After 11 weeks of testimony and many delays, prosecution rests case

On Nov 19, 2021

To make its case, the prosecution turned to scientists, doctors, retail executives, former employees and even a former Defense Secretary. Through them, the government attempted to unravel the many layers of the alleged deception that led investors and patients to believe Theranos’ false promises that it could accurately, reliably and efficiently conduct a range of tests using just a few drops of blood.

Holmes, a Stanford University dropout who founded Theranos in 2003 at age 19 with the lofty mission of revolutionizing blood testing, is facing nine counts of wire fraud and two counts of conspiracy to commit wire fraud. The government alleges she knowingly misled doctors, patients, and investors about her company’s blood testing capabilities in order to take their money. Now 37, Holmes faces up to 20 years in prison, as well as a fine of $250,000, plus restitution for each count of wire fraud and each conspiracy count. She has pleaded not guilty.

Jurors heard from investors who lost millions of dollars after having been provided information by Holmes about Theranos’ supposed blood testing capabilities. That information included, jurors learned, falsified documents purporting to be endorsements of its technology from two major pharmaceutical companies. Jurors heard from three patients; one was falsely told she was miscarrying after taking a Theranos test when, in fact, her pregnancy was viable; another was told she had HIV antibodies when previous and subsequent tests by other labs indicated she did not.

The trial now turns to the defense, which has given some indications of what its case could entail during opening arguments and cross examinations of government witnesses. Holmes’ team has sought to convince jurors that Holmes — who it frequently characterizes as a young, ambitious but inexperienced entrepreneur — acted in good faith, and lacked the intent to deceive. Instead, it has pointed at others for Theranos’ downfall.

Holmes’ attorneys have blamed the lab’s failings on lab directors and Theranos’ COO and president Ramesh “Sunny” Balwani, with whom Holmes was romantically involved and who was roughly two decades her senior. (Balwani is set to face federal prosecutors over the same charges next year; he has pleaded not guilty.)

“There were lots of misleading statements made during the lifespan of Theranos. The jury has now heard that evidence. But the government still has to establish intent — and that provides a real opportunity for the defense,” Mark MacDougall, a white-collar defense lawyer and former federal prosecutor, told CNN Business.

Many layers to the government’s case

Prosecutors sought to contrast the issues inside Theranos with how it was pitching itself to investors and business partners. The prosecutors also attempted to show that Holmes was at the center of it all, in an effort to address the trial’s three main questions: what Holmes knew, when she knew it, and whether she intended to deceive investors, patients and…