Theranos Founder Elizabeth Holmes's Fraud Trial Set To Begin

Elizabeth Holmes in 2015. Image credit: Debby Wong/Shutterstock.com

Elizabeth Holmes, founder of now-defunct medical startup Theranos, is set to stand trial for up to 12 counts of fraud as the first phase of the trial, jury selection, begins today. If found guilty she faces up to 20 years in jail.  

In 2003, the Stanford University drop-out founded a company that began to attract big investments from household names. Theranos – started by Holmes when she was just 19 years old – drew investments in the hundreds of millions from Rupert Murdoch, Betsy DeVos, and the Walton family, with claims that it was creating a revolutionary medical machine that could conduct hundreds of blood tests, including for cancer and diabetes, from a single drop of blood without using needles.

The $9 billion company gained big contracts from the likes of Walgreens pharmacy, claiming it could produce fast, reliable, and non-costly results to patients using the service. By 2018 the company had collapsed after the claims were found to be fabricated and Holmes and her business partner and ex-boyfriend Ramesh “Sunny” Balwani were accused of defrauding both consumers who bought the tests and investors who believed in its capabilities. 

The case against Holmes (Balwani has a separate trial scheduled for February 2022) alleges that "in truth, Holmes and Balwani knew that Theranos purchased and used for patient testing third party, commercially-available analyzers", and that "tests performed on Theranos technology were likely to contain inaccurate and unreliable results." The case will also allege that the defendants knew their claims about their device, known as the "Edison" or the "minilab", were false. 

Holmes "fires back" at doubters in 2015.

According to the court filings, jurors can expect to hear from patients who had misleading results from Theranos, including a woman who falsely believed she had miscarried and a man who was falsely led to believe that he had prostate cancer. Holmes's lawyers have petitioned to limit patient testimonies, suggesting anecdotes are not statistically representative of the millions of tests carried out.

According to a court filing by Holmes's lawyers on Saturday, reported by NPR, part of Holmes's not guilty plea defense will be that alleged abuse by Balwani erased "her capacity to make decisions". The allegations, which Balwani denies, include that he was sexually abusive to her, monitored her communications, was controlling of her life and who she contacted, and that he was violent towards her.

Balwani's lawyers called the allegations "deeply offensive to Mr. Balwani, devastating personally to him".

Due to the prominence of the case and the media coverage over the last few years, it could take a while to find an acceptable jury that hasn't been exposed to potentially biased reportage before it can begin. 

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