The Biggest Revelations From Elizabeth Holmes Testimony

Ms. Holmes, the founder of the failed blood testing start-up Theranos, testified for seven days to defend against fraud charges.,


Continue reading the main story

Supported by

Continue reading the main story

SAN JOSE, Calif. — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, ended her testimony on Wednesday in a fraud trial that has been billed as a test of start-up hubris and hype.

Ms. Holmes faces 11 charges of defrauding patients, doctors and investors by lying to them about Theranos’s technology and business relationships. She has pleaded not guilty.

Before Theranos collapsed, it was a Silicon Valley darling that promised to revolutionize health care through cheaper, simpler blood tests that took only a few drops of blood. Ms. Holmes raised nearly $1 billion from investors and was heralded as the next Steve Jobs. But a 2015 investigation by The Wall Street Journal revealed that Theranos’s blood-testing technology did not work, and the start-up unraveled.

In the first 11 weeks of Ms. Holmes’s trial, prosecutors called 29 witnesses. They testified that Ms. Holmes and Theranos had falsified reports, concealed the use of third-party blood testing devices, faked technology demonstrations and exaggerated the company’s marketing claims.

To rebut those arguments, Ms. Holmes, 37, took the stand on Nov. 19. She largely blamed others, said she was a true believer of Theranos’s technology and posited that her decisions were misunderstood. Kevin Downey, Ms. Holmes’s lawyer, has painted his client as a well-meaning entrepreneur whose actions to protect her company were twisted by prosecutors as fraud.

Here’s what has happened in Ms. Holmes’s testimony:

Passing the Buck

On Ms. Holmes’s final day on the stand on Wednesday, she reiterated her main argument: She never meant to deceive anyone. Any information she shared about Theranos, she said, came from experts inside the company.

Yes, she acknowledged, she had previously testified that as Theranos’s chief executive, the “buck” stopped with her and any problems were ultimately her responsibility. But she had thought everything she knew about Theranos was true.

Ms. Holmes concluded one portion of testimony with a mini speech about her intentions that harkened to her time delivering TED Talks and fireside chats as a business luminary.

“I wanted to convey the impact,” she said, describing the things she told investors, patients and the press about Theranos. “I wanted to talk about what this company could do a year from now, five years from now, 10 years from now. They weren’t interested in today or tomorrow or next month, they were interested in what kind of change we could make.”

Robert Leach, an assistant U.S. attorney and a lead prosecutor, finished his questioning by asking, “You understand they were entitled to truthful answers about Theranos’s capabilities?”

“Of course,” Ms. Holmes said, seeming startled at the abrupt ending.

Prosecutors Highlight Intent

Mr. Leach used repetition on Tuesday to hammer home a point during cross-examination: Ms. Holmes knew she was making deceptive claims about Theranos’s technology.

Mr. Leach tried eliciting testimony to emphasize that, even though investors said Theranos had led them to believe it had a contract with the U.S. military, the company never did. He repeated that Theranos’s blood analyzing machines were never deployed on a battlefield, never sent to Afghanistan, never sent to the Middle East, never sent to Iraq and never used for clinical care for soldiers abroad. He asked if Ms. Holmes was aware that Theranos’s devices had never been used on a battlefield, and if no one had ever told her that the device was being used for clinical care of soldiers.

Ms. Holmes answered in the affirmative for all the questions.

Mr. Leach used a similar technique for other topics. At one point, to show that Theranos never made revenue from its work with the drug maker GlaxoSmithKline, he repeatedly asked Ms. Holmes whether it had, posing the question once for each year from 2007 to 2014. Ms. Holmes said no each time.

When Ms. Holmes said she did not remember certain details, Mr. Leach often relied on her testimony from a deposition by the Securities and Exchange Commission. The S.E.C. had charged Ms. Holmes with fraud in 2018, and she had agreed to a settlement.

Ms. Holmes mostly appeared collected on Tuesday, though her face sometimes clouded over with frustration or concern. But she broke into a wide smile when delivering answers to Mr. Leach such as “I’m not sure, but I’m sure you’ll tell me.” She also smiled while correcting him when he misspoke, saying “billion” instead of “million.”

Prosecutors Take Aim

Under cross-examination, Ms. Holmes sometimes admitted to mistakes. Her handling of The Journal’s investigation into Theranos’s claims, she said, was a “disaster.”

“We totally messed it up,” she said.

Ms. Holmes also conceded, after prodding, that whistle-blowers including the former Theranos employees Tyler Shultz and Erika Cheung were right when they spoke up about problems in the start-up’s lab.

In other instances, Ms. Holmes pushed back, blaming a desire to protect Theranos’s trade secrets for her actions. She said she had not tried to “intimidate” John Carreyrou, the Journal reporter who exposed the company’s flaws, or Ms. Cheung and Mr. Shultz, who were sources for Mr. Carreyrou.

“We wanted to make sure our trade secrets weren’t disclosed,” she said.

In many cases, Ms. Holmes said, she simply didn’t remember. She didn’t recall joking about Mr. Carreyrou’s heritage, how many tests Theranos had run at the time of his article or what her salary was. Mr. Leach, the prosecutor, frequently pulled up text messages and emails to refresh her memory.

Abuse Accusations

Ms. Holmes closed her direct testimony with bombshell accusations of abuse against Ramesh Balwani, her boyfriend of more than a decade, who worked at Theranos and was indicted as a co-conspirator in fraud. Mr. Balwani, who goes by Sunny, was emotionally and physically abusive, she said.

Mr. Balwani frequently criticized her and controlled what she ate and her schedule, Ms. Holmes said. He kept her from members of her family because they were a distraction. And he told her to “kill” her old self to be reborn as a new, successful entrepreneur.

She also accused him of rape. “He would force me to have sex with him when I didn’t want to because he would say that he wanted me to know he still loved me,” she said through tears.

Mr. Balwani left the company in 2016, after a regulatory inspection revealed major problems in Theranos’s lab. Around that time, Ms. Holmes moved out, she testified. “He wasn’t who I thought he was,” she said.

His effect on her was so deep, Ms. Holmes said, that she wasn’t even sure how to quantify it. “He impacted everything about who I was, and I don’t fully understand that,” she said.

Mr. Balwani’s lawyers have denied all accusations of abuse. Mr. Balwani, who faces his fraud trial next year, has pleaded not guilty.

Faked Validation Reports

A key moment in the trial happened on the third day of Ms. Holmes’s testimony, when she said that she had personally added pharmaceutical company logos to Theranos reports, which were then used to persuade investors and partners to work with her start-up.

Prosecutors have held up the reports as evidence that Ms. Holmes lied about Theranos’s prospects. The reports bore the logos of the drug makers Pfizer and Schering-Plough, even though neither company had a hand in preparing or approving the reports and both recommended against using Theranos’s technology.

In her testimony, Ms. Holmes said she added the drug makers’ logos to the reports “because this work was done in partnership with those companies and I was trying to convey that.” She argued that she had not intended to deceive anyone and would have done things differently if she had known that investors and partners would view the logos as endorsements by the drug makers.


A Theranos report implied endorsements from pharmaceutical companies including Schering-Plough and Pfizer.

Deflecting Blame

Ms. Holmes has spent much of her testimony arguing that others at Theranos were responsible for the company’s shortcomings.

She said that Adam Rosendorff, Theranos’s lab director, was responsible for the clinical lab, and that a vice president, Daniel Young, was in charge of a partnership with the pharmacy chain Walgreens. She also highlighted the experience of her star-studded board of directors, implying that they should have given her better counsel.

Ms. Holmes’s understanding of Theranos’s technology was that “it performed well,” she said.

When Mr. Downey brought up a study done by scientists at Johns Hopkins University that concluded that Theranos’s technology was “novel and sound,” Ms. Holmes said, “Our team was really excited about this. This was some of the best laboratory experts in the world.”

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Carlos Chavarria for The New York Times

Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

Here are some of the key figures in the case ->

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Stephen Lam/Reuters

Holmes founded Theranos in 2003 as a 19-year-old Stanford dropout. She raised $945 million from investors and was crowned the world’s youngest billionaire, but has been accused of lying about how well Theranos’s technology worked. She has pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Justin Sullivan/Getty Images

Ramesh Balwani, known as Sunny, was Theranos’s president and chief operating officer from 2009 through 2016 and was in a romantic relationship with Holmes. He has also been accused of fraud and may stand trial next year. He has pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jefferson Siegel for The New York Times

David Boies, a prominent litigator, represented Theranos as its lawyer and served on its board.

He tried to shut down whistle-blowers and reporters who questioned the company’s business practices.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Getty Images

The journalist John Carreyrou wrote stories exposing fraudulent practices at Theranos.

His coverage for The Wall Street Journal helped lead to the implosion of Theranos.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jeff Kravitz/FilmMagic, via Getty Images

Tyler Shultz and Erika Cheung are former Theranos employees and were whistle-blowers. They worked at the start-up in 2013 and 2014.

Shultz is a grandson of George Shultz, a former secretary of state who was on the Theranos board.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Eric Thayer for The New York Times

James Mattis, a retired four-star general, was a member of Theranos’s board.

He went on to serve as President Donald J. Trump’s secretary of defense.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Edward Davila, a federal judge for the Northern District of California, will oversee the case.

Kevin Downey, a partner at the Washington law firm Williams & Connolly, is the lead lawyer for Holmes.

Robert Leach, an assistant United States attorney for the Northern District of California, will lead the prosecution for the government, along with other prosecutors from the U.S. attorney’s office.

Nov. 15, 2021

Item 1 of 9

Establishing Intent

To convict Ms. Holmes, the prosecution needs to prove that she intended to commit fraud. On the stand, Ms. Holmes has consistently said that she did not intend to deceive anyone.

She said that she concealed Theranos’s use of third-party devices — one of the prosecution’s major allegations against her — because she was worried others would copy modifications that Theranos had made to those devices. She also said her intent was not to hide that Theranos’s own machines could not do as many tests as she claimed.

“This was an invention that we understood from our counsel we had to protect as a trade secret,” Ms. Holmes said.

She added that Theranos’s marketing claims were aimed at establishing the start-up’s brand separate from that of its bigger partners. Ms. Holmes said she made those claims on the advice of the prominent advertising agency TBWAChiatDay and did not approve any materials she thought were inaccurate.

Ms. Holmes said she had “absolutely not” told Theranos’s lab personnel to hide anything about the start-up during a 2013 inspection by regulators.

Leave a Reply