Elizabeth Holmes

Elizabeth Holmes' Fraud Case Heads to the Jury

Holmes is facing 11 felony counts of fraud and conspiracy alleging she duped investors, business partners and patients about Theranos' technology

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The jury that will decide whether former Theranos CEO Elizabeth Holmes turned her blood-testing startup into a massive scam finally got the case late Friday after a three-month-long trial that captivated Silicon Valley.

The hand-off came after lawyers for the opposing sides wrapped up a second day of painstaking presentations summing up their respective interpretations of on the evidence submitted to the jury through the testimony of 32 witnesses — including Holmes herself — and more than 900 exhibits.

The eight men and four women on the jury began their deliberations late Friday, and will take the weekend off before resuming Monday morning. They will weigh 11 felony counts of fraud and conspiracy facing Holmes. If convicted, Holmes, 37, faces up to 20 years in prison.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

A lawyer for former Theranos CEO Elizabeth Holmes on Friday likened her final days running the troubled blood-testing startup to a captain valiantly trying to save a sinking ship.

Had Holmes committed any crimes, she would have been scurrying to jump overboard like a scared rat, her lawyer, Kevin Downey, told jurors as he wrapped up roughly five hours of closing arguments. Federal prosecutors spent three hours Thursday explaining why the jury should convict her.

Referring to a 2016 turning point that threatened to ruin Theranos, Downey asked the jury: “Did she leave? No she stayed. Why? Because she believed in this technology."

As he did Thursday, Downey again depicted Holmes as a well-meaning entrepreneur who never stopped trying to perfect Theranos’ blood-testing technology and use it to improve health care.

“She believed she was building a technology that would change the world," Downey proclaimed Friday.

After federal prosecutor John Bostic completes a rebuttal argument, the case will head to the jury after more than 14 weeks of extensive testimony and an array of other evidence that includes more than 900 exhibits.

Bostic returned to many of the themes touched upon in Thursday's arguments when fellow prosecutor Jeffrey Schenk cast her as a charlatan who brazenly lied to become rich and famous. Those purported goals were achieved in 2014 when Holmes became a media sensation with an estimated fortune of $4.5 billion based on her 50% stake in Theranos.

Holmes, now 37, is facing 11 felony counts of fraud and conspiracy alleging she duped investors, business partners and patients about Theranos' technology. She repeatedly claimed that the company's new testing device could scan for hundreds of diseases and other problems with a few drops of blood taken with a finger prick instead of a needle stuck in a vein.

The concept was so compelling, Theranos and Holmes were able to raise more than $900 million from billionaire investors such as media magnate Rupert Murdoch and software titan Larry Ellison. The Palo Alto, California, company also negotiated potentially lucrative deals with major retailers Walgreens and Safeway and Holmes quickly began to grace the covers of national magazines as a wunderkind.

Unknown to most people outside Theranos the company’s blood-testing technology was flawed, often producing inaccurate results that could have endangered the lives of patients who took the tests.

After the flaws were exposed in 2015 and 2016, Theranos eventually collapsed. The Justice Department filed its criminal case in 2018.

“People lost money," Downey acknowledged Friday. “That is a bad event and a failure on (Holmes') part." But, he added, none of it was criminal.

Downey told the jury that Holmes didn't realize the scope of the problems until a Theranos laboratory director informed her in March 2016 that the company had to invalidate 60,000 of its past blood tests.

Had Holmes thought any crimes been committed, Downey posited, she would have tried to cover them up and perhaps sell some of her stock. Not only did she never sell a share, Downey said, she continued to try to salvage the company. Her turnaround efforts included ousting Theranos' chief operating officer, Sunny Balwani, who also had been her lover.

In a dramatic turnon the witness stand last month, Holmes testified that Balwani had been covertly controlling everything from her diet to friendships while subjecting her to mental, emotional and sexual abuse. Although the testimony cast Holmes as Balwani's pawn, Downey never mentioned the alleged abuse and its effects on her during his closing arguments.

That omission will leave it to the jury to consider whether partner abuse may have affected some of her decisions at Theranos. In the prosecution's closing argument, Schenk reminded the jurors that if they finding Holmes guilty of fraud won't mean they discounted her abuse allegations.

Balwani's lawyer adamantly denied Holmes' accusations in court documents that the jury never saw. Jurors also never heard from Balwani, who intended to invoke his Fifth Amendment right against self-incrimination had been called to testify. Balwani, 56, faces similar fraud charges in a separate trial scheduled to begin in February.

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