Elizabeth Holmes, the now-infamous former CEO of biotech startup Theranos, made her courtroom appearance this week for the opening arguments of her highly-publicized criminal fraud trial. Federal prosecutors have charged Holmes and former business partner/boyfriend, Ramesh Balwani, with defrauding investors who put down over $700 million into Theranos, a blood-testing company that Holmes and Balwani claimed would revolutionize the healthcare industry.
According to NPR, the Theranos founders convinced global powerhouses “from former President Bill Clinton to former Secretary of State Henry Kissinger to Mexican billionaire Carlos Slim” into investing in the company, which was valued at “more than $9 billion before its fall from grace”. Prosecutors claim that Holmes and Balwani manipulated figures and concealed flaws in the Theranos tests to achieve the dazzling valuation and secure funding.
An investigative report by The Wall Street Journal in 2015 revealed that the company had not implemented the cutting-edge technology that Holmes claimed, and instead used traditional blood-processing machines, many of which misdiagnosed patients with HIV.
Holmes and Balwani are being tried separately and both have pleaded not guilty. As part of her legal team’s defense strategy, Holmes is expected to testify against her ex-partner, accusing Balwani of manipulation and abuse that would have affected her mental state during the time of the alleged fraud.
As the trial kicked off this week, the prosecution relied on exposing Holmes’ purchases and lavish lifestyle with testimony from a former Theranos employee that managed the company’s finances. The trial was put on pause today due to potential COVID-19 exposure with a juror and is expected to pick up again next week pending a negative test result, reports Business Insider. We will continue to monitor this history-making case as it develops.
