Elizabeth Holmes denies misleading Theranos investors as prosecution wraps

Founder of blood testing company says she did not think she said her devices were actively being used on military helicopters

Elizabeth Holmes continued testimony in her own defense on Tuesday, in her sixth day on the stand in a widely followed trial centering on her now-defunct blood testing company, Theranos.

Holmes faces up to 20 years in prison over charges that she defrauded investors and patients, lying about the capabilities of the firm’s core blood-testing technology. She has pleaded not guilty.

The prosecution wrapped its cross examination of Holmes on Tuesday after nearly six hours of questioning. Her defense team will now offer its final questions before closing arguments, which are expected this week.

US attorney Robert Leach interrogated the 37-year-old regarding the promises she made investors about Theranos’s testing capabilities and what she was told about their shortcomings by scientists at the company.

Holmes answered Leach with a more edgy tone than she had in days past, raising her eyebrows and smiling at some repetitive inquiries. She frequently dodged questions, responding “I don’t know” and “I don’t remember”.

The prosecution introduced evidence that Theranos was performing very few of its own tests, showing through one 2013 email the company performed only three of its 12 tests on its own devices.

Leach also asked Holmes whether she told investors Theranos devices were being used on military helicopters. She said she did not think she did, as it would have been incorrect.

However, several witnesses already introduced during the trial, including investors and business partners such as Safeway CEO Steven Burd, testified they believed at the time that Theranos devices were actively being used on the battlefield.

When asked whether she was apprised of what was happening with lab shortcomings at Theranos, Holmes responded she was. She said she does not think she told Walgreens that the company was having accuracy problems with its tests.

Leach asked Holmes if she recollected dismissing concerns raised to Wall Street Journal reporter John Carreyrou by internal whistleblowers as coming from “two disgruntled lower level employees”, characterizing them as insignificant. Holmes said she “did not remember”.

In the preceding days, Leach grilled Holmes over her assertions she was not aware of problems with Theranos devices and interrogated her relationship with her co-executive and former romantic partner, Sunny Balwani.

Holmes previously testified that she was emotionally and physically abused by Balwani, who is 19 years her senior. She said the businessman closely controlled how she ran the business, who she spent time with and even what she ate. Balwani denies these allegations and faces his own fraud trial in 2022.

Leach has sought to prove Holmes had the final say over decisions at Theranos and showed the jury text messages from Balwani raising questions about the capabilities of the tests compared with what Holmes publicly advertised.

He also pointed to evidence Holmes worked to quash inquiries into the accuracy of Theranos tests from reporters as well as internal doubts from employee whistleblowers.

“I think I mishandled the entire process of the Wall Street Journal reporting,” Holmes said, in response to evidence suggesting she had aggressively pushed back against the 2015 reporting that would ultimately lead to the company’s downfall.

Over the last two months, prosecutors have repeatedly returned to one damning piece of evidence showing Holmes personally doctored documents. In one case, she affixed a Pfizer logo to a report sent to Walgreens executives to imply the pharmaceutical company had endorsed the findings. In another, she used a logo from drug firm Schering-Plough.

Holmes said she did so because the company had worked with Theranos on a previous project and said she regretted adding the logo. “I wish I hadn’t done that,” she told the jury.

Meanwhile, a number of Theranos lab directors called by prosecutors testified that their concerns over the technology’s shortcomings were largely ignored. Former investors said they were discouraged from scrutinizing the company.

Leach is expected to wrap up his cross examination of Holmes on Tuesday or Wednesday, after which Holmes’s defense team will have the opportunity to question her again.

The defense team for Holmes has indicated it will not call many more witnesses, which means the trial could draw to a close in the coming weeks.


Kari Paul

The GuardianTramp

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