The trial of Elizabeth Holmes, former CEO of the fallen Theranos, begins today with jury selection in the U.S. District Court in San Jose, California. It’s been nearly three years since Holmes and the company’s former president, Sunny Balwani, were charged with fraud—an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”
Theranos was in the business of portable blood analyzers and made claims that its product could conduct comprehensive blood tests from just drops of blood—when it turned out that the company was actually conducting most of these tests on commercial analyzers made by other companies. Theranos—with Holmes and Balwani at the helm—not only duped patients, but they also raised more than $700 million from investors as part of the grand scheme.
“Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’s blood testing laboratory services, even though, according to the government, the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests. It is further alleged that the tests performed on Theranos technology were likely to contain inaccurate and unreliable results.” – U.S. v. Elizabeth Holmes, et al. (U.S. Department of Justice)
Holmes and Balwani will be tried separately (Balwani’s trial begins in January 2022), but both face up to 20 years in prison if convicted of the following charges: two counts of conspiracy to commit wire fraud and nine counts of wire fraud. They also each could be fined up to $250,00, plus restitution, for each count of wire fraud and conspiracy to commit wire fraud.
Reports have also surfaced that Holmes will use psychological and emotional abuse as part of her defense, stating that she and Balwani (her now ex-boyfriend) were engaged in an “abusive intimate-partner relationship”, according to unsealed court documents. This alleged abuse has caused Holmes to suffer from conditions that include post-traumatic stress disorder and depression.