Former Theranos CEO Elizabeth Holmes will attend the US government fraud court hearing against her on May 5, 2021.
Former Theranos CEO Elizabeth Holmes promised a technological breakthrough, but it really was a house of cards, prosecutors said during a trial Wednesday.
“Miss Holmes went out, told the world, and told investors, we have tests with the highest accuracy rate,” said US assistant attorney Robert Leach, adding that her expert’s testimony “lies.”
The argument was in response to efforts by the defense, Dr. Stephen Master, an associate professor of pathology and laboratory in the University of Pennsylvania Medical School, from taking a stand. In 2013, after interviewing Holmes at a conference, Master said that her claims about Theranos’ miniLab technology “fell far short of previous claims”.
Holmes’ defenders argued that the master was used as a “parrot” by the government and that his conclusions about certain Theranos blood tests were “based on emails and customer complaints,” not practical experience.
Wednesday’s hearing was the second day of the argument about what evidence can be admitted and excluded from Holmes’ criminal fraud trial, which begins August 31st.
Prosecutors, among other things, alleged that Holmes was presenting an inappropriate defense in good faith.
“Efforts to return money to victims cannot undo the fraud once it is committed,” said John Bostick, another US assistant attorney.
The judge is expected to rule on critical motions, including whether to provide evidence of Holmes’ assets and expenses, private text exchanges and regulatory reports by the end of the week.
The hearing came when a former Theranos executive who had been close to Holmes in the company’s final days told CNBC that management was discussing Holmes’ resignation as CEO on several occasions. For Holmes, however, “that was a non-runner”.
“If she had resigned, I think she would have saved herself a lot of legal danger,” said the former Theranos manager, who asked not to be named. “Everyone who knows Elizabeth knows that she saw herself as a company, and I don’t think she can see the company going on without her.”
Holmes left Stanford at 19 to start Theranos. By the time the company collapsed in 2018, she had a six-figure salary and a multi-billion dollar stake in the blood testing startup.
However, an investigation by the Wall Street Journal found that the technology didn’t work as Holmes claimed it did. Now she faces a dozen fraud charges for falsely claiming that Theranos technology can perform dozens of blood tests on a drop or two of blood. She pleaded not guilty.
Despite the chaos in the final months of her reign, Holmes believed Theranos could still be saved.
Holmes achieved a partial victory this week when the judge ruled that defenders can refer to Silicon Valley’s hype culture to explain why Holmes exaggerated the technology behind Theranos.