The criminal trial of Elizabeth Holmes, disgraced founder and CEO of blood-testing company Theranos, is set to begin Wednesday.
The long-awaited court case was delayed several times because of the pandemic and birth of the one-time billionaire’s son in July. Holmes was first indicted in June 2018. If convicted, she could face up to 20 years in prison, plus potential fines and restitution to victims.
Prosecutors from the U.S. Attorney’s Office for the Northern District of California charged Holmes and former Theranos executive Ramesh “Sunny” Balwani with two counts of conspiracy to commit wire fraud and 10 counts of wire fraud. The prosecutors allege Holmes and Balwani defrauded investors and patients by falsely claiming Theranos had developed “revolutionary” technology to run a wide range of tests from a single prick of blood, all while knowing the technology did not produce consistent, accurate, or reliable results.
Holmes’s trial commenced with jury selection on Aug. 31. Balwani’s trial is scheduled to begin in January 2022. Both defendants have pleaded not guilty to all charges.
Once considered a unicorn of Silicon Valley, Holmes was a 19-year-old Stanford dropout when she founded Theranos in 2003. She dazzled high-profile investors with her charm and intelligence, raising hundreds of millions of dollars through the likes of media mogul Rupert Murdoch, Walmart’s Walton family, and former Education Secretary Betsy Devos, among others. She also attracted a star-studded board of directors that included politicians such as former U.S. Secretaries of State George Shultz and Henry Kissinger as well as military leaders like retired U.S. Marine Corps General James Mattis. At its peak, Theranos was valued at $9 billion.
In 2015, former Wall Street Journal reporter John Carreyrou interviewed more than 60 former Theranos employees and revealed through a series of investigative articles the company had lied to employees, shareholders, board members, and the public about the capabilities of its blood-testing devices. The company collapsed in 2018.
Holmes and Balwani, once the president and chief operating officer of Theranos, were in a secret romantic relationship for more than a decade that followed a parallel trajectory to the rise and fall of the company. They first met in 2002 when she was 18 and he was 37 and married. Their romantic entanglement reportedly began around 2004 and ended amid the company’s downfall.
One critical aspect of Holmes’s defense could be that she suffered a “mental disease or defect” stemming from intimate partner abuse from Balwani—i.e., she acted under his influence during the period of the alleged conspiracy, according to unsealed court documents. Balwani has denied all allegations of abuse.
The irony of Holmes’s personal/private life
In her heyday, Holmes presented as large and in charge in her professional life, enchanting everyone from employees to high-powered investors with her cool charisma. Stanford chemical engineering professor Channing Robertson once said of Holmes that when he connected with her, he “could have just as well been looking into the eyes of a Steve Jobs or a Bill Gates.”
Now, she is alleging to be a long-term silent victim of abuse in her personal life. Her defense could rest on it.
Couched in the era of #MeToo, it’s dicey to consider discrediting a woman of abuse claims. Yet, in this writer’s opinion, there is also a bit of sleight of hand going on: She wants the jury to look over here—at her personal life—to divert focus from her actions in her professional life.
Carreyrou recently made a strong point to NPR about the outcome of Holmes’s case: “If she’s acquitted, the lesson that a lot of entrepreneurs and VCs [venture capitalists] in Silicon Valley are going to retain is that Holmes got away with it. If she’s convicted, I expect it to be a wake-up call in Silicon Valley to how much you can exaggerate, how much you can lie, how much you can experiment with your products before you cross that bright red line before you have to go to prison.”
Healthcare. Business culture. Gender roles. Human psychology. There will be a lot to unpack as the Holmes trial unfolds.