SAN JOSE – Fallen biotech star Elizabeth Holmes was in court yesterday as jury selection began for her fraud trial in a case that rocked Silicon Valley.
Dressed in her trademark black clothing and wearing a blue mask due to the pandemic, the founder of the former high-flying start-up Theranos took in the proceedings from a seat at the defence table in the federal courtroom here.
Now 37, Holmes was a tech world celebrity whose multibillion dollar start-up looked set to revolutionise medical testing before it crashed and burned in a blaze of fraud claims.
She and former Theranos chief operating officer Ramesh “Sunny” Balwani, whom she dated for a time, are charged with conspiring to swindle Theranos investors and customers.
Holmes and Balwani are having separate trials, and recently disclosed documents indicate she plans to contend that she was abused and controlled by her former business partner.
Holmes faces charges of wire fraud and conspiracy to commit wire fraud that could see her jailed for up to 20 years.
“The charges are only allegations, not evidence,” US district court judge Edward Davila told prospective jurors, noting that prosecutors would need to present evidence to support the charges.
Davila expected to go through scores of people over the course of a day or two before seating the 12 who will be entrusted to decide Holmes’ fate.
The court will also pick alternate jurors who will act as backup members of the panel if needed during a trial likely to last at least 13 weeks.
Defense attorney Kevin Downey was keen to ferret out jury candidates who may have seen news coverage of Holmes or Theranos.
Through the morning, juror after juror told of seeing either a news article, documentary, book, or headline about the Theranos saga.
Davila pressed each person regarding whether they could still weigh the evidence without bias, getting assurances that would be the case.
It remained to be seen whether defence attorneys would urge the judge to eliminate any of those people as jury prospects.
Visionary or villain?
When she launched the diagnostics company Theranos in 2003, at the age of just 19, the charismatic Holmes promised results that were faster and cheaper than traditional laboratories, running an analytical gamut on just a few drops of blood.
Political figures like Henry Kissinger and former defence secretary James Mattis were drawn to the company’s board and media mogul Rupert Murdoch invested cash in what seemed to be a sure-fire winner.
Holmes was lauded as a visionary, drawing comparisons with Apple founder Steve Jobs.
But years of hype, and billions of dollars later, those promises unspooled; the miracle machines did not work.
And, say prosecutors, Holmes knew it, yet continued to lie to investors, doctors and patients so she could raise more than US$700 million (RM2.9 billion) for the company.
At one point, she had a net worth estimated at US$3.6 billion, according to Forbes magazine. At the time, she was the youngest billionaire not to have inherited her fortune.
Jurors could hear from former board members like Kissinger and Mattis, as well as from Murdoch after witness testimony begins on September 8.
They may also hear from patients who were victims of the faulty tests, and received misdiagnoses of cancer, HIV or pregnancy.
The most eagerly awaited testimony could come from Holmes herself, if she decides to take the stand.
According to John Carreyrou, the Wall Street Journal reporter who first broke the story and has since written a book about the scandal, Holmes was a true believer in her vision of cheap blood tests – even if she knew the facts didn’t really fit.
In 2018, the Securities and Exchange Commission presented the Theranos case as a lesson for Silicon Valley, a warning against the “fake it till you make it” culture.
“So far, Silicon Valley has gotten away with almost every misdeed you can think of,” said academic and author Vivek Wadhwa, who has been tracking the Theranos case.
“Just the fact that she could end up going to jail is a big deal, because it hasn’t happened before.”
The trial has been postponed several times – most recently because Holmes had a child early last month. – AFP, September 1, 2021
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