Elizabeth Holmes' trial begins with opening statements - CNN
9/8/21
(CNN Business)Elizabeth Holmes and the US government faced off in a San Jose federal courtroom in the long-awaited criminal trial of the founder and former CEO of Theranos.
In opening arguments Wednesday, the government sought to convince jurors that the Stanford University dropout intended to mislead investors, patients, and doctors about the capabilities of her company and its proprietary blood testing technology in order to take their money as she found herself running out of time and resources to make the technology work.
"This is a case about fraud, about lying and cheating to get money," Robert Leach, the lead prosecutor, said in an opening statement. "Out of time and out of money, the defendant decided to mislead," Leach added.
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"Elizabeth Holmes did not go to work every day intending to lie, cheat and steal. The government would have you believe her company, her entire life, is a fraud. That is wrong. That is not true," Lance Wade, an attorney for Holmes, said in opening remarks.
He described Holmes as "all in" on Theranos' mission of making testing cheaper and more accessible. "She worked herself to the bone for 15 years ... She poured her heart and her soul into that effort," he said. "In the end, Theranos failed and Ms. Holmes walked away with nothing. But failure is not a crime. Trying your hardest and coming up short is not a crime."
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The defense has more of a tightrope to walk with jurors with its opening statement, according to legal experts. Holmes' camp will seek to "balance their desire to surprise the government ... and their desire to let the jury know that there is another side to the government's story," Nancy Gertner, a former US federal judge and senior lecturer at Harvard Law School, said before the opening arguments began.
But Holmes also has an "advantage," according to George Demos, a former Securities and Exchange Commission prosecutor and adjunct law professor at the UC Davis School of Law. "She only needs to convince one of the 12 jurors that, as a woman, she was subjected to a markedly different standard, and that failure in business does not automatically equate to fraudulent activity," he said.
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The government's most recent list includes roughly 180 names, including former Theranos staffers: media mogul Rupert Murdoch, once reportedly the company's largest investor with
more than $100 million; David Boies, the
prominent attorney who was an investor, board member and legal defense for Holmes and Theranos for a time; as well as former Secretary of State Henry Kissinger and four-star general and future Defense Secretary James Mattis, both once board members. Patients who say they were affected by Theranos' inaccurate test results are also expected to testify.
Holmes' list, filed this week,
includes several prosecutors on the case, as well as officials from the US Food and Drug Administration and the Centers for Medicare and Medicaid Services. Additionally, Bill Frist, the former Senate majority leader, Riley Bechtel, former chair of the construction giant, and Richard Kovacevich, the former Wells Fargo CEO, all once Theranos board members, are on her list. Reporter John Carreyrou, who
broke the story of Theranos in 2015 for the Journal and subsequently wrote the best selling book "Bad Blood," is also on the list.
Both sides have indicated they have mountains of evidence to potentially introduce. The government's potential exhibit list runs nearly 240 pages and mentions correspondence between Holmes and Kissinger, emails from Murdoch to Holmes, and text messages between Holmes and Balwani. Holmes' filing runs nearly 60 pages and mentions emails from Balwani to Holmes, as well as numerous LinkedIn profiles and resumes.
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The trial, which is closed to cameras, is expected to last roughly 13 weeks.