The history of the scam
Chronicle of court sessions with Theranos head Elizabeth Holmes: the positions of the parties and the evidence presented
Ekaterina Khananova, Habr
In 2021, the world once again remembered the scandalous Theranos startup — a series of court hearings on the case of its head Elizabeth Holmes began in the United States. In total, she was charged with 11 charges, including fraud and conspiracy to commit fraud using electronic means. Holmes was found guilty on four charges, and now she faces 20 years in prison on each charge and a fine of $ 250 thousand. The verdict in the case will be handed down on September 12, 2022, but for now let's remember what Theranos is, what Holmes was guilty of and what became known during the court sessions.
Briefly — how it all started
Elizabeth Holmes was born in 1984 in Washington in the family of a federal official and a congressional employee. In 2002, at the age of 18, she entered Stanford University, where she studied for only a year. In 2003, Holmes dropped out of school and invested all the money set aside for the university in the creation of a startup Theranos, which until 2005 was called Real-Time Cures. Yesterday's freshman said that she would develop a technology that would allow dozens of tests to be carried out with just one drop of blood, which would require several standard samples. Initially, she described the development as a micro-jet patch that delivers antibiotics and analyzes blood for infections. The US Patent and Trademark Office (USPTO), after several refusals, still approves the patent application, and work begins.
Holmes' first startup partner was Stanford Professor Channing Robertson. Gradually, such personalities as former US Secretaries of State Henry Kissinger and George Schultz, as well as former US Secretary of Defense James Mattis appeared on the company's board of directors. The board of directors is quickly filled with military veterans and former political figures. In 2009, Holmes' lover Ramesh Balwani took the place of the company's president and chief operating officer. The first third-party investor is billionaire Tim Draper, mainly known for enriching himself through early bets on cryptocurrencies. After him, the head of News Corporation Rupert Murdoch, the richest man in Mexico (from 2010 to 2013, the richest in the world), appeared among the investors Carlos Slim Elu and other influential people.
Thanks to the investments, Theranos gradually gained strength, but did not shine much for quite a long time. In 2012, the American supermarket chain Safeway invested $300 million in the installation of an unfinished startup device in 800 locations. In 2013, it was installed in 40 pharmacies of the largest US pharmacy chain Walgreens, for which the chain spent about $ 50 million. At the same time, Theranos began to publicly declare itself. Holmes explained such a long period between the creation and active PR by the need to refine the device and work out all the nuances. In 2014, the startup was already valued at $9 billion. Half of these funds belonged to Elizabeth Holmes, thanks to which she began to be called the youngest billionaire who earned her own capital, as well as "Steve Jobs in a skirt."
Since 2015, a series of devastating scientific articles and journalistic investigations about Theranos and Elizabeth Holmes have followed. It turns out that the developed device not only does not meet the stated characteristics, but in general does not work or works with very low accuracy even with standard blood sampling.
In its investigation, the Wall Street Journal indicates that the senior biochemist of the project, Ian Gibbons, attempted suicide in 2013. He died in hospital a week after the incident. According to Gibbons' wife, the biochemist warned Holmes and constantly stated about the non-working condition of the equipment, as well as that for eight years of work they had not managed to achieve the desired goal. He was under constant stress, because due to the company's opposition, lawyers carefully monitored his activities to prevent leaks. In addition, he was afraid to openly declare the shortcomings of the system. The terms of the employees' contracts did not allow the public to provide any information about the company's projects. Otherwise, violators were expected to face serious sanctions that could lead them to bankruptcy. Gibbons was being treated for cancer, so losing his job in such a scandalous situation was tantamount to death. When he was called to the carpet to Holmes, he decided that they wanted to fire him, and decided to commit suicide.
Holmes spent most of the funds raised not on the laboratory, but on herself, lawyers who protected the company from the disclosure of real data by employees, and on companies that whitewash their reputation. For example, a startup hired a firm that removed any mention of investigative journalism and negative research in the American Wikipedia. But this did not help the company avoid a scandal. The startup's developments began to be actively checked and soon everything collapsed. In 2016, a case was opened on deception of investors, and in March 2018, the U.S. Securities and Exchange Commission accused Holmes and Balwani of fraud on a particularly large scale (obtaining $ 700 million from investors fraudulently).
By agreement with the court, Holmes remains without shares. She is fined half a million dollars and banned from holding senior positions for ten years. In the summer of 2018, Holmes and Balwani receive several more charges, for which they face a fine of $ 250,000 and 20 years in prison. Due to the pandemic, the trial with Holmes was postponed from 2020 to 2021, with Balwani - to 2022. And in 2021, a series of court hearings in the Holmes case began again.
Excessive love of luxury?
During numerous speeches and interviews, Holmes tried to fit the image of an ascetic and imitate Steve Jobs in everything. According to several foreign media reports, it got to the point that she tried to imitate the intonation and manner of Jobs' speech. At the same time, the expenses and the real lifestyle of the Theranos head did not correspond to her image in the media. In January 2021, prosecutors said that Holmes led a very extravagant lifestyle — she traveled on private planes, lived in expensive hotels, and always had several assistants and security guards with her. In addition, the girl had personal assistants who were engaged in home management, purchasing clothes, food and solving other issues not related to the startup. all this was paid from the company's accounts.
The prosecutors' statement followed an attempt by lawyers to present Holmes as an ascetic and mislead the jury about her lifestyle. The defense intended to prove that Theranos is no different from any other startup in Silicon Valley. In turn, the investigation intended to use information about Holmes' expenses to confirm the accusation that the startup was created solely for money and fame and was not conceived from the very beginning as something innovative.
In February, the lawyers strongly opposed this position of the investigation. They stated that the description of Holmes' spending is necessary to play on people's class and gender prejudices. This has nothing to do with the actual charges. Holmes' standard of living and income, according to their assurances, fully correspond to the position of director and say nothing about her motives.
Where's the evidence, Lebowski?!
In August 2018, the jury panel requests Theranos for information from the so-called Laboratory Information System (LIS). As the prosecution points out, it contained factual data on the accuracy of the company's developments and the results of their tests. For example, referring to these documents, prosecutors state that the failure rate in one of these tests was 51.3%. With such work, the accuracy of the analysis is equivalent to a coin toss.
Three months after submitting the request, LIS mysteriously disappears. The prosecution points out that it was destroyed by the company in an attempt to hide the actual evidence of inaccuracy of the device. This is an extremely important piece of evidence, directly proving that the management was aware of the problems, but hid them from investors for the sake of profit. The investigation confirmed that it had received backup copies of LIS databases from the company. But the Theranos management did not provide access to them, explaining that no one remembers the password.
In February 2021, the investigation recalls this issue. Prosecutors promise to invite 11 doctors and 11 patients to the meeting to confirm the data from the disappeared database. In addition, they assure that the destruction of LIS indirectly confirms Holmes' guilt, since it indicates an obvious attempt to conceal evidence. The investigation turned out to have correspondence between Holmes and a lawyer proving the fact of an attempted cover-up.
In turn, Holmes assured that in all laboratory tests there is a certain proportion of errors. According to her, just as the fact of a heart attack does not prove what caused the heart attack, the fact of an incorrect blood test does not prove what caused the error. At the same time, Holmes' lawyers accuse the investigation of data loss and an attempt to shift the blame for this to the defendant. The prosecutors allegedly had all the necessary information, but they were inactive for a long time or, as the lawyers suggest, did not want to study the actual evidence of the test results at all.
Sudden pregnancy and an attempt to prove insanity
In March, the defense suddenly requests a six-week postponement for Holmes due to pregnancy. At that time, she was already five months pregnant, which neither the court nor the investigation knew about. After several postponements due to the uncertain situation with the coronavirus pandemic, the start date of the meetings was postponed to July 13. The lawyers asked to postpone this deadline to August 31, 2021, since the birth should take place approximately in July. The Court agreed with this position.
The prosecution was very concerned about the news about the pregnancy and the upcoming birth. It allowed that the defense would use this fact to manipulate the jury. If Holmes is found guilty and sentenced to prison, the newborn baby will lose its mother. As noted by the American media, such manipulation often plays to the benefit of the defendants and allows them to significantly mitigate the sentence.
At the same time, the lawyers announced their intention to raise the issue of Holmes' mental health in court. They intended to present evidence relating to a mental illness or defect or any other mental condition of the accused relevant to the prosecution. To do this, Dr. Mindy Mechanic, a clinical psychologist specializing in the psychosocial consequences of violence and trauma, with an emphasis on violence against women and other forms of interpersonal violence, was involved. In turn, the court allowed prosecutors to conduct their own assessment of Holmes' mental health.
May
In May, three-day hearings are held, to which Holmes comes in person after an almost 15-month break. They discuss a number of critical petitions, including accusations of excessive spending. The defense continues to insist that the startup is no different from any other Silicon Valley startups, and Holmes' lifestyle fully corresponded to her status and income and cannot prove her guilt. Lawyers accuse the investigation of building a large-scale case on biased and unconfirmed evidence. According to their assurances, the evidence presented by the prosecution of the insolvency of the technology developed by the startup has no scientific basis. The fact that there are several errors does not mean that they occurred due to the operation of the system.
The judge rejected the defense's arguments regarding Holmes' lifestyle. The defense tried to insist that additional expenses on a private plane and expensive hotels were necessary for business trips. But the judge did not see the need for this. He compared Holmes with the heads of other companies, saying that he did not see a fundamental difference and a great need for living in expensive hotels and rooms. At the same time, the judge limited the investigation in presenting this accusation. In particular, prosecutors cannot provide jurors with references to specific purchases of Holmes, including branded clothing, hotel rooms, rental of an expensive rented house and any other aspects not related to work processes.
By the end of May, the defense filed a motion to adjust the jury selection principle, arguing that since 2015, the media has regularly published materials discrediting Holmes' reputation. These materials cannot but influence the jury's decision and make them more biased. The lawyers proposed a 46-page questionnaire for the selection of people, in which there are questions about their awareness of medical issues, having experience working in a laboratory on blood tests, experience working with venture capital and not only.
August
The court allows the prosecution to use the reviews of doctors and patients as evidence of the insolvency of Theranos technologies. The defense demanded that they not be allowed to attend court sessions, since there is no actual confirmation of them. The lawyers continue to insist that the defense presented LIS to the investigation, and the blame for the loss of the internal research database lies entirely with the investigators. In turn, the investigators assure that Holmes kept this data to herself until the last and presented it to the investigation in a revised form, destroying the evidence of guilt.
At the same time, the judge ruled that there was no evidence that the LIS actually contained the results of internal research. From the LIS alone, it is incorrect to draw conclusions about the accuracy for all other tests, bearing in mind that the database alone is not enough to confirm guilt.
Soon, Holmes' lawyers requested permission to talk to the jury about bias. The defense expressed concern that the defendant's online reputation would significantly affect their decision. In addition, as the lawyers put it, there will be a lot of well-known personalities among the witnesses, and it is very important for the defense that the case be considered by impartial people. The court granted the lawyers' request, and towards the end of August, after conversations with Holmes' lawyers and filling out 46-page questionnaires, dozens of jurors were dismissed from the case. All of them, according to the defense, were influenced by negative news about Theranos or did not have sufficient qualifications. In addition, a person whose acquaintances lost money on a startup, two candidates for a job in the company and a juror who had already participated in one of the proceedings with Holmes and Balwani in 2017 were excluded from the list.
A few days before the meetings began, Holmes made another sudden statement. She began to assure the public that her former lover Balwani had been bullying her for ten years. She pointed out that Balwani controlled her communication (calls, correspondence, etc.), threw sharp and heavy objects at her, restricted her in her sleep, controlled what she eats, drinks, how she dresses, how much money she spends, and constantly said that everything she achieved was only his merit. At the same time, investors said that Holmes and Balwani hid their relationship from them. This fact was revealed only during the proceedings.
Balwani denies all charges. In addition, the couple's former colleagues note that they never noticed tension between them. Holmes always behaved easily and at ease, and nothing indicated that there were any problems between them. The accusation itself was necessary for Holmes to justify the presence of PTSD. The defense was still hoping to invoke mental health to try to convince the jury that Balwani was in charge. In this case, Holmes becomes a victim of years of violence, which cannot fully make decisions and be punished for the violations in question.
Holmes' lawyers asked the court not to hold meetings at the same time as Balwani, since the defendant would allegedly experience serious stress from his presence in the courtroom. The court agreed to this, and the lawyers received a significant advantage. In particular, the jury will imagine Balwani exclusively according to the description of Holmes, and he, in turn, will be able to justify himself only after some time. This is a very important period that can affect the outcome of the case. However, such tactics are applicable in both directions.
On August 31, jury selection for the trial began. The media tried to get the publication of a questionnaire compiled by Holmes' lawyers for potential jurors, but they were refused. Experts on both sides were looking for impartial people. When it turned out that some of the candidates had read books, watched documentaries, or heard TED talks and podcasts about Holmes and her startup, the judge recommended that they refuse to watch the news in order not to be influenced by the media.
September
Jury selection lasted two days. As a result, a group of 12 people was formed — seven men and five women. On September 8, the first hearing was held, at which prosecutors called Holmes a liar and a fraud, and lawyers insisted that the failure of the startup was not a crime. According to the prosecution, due to lack of time and money, Holmes deliberately lied to investors in order to keep the company afloat. She completely managed all the affairs in the startup and flooded the partners with false accusations.
Holmes' lawyers pointed out that the girl made mistakes, but they are not a crime. They added that a failed business does not make a CEO a criminal. Holmes did not go to work every day, intending to lie, cheat and steal. In addition, as the defense noted, investors knew from the very beginning that any startup is a very risky investment that does not always pay off.
Questions of Holmes' predilection for luxury goods caused great controversy in court. In addition to the six-figure salary of the ex-head of the startup, Theranos paid Holmes for flights on a private plane, cars (including the newest Range Rover), expensive jewelry (a jeweler worth $ 2 thousand is mentioned), hotel rooms and other personal expenses for which the startup had no budget. According to former employees, it got to the point that they had to choose between payments to suppliers and salaries to employees, while Holmes never embarrassed herself in spending.
On September 9, the case stalled — one of the jurors told the court that he may have contracted coronavirus. He had no symptoms of the disease, but he suspected that he had been infected over the weekend, and to be sure, he passed the test. I had to wait for the test results.
On September 14, San Ho Spivey (Danis Yam), a former leading Theranos specialist in controlling the company's finances, spoke in court. According to her, already in 2010, the startup's net losses amounted to $16.2 million. In 2011, they grew to $27.2 million, in 2012 — $57 million, in 2013 — $92 million. In 2012 and 2013, the startup did not receive any income at all. In 2013, spending was about $2 million a week. In 2015, losses have already reached $585 million. At the same time, investors were presented with a document in which revenue of $140 million is projected for 2014 and $990 million for 2015. Danis assured that she did not participate in the preparation of this document, as well as other documents for investors.
Defense lawyers presented a document in which Theranos was estimated at $1.69—9.5 billion, depending on the calculation methodology. These data were given for comparison with the size of the losses presented. In addition, they asked about other companies that suffered losses as a result of the 2009 crisis. In response to the defense's request, Danis said that Holmes had never sold the company's shares owned by her and had not carried out operations to sell shares in general.
However, shortly after this story of the lawyers, former scientists from the startup's laboratory claimed in court about psychological pressure from Holmes and the company's lawyers. Some of them were forced to participate in the distortion of facts in the reports. Others quit because they disagreed with the company's policy. For example, a former senior researcher at Theranos, Surekha Gangahedkar, after returning from vacation in 2013, discovered that they decided to launch a non-working device at Walgreens. This was the last straw, after which the woman left the startup. Despite the non-disclosure agreement, Gangahedkar printed out and took a package of documents to her home, fearing for the possible future of the project.
As promised by the prosecutors, patients who were incorrectly diagnosed by the startup's devices were invited to the hearings as witnesses. In particular, the device showed a miscarriage to one of the patients, although she had a healthy pregnancy. The defense side tried to shift responsibility for false results and the operation of devices from Holmes to a team of scientists working in the laboratory. But former employees, including those not from the laboratory, answered almost unanimously that Holmes was aware of the problems with the developments, but completely ignored them. In particular, this was confirmed by the former director of the Theranos laboratory Adam Rosendorf, who personally reported on the problems. After several similar reports, he resigned, seeing that Holmes was indifferent to the results presented.
During the trial, the prosecution presented 600 pages of correspondence between Holmes and Balwani, where Holmes admires the successes, calls himself the person of the year and reports on how many investors were persuaded to invest in the startup. The data set covers the period from 2011 to 2016. The same correspondence talks about the luxury that former partners and lovers allowed themselves against the background of multimillion-dollar losses of the company. In 2015, there was a series of scandals and dismissals within the startup. At the same time, Holmes and Balwani discussed luxury hotel rooms worth $15,000 per day, dinners at Michelin restaurants and other expenses from the company's accounts.
During the trial, the startup was disowned by former US Secretary General of Defense and former Theranos board member James Mattis. He assured that Holmes had not been completely frank with the board of directors about the company's affairs. He served on the council from 2013 to 2016, at the end completely disappointed in the project. Holmes' initiative and her desire to receive payment in options gave him confidence in the startup, which seemed to him a guarantee of the seriousness of the girl's intentions.
October
Former Safeway CEO Steve Bird said in court that Theranos constantly violated delivery deadlines and the contract as a whole without explanation. At first, he was interested in the offer of equipment in the network of stores of a cheap innovative device, but it was a mistake. He was very attracted to Holmes' charisma, thanks to which he trusted promises. At the same time, Byrd indicated in court that he knew he was taking a risk. Before signing the contract, the company spent about a hundred hours on risk assessment. In this situation, Byrd considers himself personally guilty of what happened.
As of October 6, two jurors have already been eliminated from the hearings. A 19-year-old girl was the first to leave due to financial difficulties. Another juror stated that she could no longer participate in the hearings for religious reasons. Buddhism does not allow her to condemn another person to imprisonment. The court corrected the woman that the duty as a juror is only to make a decision on the facts of the case, and not to determine the punishment. But she left anyway, declaring sympathy for the defendant. The replacement jurors were also concerned about the fate of Holmes in the event of a conviction. A little later, a girl who played Sudoku while the participants of the meeting testified was excluded from the jury.
During the trial, it turned out that Balwani's personal dermatologist, Sunil Dhawan, was taken in place of the retired Rosendorf. He worked for the company for only a couple of years, and during all this time he appeared in the laboratory twice, acting as a director on call. Dhawan never met with any staff, doctors or patients, appearing in the laboratory only before inspections.
Former Theranos project manager Daniel Edlin told the court that Holmes told him to hide some parts of the lab from potential investors and other important visitors. They were separated from the guests by special partitions. At the same time, Edlin confirmed that Holmes was constantly in the laboratory, including on weekends. She worked hard and actively participated in the life of the company. Edlin said that her word has always been decisive in matters concerning the company's activities.
During the testimony, Edlin told another important thing — at the demonstrations, the devices worked in demo mode and did not actually perform any blood analysis. The whole process took place in a real laboratory away from prying eyes. These tricks were used at the shows for a month. Holmes not only knew about them, but also independently ordered their conduct. At the same time, investors were presented with hyperbolized characteristics of Theranos. When asked whether Edlin participated in the formation of false documentation for partners, the former project manager replied that he did not remember.
Edlin confirmed that Theranos has never been used to test soldiers in the field, as Holmes has repeatedly stated. The device can work exclusively at temperatures up to 22-27 ° C, therefore it is not suitable for use in hot regions. He was offered to the military in Kentucky, but potential partners were not interested in the offer.
After the fake reports were reported by American politician Betsy Devos, who invested in a startup. According to her, Theranos provided misleading financial data and detailed information about the company's technologies when attracting investments.
November
In November, former real estate lawyer Daniel Mosley also claimed to have received documentation with false data, making the project more attractive to investors. The startup was recommended to him by former Secretary of State Henry Kissinger, who is on the company's board of directors. On one of the slides in the presentation it was written that Theranos has been comprehensively tested over the past seven years by 10 of the 15 largest pharmaceutical companies, while hundreds of thousands of analyzes have been processed. Mosley said that he understood the risks of investing in startups, but the presentation and the documents presented looked very convincing. Brian Grossman, investment director at PFM Health Sciences, told about a similar situation during the trial.
Shortly after Mosley, the former director of the Kingshuk Das laboratory appeared in court, who, like Rosendorf, stated that Holmes completely ignored repeated complaints about serious errors in blood testing technology. She repeatedly tried to explain to Holmes the problems with diagnostic inaccuracies, including using the example of patient situations. Das assured that the devices did not work from the very beginning, and canceled all the submitted results of internal testing. The patient Erin Tompkins, who was mistakenly diagnosed with HIV, spoke in support of these Das examples. Due to the diagnosis, Erin panicked and contacted the startup support service, but no one helped her there. Three months after the incident, the woman did a full-fledged test at the clinic, which showed that she did not have HIV.
Soon, an inspection was carried out in the laboratory, according to the results of which the regulatory authorities decided that there was a potential danger to the health of patients and a discrepancy between the statements and the actual state of the laboratory. Holmes' lawyers tried to prevent this report from reaching the jury, but the objection was rejected by the court. In addition, they tried to withdraw a witness from participating in court sessions, citing violations during interrogation. Allegedly, Alan Eisenman, a former Theranos investor from Texas, sent an email to other participants of the meeting after his survey, which is prohibited. Eisenman denies these charges and assures that he did not do anything of the kind.
On November 19, Holmes herself performed. She told how she created a startup, where she got the money from, and how she met the first investors. According to Holmes, the company was initially created at the expense of funds set aside by parents for studies, but soon managed to attract such key figures as Oracle founder Larry Ellison. On the second day of testimony, she talked about encouraging cooperation with pharmaceutical companies, the Department of Defense and Stanford University. Holmes was also asked about cooperation with companies such as AstraZeneca, Merck and Pfizer. It turned out that the startup had plans to sell devices to these companies.
The defense tried to expose Holmes as a young aspiring entrepreneur with a grandiose idea that she wanted to make a reality. Perhaps that is why the defense missed the question regarding the forgery of the Pfizer logo in the startup documentation. A Pfizer representative indicated that the company had never approved the use of its logo.
Holmes acknowledged that Theranos has never had a partnership with the US Department of Defense. In 2008-2009, they planned to participate in military projects, but they failed. At the same time, the reporting documents indicated active cooperation with the military. Soon Holmes also admitted forgery of documents, namely in terms of the illegal use of logos of pharmaceutical companies. In addition, she pointed out that Theranos used third-party equipment for blood testing, passing it off as its own development.
On November 29, Holmes accuses Balwani of physical and psychological abuse, including rape. Before that, the topic of violence had never been mentioned during the speeches of the parties. The defense assured that the defendant had been subjected to violence for ten years. Holmes met Balwani in China, when she was 18 and he was 38. She was immediately impressed by his success in business and asked for advice on founding a company. A year later, Balwani sends her a letter, and the girl drops out of school to work on Theranos. When asked if there were other reasons for creating a startup, Holmes replied — rape. Working on the project became an outlet for her. Balwani at first seemed to her a reliable protection and support, but soon he began to manipulate her, mock and beat her. In fact, during these ten years, according to Holmes, it was Balwani who ran the company.
Another important statement by Holmes was the admission that she tried to force Rupert Murdoch to delete the investigation of The Wall Street Journal even before its release in 2015. She personally appealed to the owner of the publication with an attempt to refute the material and prevent its publication.
December
On the sixth day of interrogations, Holmes admitted that she had given Fortune journalists incorrect information about the startup and the device developed. She added the resulting article to the package of documents for investors. Also, the ex-head of Theranos pointed out that she put false information about working with pharmaceutical companies and forecasts with unreasonably inflated amounts of income in the documentation, including from working with non-existent partners.
In her last attempt to justify herself, Holmes insisted on Balwani's accusations of violence and the real management of the company's affairs. She admitted that her voice was decisive on many issues, but all these decisions were made under the influence of a former lover and partner. At the same time, the prosecution assured the jury of the unambiguity of the situation. The prosecutor spent three hours summarizing all the evidence presented. He insisted that Holmes deliberately deceived investors, patients and partners in order to benefit. The ex-head of Theranos was well aware of the situation and made informed decisions in her favor.
On December 17, the jury was left to consider the testimony of all 32 witnesses presented over the past three months. This trial dragged on for several days, but the jury never came to a consensus on Holmes' account. On December 23, they left the courthouse and announced that they would return for further consideration of the case no earlier than December 27. The court refused their request to take the case materials home, saying that all discussions should take place only in the jury room.
January
On January 3, the jury declares that they cannot reach a unanimous verdict on three of the eleven charges brought against the founder of Theranos. The federal judge noted that they can make a decision on the charges they are sure of. As a result, Holmes will be found guilty on four counts — one count of conspiracy to commit fraud using electronic means and three counts of fraud using electronic means against specific investors. At the same time, the board acquitted Holmes on charges of conspiracy and fraud involving Theranos patients and on three other counts related to patient fraud.
Holmes now faces up to 20 years in prison on each of the charges, but lawyers on both sides doubt that she will receive the maximum sentence. On January 11, the court announced that she was released on bail in the amount of $ 500 thousand. Sentencing on the confirmed charges is scheduled for September 12, 2022. Until then, Holmes will remain at large. In addition, the court will acquit her on three counts in which the jury reached an impasse. They relate to accusations of cheating investors — Alan Eisenman, Chris Lucas of Black Diamond Ventures and Brian Tolbert of Hall Group.
In August, Holmes gives birth to a baby. Journalists, in turn, send a request to the court with a request to provide data on the examination of her mental health. According to the lawyers, about 40% of the documents used in court are not subject to publication. Prosecutors support the initiative of journalists, pointing out that if lawyers appeal to the state of Holmes' mental health, they should be ready for it.
During the trial, Erika Chung, a former employee of the startup's laboratory, said that the devices developed by Theranos often gave false information. She compared the accuracy of the device with a coin toss. In turn, the defense pointed out that Holmes ran the company, but always relied on her employees in matters of research. In particular, the lawyers told about 52 former employees of the company with doctorates and ten doctors of medicine. In this regard, according to the assurances of the defense, it is impossible to lay all responsibility for the failure of the development on Holmes.
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