Fraud trial begins for Theranos founder Holmes

The prosecution launched into its opening statement in the trial of Theranos founder Elizabeth Holmes on Wednesday on federal fraud charges against the former Silicon Valley star accused of lying about her now-defunct blood-testing startup once valued at US$9 billion.

“This is a case about fraud – about lying and cheating to get money,” Robert Leach, a member of the prosecution team, told jurors at the outset of his opening statement.

In one of the most closely watched trials of a US corporate executive in years, Holmes is accused of making false claims about the company, including that its devices designed to draw a drop of blood from a finger prick could run a range of tests more quickly and accurately than conventional laboratory means.

Holmes sat in the courtroom in San Jose, California, at a table flanked by her attorneys, Kevin Downey and Lance Wade. She earlier arrived at the courtroom, wearing a white blouse and grayish-blue skirt suit, with a facemask amid the Covid-19 pandemic. The hallway, filled with observers chatting and waiting to get in, hushed as she passed.

The trial is being presided over by US District Judge Edward Davila, with a 12-member jury along with five alternate jurors. The defence is due to deliver its opening statement after the prosecution.

Holmes, 37, has pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy. Former Theranos executive Ramesh “Sunny” Balwani, scheduled to be tried separately, has also pleaded not guilty.

Prosecutors have said Holmes and Balwani defrauded investors between 2010 and 2015 and deceived patients when the company began making its tests commercially available, including via a partnership with the Walgreens drugstore chain.

Court filings unsealed last month showed that Holmes, who had been in a romantic relationship with Balwani, has alleged that he abused her emotionally and psychologically. Balwani has denied the allegations.

Before the opening statements, the judge instructed the jurors about the charges, telling them that Holmes is presumed innocent and asking them not to be swayed by “sympathy, prejudice” or “unconscious biases”. (Reuters)