, the judge decided to split Holmes’ and Balwanis' case so as not to complicate such claims.
Holmes' legal team hopes to demonstrate that Balwani was a controlling figure in the personal and business life of Elizabeth Holmes. In filings, Holmes claims that he controlled her clothing, food, sleep, finances, and friends. Holmes’ team also claims he monitored her phone calls and emails. Balwani denies these accusations.
To get a conviction of fraud charges, the prosecution must establish that Holmes intentionally defrauded investors and patients about the technology. Holmes' defense team may be able to argue that she always believed in the company and its technology.
The trial is expected to span many months, and if found guilty, Holmes could face several years in prison along with fines and restitution to her victims.
If she is put on the stand, Holmes could garner sympathy with the jurors. And though that may be another aspect of her defense, no one will know for certain what argument Holmes’ team will bring on the day.