The trial of Theranos founder Elizabeth Holmes finally begins

The trial of Elizabeth Holmes, the once-leotard biotech founder who fell from grace to global attention, is expected to finally begin on Tuesday, more than three years after her blood-testing company Theranos was accused of mass fraud.

Holmes, 37, and his business partner Ramesh “Sunny” Balwani face 10 counts of cable fraud and two counts of conspiracy to commit cable fraud, stemming from allegations that intentionally misled consumers and investors. with a revolutionary blood testing technology that just didn’t. exist. The scheme shot up Theranos’ valuation to $ 9 billion, while allegedly misleading investors and providing consumers with false medical reports.

Holmes and Balwani pleaded not guilty to all charges in 2018 after a grand federal jury chose to charge them. Holmes left the post of CEO of Theranos, but remained on the company’s board until its dissolution later that year.

The trial began in August 2020, but was delayed due to the COVID-19 pandemic and then delayed again due to Holmes’ pregnancy. Last month she gave birth to a baby.

The trial is expected to finally begin on Tuesday with the selection of the jury, which could be complicated, given the spread of claims against Theranos in recent years.

Following next week’s jury selection, Holmes is scheduled to be tried Sept. 8 in the federal court in the Northern District of California. If convicted, she could be sentenced to up to 20 years in prison and a fine of up to $ 3 million.

In 2015, questions began to arise about the validity of Theranos machines, which claimed to be able to quickly test dozens of health metrics based on a single drop of blood, which typically requires multiple vials and much longer. John Carreyrou of the Wall Street Journal led the indictment and found, through his investigations, that Theranos allegedly performed blood tests on standard machines produced by other companies and that almost everything Holmes had won so much acclaim did not. it was nothing more than an elaborate scam.

That research, which would lead to a litany of documentaries, scripted films, television series, podcasts, and books, was the beginning of the fall of Holmes. Companies that had partnered with Theranos to test their customers on the machines (Walgreens, Safeway and others) ended their alliances with it, and some sued them. An agreement reached with the U.S. Securities and Exchange Commission on additional allegations of fraud in 2018 prevented him from serving as a director or officer of any public company for a decade.

Calvary was an impressive setback for Holmes, who launched Theranos when he was 19 after leaving Stanford University. The story of a young businesswoman who was told how the next Steve Jobs caught the attention of the media and top investors, including the founders of Walmart, the Walton family, media mogul Rupert Murdoch and former Secretary of Education Betsy DeVos.

Many former government officials joined the Theranos board, including former secretaries of state George Shultz and Henry Kissinger. Shultz’s grandson, Tyler Shultz, who was a Theranos employee, was one of the complainants who helped expose the company’s alleged fraud.

Holmes and Balwani, with whom he once had a romantic relationship while running the company, agreed to undergo a separate trial. Its proceedings are expected to begin in January.