Tag Archives: Elizabeth Holmes

Harry and Meghan likened to ‘narcissists’ Kanye West, Trump

What do Prince Harry and Meghan Markle have in common with the likes of Donald Trump, Kanye West, Elon Musk, Elizabeth Holmes and Sam Bankman-Fried?

According to Politico Magazine editor Joanna Weiss, they are all attention-seeking narcissists who have overstayed their welcome — and some have gotten their just deserts.

In her latest opinion piece, titled “2022 Is the Year We All Finally Got Tired of Narcissists,” Weiss makes the argument that by doggedly pursuing the limelight, the Duke and Duchess of Sussex have gone from sympathetic figures to sources of annoyance — not unlike some of the other larger-than-life public figures who have fallen from grace.

Politico editor Joanna Weiss argues that the docuseries “Harry and Meghan” exposes the former royal couple as fame-hungry narcissists.
Netflix
Meghan appears in the documentary, which was made as part of her and Harry’s $100 million development deal with Netflix.
Netflix

“My natural sympathy for the couple started turning to irritation, and it occurred to me that ego has its limits,” Weiss writes, referring to her experience of watching the former royal couple’s Netflix documentary, “Harry and Meghan.”

“And it struck me that the overreach that led to the Sussexes’ critically panned mega-series is the same impulse that turned Elon Musk into a terror on Twitter, that prompted Ye to up the ante of outrageous behavior until he crossed the line into blatant antisemitism, that sent Bankman-Fried from the top of the world to a Bahamian jail,” she adds.

Weiss conceded that while the Sussexes air some “legitimate complaints” in their six-part docuseries, which premiered earlier this month, she laments that those are “wedged between glamour shots from footage of Meghan getting fitted for ballgowns to a vast collection of flattering photos and videos they took during their royal exit, apparently preparing for a photogenic tell-all.”

Another notorious narcissist, according to Weiss, is Kanye West, who suffered a fall from grace after making a litany of anti-Semitic remarks.
GC Images

Weiss argues that the pair made some smart choices upon their exit from the British royal family, including signing a reported $100 million development deal with Netflix and landing a reported $20 million advance for Harry’s tell-all memoir, “Spare,” but according to the Politico editor, their documentary did them a disservice by exposing their “vanity” to the world.

Weiss, however, admits that while Harry and Meghan may be “tiresome,” they are “benign” compared to some of the world’s most notorious narcissists, including West, now known as Ye, who saw his fame curdle to infamy and his lucrative Adidas deal dissolve into thin air after spewing a litany of anti-Semitic remarks.

Wunderkind FTX founder Sam Bankman-Fried has been charged with fraud and money laundering.
AP
Theranos founder Elizabeth Holmes was sentenced to 11 years in prison for fraud on November 18, 2022.
Photo by Justin Sullivan/Getty Images

Weiss also makes the case that 2022 has been a banner year for narcissists’ comeuppance, with disgraced Theranos founder Holmes and cryptocurrency wunderkind Bankman-Fried both rocked by cataclysmic reversals of fortune.

“The more adulation they got, the more dramatic the fall,” Weiss writes.

Holmes, who had set out to disrupt medicine with her innovative blood-testing company — but did not have the technology to actually make it happen — was convicted of fraud and sentenced in November to 11 years in prison.

Bankman-Fried, the founder of the FTX cryptocurrency exchange, was going to revolutionize finance. Instead, he was arrested in the Bahamas last week after being indicted on fraud, money laundering and conspiracy charges for allegedly running a Ponzi scheme that swindled investors.

And then there is Musk, who was displaced as the world’s wealthiest man after his chaotic takeover of Twitter, which sparked an exodus of users from the social media platform and caused shares of one of his other companies, Tesla, to tumble 30% this month.

The bombastic billionaire seemed to have reached his nadir last week when he asked Twitter users to weigh in on whether he should step down as CEO, and more than 57% voted “yes.” Musk said he would comply with the results of the poll as soon as he finds someone “stupid enough” to replace him.

According to Weiss, this year also has been particularly bad for another prominent “narcissist,” Trump, who found himself mired in investigations, saw his Florida estate, Mar-a-Lago, raided by FBI agents and suffered through disastrous midterm elections, where the vast majority of his hand-picked candidates lost.

To top it all off, the House January 6 select committee earlier this month made criminal referrals for the 45th president stemming from his role in the thwarted insurrection.

Billionaire Elon Musk saw his fortune shrink following his chaotic takeover of Twitter.
NTB/AFP via Getty Images
Donald Trump had a bad year marked by the Jan. 6 hearings, the Mar-a-Lago raid and disastrous midterm elections.
CQ-Roll Call, Inc via Getty Imag

“If Trump is no longer invincible, his allies of convenience finally have reason to ignore him,” the article states. “And for Trump, there’s nothing worse than being ignored.”

But according to Weiss, Trump’s case could serve as a teachable moment. When he unveiled a line of NFTs featuring artist renderings of the former host of “The Apprentice” dressed as a superhero, an astronaut and a cowboy, he was brutally mocked by his critics and supporter alike — but 45,000 of the arguably cringey NFTs still sold out in less than 24 hours.

Weiss believes there is an important lesson to be drawn from that: “It’s hard to count any narcissist out; it’s not in their nature to give up the stage, even in exile, sometimes from jail. When they want attention, they get creative.”

Read original article here

Theranos Ex-Operating Chief Sunny Balwani Sentenced to Nearly 13 Years in Prison

SAN JOSE, Calif.—Theranos Inc.’s former No. 2 executive, Ramesh “Sunny” Balwani, was sentenced to nearly 13 years in prison for his involvement in an elaborate fraud scheme at the blood-testing company, capping a yearslong saga that became synonymous with the worst of Silicon Valley culture.

Mr. Balwani’s sentencing comes more than four years after the collapse of Theranos, which promised to revolutionize healthcare but peddled faulty technology to patients and investors, along the way delivering inaccurate health results and squandering hundreds of millions of dollars. Mr. Balwani helped lead the deception as Theranos’s president and chief operating officer, and along with his longtime romantic partner, he became the focus of one of the highest-profile white-collar cases in recent years.

Theranos founder and former chief executive

Elizabeth Holmes,

Mr. Balwani’s ex-girlfriend, was sentenced last month to 11¼ years for four counts of criminal fraud tied to her now-defunct blood-testing startup. The result is an unusual white-collar criminal punishment for Mr. Balwani: being sentenced to a longer prison term than his former boss, who was at the center of the fraud at her company.

Photos: The Testimony of Elizabeth Holmes

Mr. Balwani declined to make a statement when invited to before his sentencing. He also didn’t testify during his trial. That differed from Ms. Holmes, who testified on her own behalf and issued a tearful apology to the judge about the harm she had caused.

The Balwani sentence marks the final chapter in a corporate scandal that erupted more than seven years ago following a series of Wall Street Journal articles that called into question Theranos’s claims about its blood-testing technology.

The reporting triggered criminal and civil investigations into the company and led to the 2018 indictments of Ms. Holmes and Mr. Balwani on fraud and conspiracy charges. The scandal entered popular American culture, led to a bestselling book, an award-winning Hulu series and a planned movie, in addition to multiple university case studies on corporate fraud.

The once-highflying Theranos now stands as a cautionary signal to Silicon Valley about the criminal risks of misleading investors and consumers about new technology. The sentencing of the top two Theranos executives delivers a remarkable indictment of corporate leaders lying and obfuscating in pursuit of technological and financial success.

“The evidence shows he knew about the fraud,” U.S. District Judge

Edward Davila

said ahead of reading the sentence. He called the crime at Theranos “a true flight from honest business practices.”

Judge Edward Davila declined to find that Sunny Balwani recklessly put patients at risk of death or serious bodily injury.



Photo:

VICKI BEHRINGER/REUTERS

Government prosecutors had requested a 15-year sentence for Mr. Balwani. A report from a probation officer, who provides an objective recommendation for the judge’s consideration, suggested a nine-year sentence. The probation officer found that Mr. Balwani’s crimes fall into the most serious offense category specified by U.S. sentencing guidelines, which carries the possibility of a life prison term. 

“Mr. Balwani came to work day after day and made misrepresentations,” said Assistant U.S. Attorney Jeffrey Schenk. “Investors believed they were investing in a different company.”

SHARE YOUR THOUGHTS

Are the Theranos sentences appropriate? Why or why not? Join the conversation below.

Mr. Balwani, 57 years old, was convicted in July of seven counts of wire fraud and conspiracy against investors in Theranos, and five counts of wire fraud and conspiracy against patients who used Theranos blood tests. His trial showed that Theranos’s blood-testing devices were unreliable and often produced inaccurate results about serious health conditions and that Mr. Balwani and Ms. Holmes lied about the company’s technology, finances and business prospects.

Following his sentencing, Mr. Balwani briefly spoke quietly with members of his family, who had appeared in court to support him.

“We respectfully disagree with the outcome,” said defense attorney Jeffrey Coopersmith. “We are disappointed with the result and we plan to appeal.” Government prosecutors declined to comment.

Sunny Balwani has unresolved civil fraud charges pending against him from the Securities and Exchange Commission.



Photo:

Jason Henry for The Wall Street Journal

Theranos’s victims, Judge Davila said, include venture-capital firms Lucas Venture Group and Peer Venture Partners, and individual investors including

Pat Mendenhall

of U.S. Capital Advisors LLC;

Richard Kovacevich,

the ex-CEO of

Wells Fargo

& Co.; and

Rupert Murdoch.

Mr. Murdoch, who invested $125 million in Theranos, is the executive chairman of

News Corp,

which owns the Journal.

“We all screwed up,” said Mr. Mendenhall, an early Theranos investor who testified against Mr. Balwani. “I will never, ever invest in any company again without audited financials.”

Mr. Murdoch declined to comment Wednesday. After Ms. Holmes’s sentencing, he said he blamed only himself for falling for her fraud. Mr. Kovacevich declined to comment.

Judge Davila declined to find that Mr. Balwani recklessly put patients at risk of death or serious bodily injury, which could have added years to his sentence.

“This is a very close call,” Judge Davila said, acknowledging that Mr. Balwani had “oversight and control over the lab situation.”

Mr. Balwani has been ordered to surrender on March 15, 2023, more than a month earlier than Ms. Holmes was ordered to surrender. Ms. Holmes is pregnant with her second child.

“Let this story be a cautionary tale for entrepreneurs in this district: Those who use lies to cover up the shortfalls of their promised accomplishments risk substantial jail time,” Stephanie Hinds, U.S. attorney for the Northern District of California, said in a statement.

Former Theranos CEO Elizabeth Holmes was sentenced last month.



Photo:

Brian L. Frank for The Wall Street Journal

Mr. Balwani joined Theranos in 2009 as vice chairman of its board and the following year became president and chief operating officer, a position he held until 2016. He ran the company’s lab, despite having no medical credentials.

“This is a complete disregard for other people’s lives,” said Mehrl Ellsworth, a retired Arizona dentist who received four Theranos blood tests in 2015, two of which wrongly suggested he had cancer and two that showed he didn’t. The confusion disrupted his life for about six months, he said, delaying a trip to perform volunteer work in Thailand.

The defense sought to pin the blame on Ms. Holmes, who ran the company for years without Mr. Balwani and often made misleading claims as she sought the media spotlight.

“Mr. Balwani joined this company because he believed in the mission of Theranos,” attorney Mr. Coopersmith said in court Wednesday. “He is not Ms. Holmes. He did not pursue fame and recognition and glory.”

Theranos was propelled by claims from Mr. Balwani and Ms. Holmes that their technology could cheaply and quickly run more than 200 health tests using a proprietary finger-prick device that required just a few drops of blood. Their trials showed that the company managed to use its proprietary device for just 12 types of patient tests.

“They knew the tests were inaccurate and they put patients in danger,” said Alan Eisenman, a Texas-based investor who sank about $1.2 million into Theranos and whose investment underpins one of the guilty counts against Mr. Balwani. “That is worse than the financial fraud.”

Mr. Balwani also was responsible for the financial models given to investors that greatly inflated revenue projections, prosecutors said, and he managed the company’s partnership with

Walgreens Boots Alliance Inc.,

in which Theranos finger-prick tests were offered at the chain’s drugstores.

Theranos raised $945 million from investors, and most of it evaporated.

Mr. Balwani has unresolved civil fraud charges pending against him from the U.S. Securities and Exchange Commission. Ms. Holmes settled her charges, without admitting or denying wrongdoing, which included a $500,000 fine.

Alex Shultz, whose son Tyler Shultz worked at Theranos, gave a victim impact statement during Theranos founder Elizabeth Holmes’s sentencing last month.



Photo:

VICKI BEHRINGER/REUTERS

During his time at Theranos, Mr. Balwani sought to shut down internal criticism about the company’s technical and laboratory failings and often rebuffed staffers who brought concerns to him, his trial showed. He was particularly harsh in dealing with Theranos whistleblower

Tyler Shultz,

who complained in an internal 2014 email that Theranos had doctored research and ignored failed quality-control checks.

Mr. Balwani belittled Mr. Shultz and then took a swipe at his relationship with

George Shultz,

the late former secretary of state and then a Theranos director.

“The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson,” wrote Mr. Balwani to the young Mr. Shultz in an email.

In an interview Wednesday after Mr. Balwani was sentenced, Mr. Shultz said: “I’m not rejoicing at them going to prison, but I think it is well deserved.”

“It is just such a relief that it is over,” he said.

Write to Heather Somerville at heather.somerville@wsj.com and Christopher Weaver at Christopher.Weaver@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Elizabeth Holmes sentenced to more than 11 years in prison for fraud



CNN
 — 

Elizabeth Holmes was sentenced to more than 11 years in prison on Friday following her conviction in January for defrauding investors while running the failed blood testing startup Theranos.

Judge Edward Davila imposed a sentence of 11 years and three months in prison, with another three years of supervision after Holmes is released. The sentence also includes a fine of $400, or $100 for each count of fraud. Restitution will be set at a later date. Holmes was ordered to turn herself into custody on April 27, 2023.

Holmes, who was found guilty in January on four charges of defrauding investors, faced up to 20 years in prison as well as a fine of $250,000 plus restitution for each count.

Lawyers for the government asked for a 15-year prison term, as well as probation and restitution, while Holmes’ probation officer pushed for a nine-year term. Holmes’ defense team asked Davila, who presided over her case, to sentence her to up to 18 months of incarceration followed by probation and community service.

Before the sentencing was announced, a tearful Holmes spoke to the court in San Jose, California. “I loved Theranos. It was my life’s work,” she said. “The people I tried to get involved with Theranos were the people I loved and respected the most. I am devastated by my failings.”

She also apologized to the employees, investors and patients of Theranos. “I’m so, so sorry. I gave everything I had to build our company and to save our company,” she said. “I regret my failings with every cell in my body.”

In arguments before the judge on Friday over her sentence, Kevin Downey, one of Holmes’ lawyers, said that unlike other defendants in corporate fraud cases, the Theranos founder did not express greed by cashing out shares or spending money on “yachts and planes.” Instead, the money was “used to build medical technology.”

Federal prosecutor Jeffrey Schenk pointed out that Holmes did gain fame, admiration, and a lifestyle from the fraud, even if she did not make financial gains. “These still are benefits she’s receiving,” he said.

Friday’s sentencing hearing caps off Holmes’ stunning downfall. Once hailed as a tech industry icon for her company’s promises to test for a range of conditions with just a few drops of blood, she is now the rare tech founder to be convicted and face prison time for her company’s missteps.

Holmes, now 38, started Theranos in 2003 at the age of 19 and soon thereafter dropped out of Stanford University to pursue the company full-time. After a decade under the radar, Holmes began courting the press with claims that Theranos had invented technology that could accurately and reliably test for a range of conditions using just a few drops of blood taken from a finger prick.

Theranos raised $945 million from an impressive list of investors, including media mogul Rupert Murdoch, Oracle founder Larry Ellison, Walmart’s Walton family and the billionaire family of former Secretary of Education Betsy DeVos. At its peak, Theranos was valued at $9 billion, making Holmes a billionaire on paper. She was lauded on magazine covers, frequently wearing a signature black turtleneck that invited comparisons to late Apple CEO Steve Jobs. (She has not worn that look in the courtroom.)

The company began to unravel after a Wall Street Journal investigation in 2015 found the company had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary blood testing device, and with questionable accuracy. Instead, Theranos was relying on third-party manufactured devices from traditional blood testing companies.

In 2016, Theranos voided two years of blood test results. In 2018, Holmes and Theranos settled “massive fraud” charges with the Securities and Exchange Commission, but did not admit to or deny any of the allegations as part of the deal. Theranos dissolved soon after.

In her trial, Holmes alleged she was in the midst of a decade-long abusive relationship with her then-boyfriend and Theranos COO Ramesh “Sunny” Balwani while running the company. Balwani, she alleged, tried to control nearly every aspect of her life, including disciplining her eating, her voice and her image, and isolating her from others. (Balwani’s attorneys denied her claims.)

In July, Balwani was found guilty on all 12 charges in a separate trial and faces the same potential maximum prison time as her. Balwani is scheduled to be sentenced on December 7.

“The effects of Holmes and Balwani’s fraudulent conduct were far-reaching and severe,” federal prosecutors wrote in a November court filing regarding Holmes’ sentencing. “Dozens of investors lost over $700 million and numerous patients received unreliable or wholly inaccurate medical information from Theranos’ flawed tests, placing those patients’ health at serious risk.”

More than 100 people wrote letters in support of Holmes to Davila, asking for leniency in her sentencing. The list includes Holmes’ partner, Billy Evans, many members of Holmes’ and Evans’ families, early Theranos investor Tim Draper, and Sen. Cory Booker. Booker described meeting her at a dinner years before she was charged and bonding over the fact that they were both vegans with nothing to eat but a bag of almonds, which they shared.

“I still believe that she holds onto the hope that she can make contributions to the lives of others, and that she can, despite mistakes, make the world a better place,” Booker wrote, noting that he continues to consider her a friend.

Ahead of the hearing, there were also questions over how Holmes’ sentencing could be complicated by developments in her life after stepping down from Theranos. Holmes and her partner, Evans, who met in 2017, have a young son. Holmes is also pregnant, as confirmed by recent court filings and her most recent court appearance in mid-October.

Mark MacDougall, a white-collar defense lawyer and former federal prosecutor, told CNN Business before the hearing that the fact that Holmes has a young child could impact how she is sentenced.

“I don’t know how it can’t, just because judges are human,” he said.

MacDougall also said he doesn’t see what a long prison sentence accomplishes. “Elizabeth Holmes is never going to run a big company again,” he said. “She’s never going to be in a position to have something like this happen again.”

Read original article here

Theranos Founder Elizabeth Holmes Seeks New Trial, Citing Fresh Evidence

Elizabeth Holmes,

founder of defunct blood-testing startup Theranos Inc. who was convicted of fraud, has asked a federal judge for a new trial after she said one of the prosecution’s star witnesses visited her house to express regret for his role in her trial, according to a new court filing.

Ms. Holmes said in a filing Tuesday that

Adam Rosendorff,

a former Theranos lab director who testified for five days in her criminal-fraud trial, showed up unannounced at her home Aug. 8. During his visit, Dr. Rosendorff spoke to Ms. Holmes’s partner and said that the government had twisted his testimony that Theranos was “working so hard to do something good and meaningful,” and that he felt guilty “to the point where he had difficulty sleeping,” according to the court filing.

Ms. Holmes is arguing that Dr. Rosendorff’s alleged statements to her partner qualifies her for a new trial or a hearing to discuss the evidence.

A federal jury convicted Theranos founder Elizabeth Holmes on four of 11 charges. Each count carries a maximum prison sentence of 20 years. WSJ’s Sara Randazzo shares highlights from Ms. Holmes’s testimony. Photo: Josh Edelson for The Wall Street Journal

Dr. Rosendorff declined to comment when reached by phone Tuesday. A spokesman for the U.S. attorney’s office for the Northern District of California declined to comment.

The filing is the latest twist in a spectacle-laden criminal-fraud saga that began to play out in court a year ago and became one of the most closely watched white-collar cases in Silicon Valley history. Ms. Holmes in January was convicted on four counts of criminal fraud for deceiving investors while running a yearslong scheme at Theranos, where she was chief executive. Her one-time business and romantic partner, former Theranos president Ramesh “Sunny” Balwani, was convicted of 12 fraud counts in July.

Ms. Holmes last week requested an acquittal, and during the hearing, her legal team said they had newly discovered information that would help her case but didn’t provide further details. On Tuesday, U.S. District Judge Edward Davila denied the motion for an acquittal. Ms. Holmes is scheduled to be sentenced in October, while Mr. Balwani is set to be sentenced the following month.

At his Aug. 8 visit, Dr. Rosendorff didn’t speak directly to Ms. Holmes but to her partner, Billy Evans, who answered the door, according to Mr. Evans’s account of the exchange, which was filed into court record. Dr. Rosendorff looked disheveled, and his voice trembled as he explained that “he feels guilty,” according to the account. “He said he is hurting,” according to Mr. Evans. Dr. Rosendorff explained that he “tried to answer the questions honestly” during the trial but that the government made things sound worse than they were when he was up on the stand during his testimony. He said he felt as though he had done something wrong, according to the account.

Ms. Holmes is arguing that if Dr. Rosendorff had made such statements in court, it would have significantly bolstered her defense and could have swayed a jury.

The government called 29 witnesses, including other former Theranos lab personnel who testified against Ms. Holmes.

Dr. Rosendorff, a central government witness in Ms. Holmes’s trial, testified on concerns he brought directly to her about Theranos’s technology and his efforts to delay the use of the company’s blood-testing equipment on real patients. As lab director from 2013 to 2014, he told the court that he was responsible for helping respond to doctor and patient complaints about Theranos’s inaccurate lab tests and that he was pressured to find excuses for the erroneous results that deflected the responsibility from Theranos.

On his LinkedIn page, Dr. Rosendorff included a link to a news article from the South African Jewish Report that called him the “medic who helped expose Theranos.”

Dr. Rosendorff revealed during the trial that he was a source for The Wall Street Journal’s reporting on Theranos in 2015 before the paper published a series of articles revealing that Theranos’s finger-stick lab tests were unreliable and that the company often relied on commercial machines instead, but even those test results could be wrong.

One of Ms. Holmes’s attorneys,

Lance Wade,

questioned Dr. Rosendorff in often hostile exchanges for nearly four days, much longer than the government questioned him. Tuesday’s court filing said that Dr. Rosendorff on Aug. 8 left a voicemail with Mr. Wade, asking for a meeting with Ms. Holmes. Mr. Wade didn’t respond before Dr. Rosendorff drove to her house anyway, the court filing said.

Write to Heather Somerville at heather.somerville@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 7, 2022, print edition as ‘Theranos’s Holmes Seeks New Trial, Cites Witness Take.’

Read original article here

Elizabeth Holmes went to Rupert Murdoch to kill WSJ Theranos story

SAN JOSE, CALIF. — In her first day facing questions from the prosecution, Theranos founder Elizabeth Holmes admitted that she tried to get News Corp’s Rupert Murdoch to kill a story that the Wall Street Journal was preparing to publish about her company in 2015.

“You personally went to the owner of the Wall Street Journal to try to quash the story,” Robert Leach, an assistant U.S. attorney, asked of Holmes.

“I did,” Holmes replied.

The article from the Journal’s John Carreyrou, who’s no longer with the paper, was finally published on Oct. 15, 2015, and opened the investigative floodgates that eventually led to Theranos’ demise in 2018 and the indictment of Holmes on criminal fraud charges.

Elizabeth Holmes, founder of Theranos Inc., arrives at federal court in San Jose, California, U.S., on Tuesday, Nov. 30, 2021.

David Paul Morris | Bloomberg | Getty Images

Holmes faces 11 counts of wire fraud and conspiracy to commit wire fraud for her role at the blood-testing company, and could spend up to 20 years in prison if convicted. She pleaded not guilty

In her four prior appearances in front of the jury, beginning Nov. 19, Holmes took questions from her defense attorneys, who attempted to portray their client as a young and perhaps overly-ambitious entrepreneur out to do good and change the world. On Monday, Holmes wrapped up her answers, detailing to the jury her decade-long abusive relationship with ex-boyfriend Ramesh “Sunny” Balwani, who was also the company’s president.

The cross-examination on Tuesday returned the focus to Holmes and her alleged deceptions and efforts to mislead investors, patients and the public. Murdoch was one of the many wealthy individuals to invest in Theranos, personally putting in $125 million earlier in 2015.

That gave Holmes a direct line into Murdoch. Leach showed the jury an email Holmes sent to the media tycoon in September of that year. In it, Holmes referenced Gerard Baker, who was then the Journal’s editor-in-chief.

“As I’ve reflected on this, I thought that were I in your shoes I would want to know/be in the loop on this one,” Holmes wrote. “We are very much hoping that Gerard will meet with our team.”

She told the jury, “It was part of my effort to get Mr. Murdoch to make sure our trade secrets are not published.”

Rupert Murdoch

Drew Angerer | Bloomberg | Getty Images

Holmes acknowledged that she was “very worried” about the Journal’s story.

Carreyrou, who attended the trial this week, left the Journal in 2019, a year after publishing his book on Theranos, “Bad Blood: Secrets and Lies in a Silicon Valley Startup.” Carreyrou told CNBC on Tuesday, “I stand by every line of what I wrote.”

On the stand, Holmes was asked about her threats on former employees Tyler Shultz and Erika Cheung, who became whistleblowers. Cheung testified as a government witness that she was followed by private investigators and threatened with litigation following her departure from the company.

The whistleblower was right

Holmes acknowledged that she hired Boies Schiller Flexner, the law firm of David Boies, after she learned Cheung was talking to Carreyrou. Holmes said she was trying to prevent Cheung from disclosing company trade secrets.

“I don’t think she was right about the specific issues she was raising but I sure as hell wish we treated her differently and listened to her,” said Holmes, who was evasive at times on Tuesday and appeared more flustered than in her appearances taking questions from defense attorneys.

“You know today that Ms. Cheung was right, isn’t that fair?” Leach asked.

 “Yes,” Holmes said, also telling the jury that the way she handled the Journal’s investigation was “a disaster.”

At the direction of the prosecution, Holmes read aloud text messages she’d written to and received from Balwani. She broke down on the stand when reading the messages.

In a text to Holmes on Oct. 21, 2015, Balwani wrote, “I prayed from the bottom of my heart for you. I have never prayed with this intensity in my life for anything and anyone you will shine.” Holmes read the message while wiping away tears.

Former Theranos President and COO Ramesh “Sunny” Balwani smiles after a hearing at a federal court in San Jose, California, July 17, 2019.

Stephen Lam | Reuters

In another message, Balwani wrote, “U r God’s tigress and warrior. You are extraordinary.” Holmes responded, “Coming from my tiger means the whole universe to me,” and she wrote, “I love you.”

“Fair to say this is an example of Mr. Balwani expressing love and affection to you?” Leach asked.

“It is,” Holmes said.

Leach pointed out that the word “love” appeared 594 times in the government’s 12,000 text messages between Holmes and Balwani.

It was a striking departure in tone from Monday, when Holmes claimed that Balwani physically and sexually abused her throughout their relationship and that he controlled nearly every aspect of her life, including her schedule and diet.

“He impacted everything about who I was,” Holmes told the jury, in response to questions from her defense attorneys. “And I don’t fully understand that.”

Balwani, who faces the same charges as Holmes, denied the allegations and has also pleaded not guilty. His trial is expected to begin in early 2022.

Leach also pressed Holmes about her working relationship with Balwani. 

“Sunny Balwani reported to you?” Leach asked.

“He did,” Holmes said.

“You could fire him at any time?” Leach asked.

“I could,” Holmes responded.

In a surprise admission, Holmes acknowledged that she had another romantic involvement while in a relationship with Balwani.

“How long did that relationship last?” Leach asked.

“It didn’t,” Holmes said. “It was not actually a formal relationship.”

“But you were romantic with somebody other than Mr. Balwani from 2010 to 2015?” Leach asked.

“Yes,” Holmes said.

The court recessed shortly before 4 p.m. California time. Holmes’ cross-examination will continue on Tuesday. The defense said it will rest next week, at which point the government will have an opportunity for a rebuttal before jury deliberations begin.

WATCH: Holmes describes sexual abuse from Sunny Balwani

Read original article here

Elizabeth Holmes went to Rupert Murdoch to kill WSJ Theranos story

SAN JOSE, CALIF. — In her first day facing questions from the prosecution, Theranos founder Elizabeth Holmes admitted that she tried to get News Corp’s Rupert Murdoch to kill a story that the Wall Street Journal was preparing to publish about her company in 2015.

“You personally went to the owner of the Wall Street Journal to try to quash the story,” Robert Leach, an assistant U.S. attorney, asked of Holmes.

“I did,” Holmes replied.

The article from the Journal’s John Carreyrou, who’s no longer with the paper, was finally published on Oct. 15, 2015, and opened the investigative floodgates that eventually led to Theranos’ demise in 2018 and the indictment of Holmes on criminal fraud charges.

Elizabeth Holmes, founder of Theranos Inc., arrives at federal court in San Jose, California, U.S., on Tuesday, Nov. 30, 2021.

David Paul Morris | Bloomberg | Getty Images

Holmes faces 11 counts of wire fraud and conspiracy to commit wire fraud for her role at the blood-testing company, and could spend up to 20 years in prison if convicted. She pleaded not guilty

In her four prior appearances in front of the jury, beginning Nov. 19, Holmes took questions from her defense attorneys, who attempted to portray their client as a young and perhaps overly-ambitious entrepreneur out to do good and change the world. On Monday, Holmes wrapped up her answers, detailing to the jury her decade-long abusive relationship with ex-boyfriend Ramesh “Sunny” Balwani, who was also the company’s president.

The cross-examination on Tuesday returned the focus to Holmes and her alleged deceptions and efforts to mislead investors, patients and the public. Murdoch was one of the many wealthy individuals to invest in Theranos, personally putting in $125 million earlier in 2015.

That gave Holmes a direct line into Murdoch. Leach showed the jury an email Holmes sent to the media tycoon in September of that year. In it, Holmes referenced Gerard Baker, who was then the Journal’s editor-in-chief.

“As I’ve reflected on this, I thought that were I in your shoes I would want to know/be in the loop on this one,” Holmes wrote. “We are very much hoping that Gerard will meet with our team.”

She told the jury, “It was part of my effort to get Mr. Murdoch to make sure our trade secrets are not published.”

Rupert Murdoch

Drew Angerer | Bloomberg | Getty Images

Holmes acknowledged that she was “very worried” about the Journal’s story.

Carreyrou, who attended the trial this week, left the Journal in 2019, a year after publishing his book on Theranos, “Bad Blood: Secrets and Lies in a Silicon Valley Startup.” Carreyrou told CNBC on Tuesday, “I stand by every line of what I wrote.”

On the stand, Holmes was asked about her threats on former employees Tyler Shultz and Erika Cheung, who became whistleblowers. Cheung testified as a government witness that she was followed by private investigators and threatened with litigation following her departure from the company.

The whistleblower was right

Holmes acknowledged that she hired Boies Schiller Flexner, the law firm of David Boies, after she learned Cheung was talking to Carreyrou. Holmes said she was trying to prevent Cheung from disclosing company trade secrets.

“I don’t think she was right about the specific issues she was raising but I sure as hell wish we treated her differently and listened to her,” said Holmes, who was evasive at times on Tuesday and appeared more flustered than in her appearances taking questions from defense attorneys.

“You know today that Ms. Cheung was right, isn’t that fair?” Leach asked.

 “Yes,” Holmes said, also telling the jury that the way she handled the Journal’s investigation was “a disaster.”

At the direction of the prosecution, Holmes read aloud text messages she’d written to and received from Balwani. She broke down on the stand when reading the messages.

In a text to Holmes on Oct. 21, 2015, Balwani wrote, “I prayed from the bottom of my heart for you. I have never prayed with this intensity in my life for anything and anyone you will shine.” Holmes read the message while wiping away tears.

Former Theranos President and COO Ramesh “Sunny” Balwani smiles after a hearing at a federal court in San Jose, California, July 17, 2019.

Stephen Lam | Reuters

In another message, Balwani wrote, “U r God’s tigress and warrior. You are extraordinary.” Holmes responded, “Coming from my tiger means the whole universe to me,” and she wrote, “I love you.”

“Fair to say this is an example of Mr. Balwani expressing love and affection to you?” Leach asked.

“It is,” Holmes said.

Leach pointed out that the word “love” appeared 594 times in the government’s 12,000 text messages between Holmes and Balwani.

It was a striking departure in tone from Monday, when Holmes claimed that Balwani physically and sexually abused her throughout their relationship and that he controlled nearly every aspect of her life, including her schedule and diet.

“He impacted everything about who I was,” Holmes told the jury, in response to questions from her defense attorneys. “And I don’t fully understand that.”

Balwani, who faces the same charges as Holmes, denied the allegations and has also pleaded not guilty. His trial is expected to begin in early 2022.

Leach also pressed Holmes about her working relationship with Balwani. 

“Sunny Balwani reported to you?” Leach asked.

“He did,” Holmes said.

“You could fire him at any time?” Leach asked.

“I could,” Holmes responded.

In a surprise admission, Holmes acknowledged that she had another romantic involvement while in a relationship with Balwani.

“How long did that relationship last?” Leach asked.

“It didn’t,” Holmes said. “It was not actually a formal relationship.”

“But you were romantic with somebody other than Mr. Balwani from 2010 to 2015?” Leach asked.

“Yes,” Holmes said.

The court recessed shortly before 4 p.m. California time. Holmes’ cross-examination will continue on Tuesday. The defense said it will rest next week, at which point the government will have an opportunity for a rebuttal before jury deliberations begin.

WATCH: Holmes describes sexual abuse from Sunny Balwani

Read original article here

Elizabeth Holmes denies deception at her criminal trial

SAN JOSE, Calif. (AP) — Biotechnology entrepreneur Elizabeth Holmes, a former billionaire accused of engineering a massive medical scam, expressed some remorse while on the witness stand Tuesday, but denied trying to conceal that her company’s blood-testing methods weren’t working as she had promised.

In her third day of testimony during the high-profile criminal trial, Holmes acknowledged making some mistakes as CEO of Theranos, a company she founded in 2003 when she was just 19. But she repeatedly emphasized that she made most of her decisions with the help of other executives and a respected board that included former cabinet members in various presidential administrations.

Holmes, now 37, also made it clear that she never stopped believing that Theranos would revolutionize health care with a technology that was supposed to be able to detect a wide range of diseases and other problems by testing just a few drops of blood.

“It is never smooth,” she testified. “There’s always challenges.”

Theranos eventually collapsed after a series of explosive articles i n The Wall Street Journal and an audit by federal regulators exposed serious and potentially dangerous flaws in the company’s blood tests. The scandal wiped out Holmes’ fortune, which was estimated at $4.5 billion in 2014 when she was the subject of a glowing cover story on Fortune magazine.

Holmes denied that she intended to deceive anyone about the workings of its partnership with Walgreens, which aimed to install Theranos testing devices in 3,000 of the drugstore chain’s stores. Walgreens terminated that partnership after issues with inaccurate test results and the discovery that Theranos was testing many of its samples on conventional diagnostic equipment — and not with Theranos’ Edison device, which was supposed to provide quicker and less expensive testing.

Holmes said that when Theranos was about to start running tests in Walgreens stores, she intentionally had them sent to a central laboratory for conventional analysis instead. Holmes claimed that the Edison wasn’t designed to function in large clusters to process huge numbers of blood samples.

Her testimony is at odds with previous witness testimony and prosecutors’ allegations that Theranos switched to conventional testing because of testing failures and other problems with the Edison. Theranos never told its customers that it was using ordinary testing equipment instead of the Edison.

Holmes testified that Theranos stayed silent because it had created an “invention” that could process small blood samples on conventional testing machines. The company didn’t tell Walgreens or anyone else to protect that trade secret from possible theft by a larger and established testing company, she claimed. “They had more engineers than we did,” Holmes said.

One major question remains in Holmes’ testimony — whether she’ll address her claim in legal filings that she was being secretly manipulated by her former lover and Theranos’ former chief operating officer, Sunny Balwani, into unethical behavior.

In court documents unsealed shortly before the trial began in early September, Holmes’ lawyers accused Balwani of subjecting Holmes to “intimate partner abuse.” Balwani, who faces a separate fraud trial next year, has denied those allegations through his attorney.

Balwani also drew up a series of financial projections that have been a focal point of the trial, according to Holmes. In documents distributed to prospective investors, Theranos forecast annual revenues of $140 million in 2014 and $990 million in 2015. Other evidence presented during the trial showed the company never came remotely close to hitting those targets.

Holmes testified the 2015 revenue prediction was based largely on an anticipated expansion into Walgreens stores that never materialized.

The former Theranos CEO did take responsibility for adding the logo of Pfizer, a major drug maker, to a report extolling the effectiveness of Theranos’ technology. That decision came after an internal Pfizer report that Holmes said she never saw had expressed doubts about the reliability of Theranos’ blood tests.

“I wish I had done it differently,” Holmes said. Several investors have testified that seeing Pfizer’s logo on the report helped persuade them to invest in Theranos.

Holmes raised nearly $1 billion after founding Theranos in 2003. She faces allegations of duping investors, patients and business partners while running the Palo Alto, California, company. If convicted, she could face a prison term of up to 20 years.

Holmes has so far spent eight hours on the stand and won’t return until Monday, when the trial resumes after a break for the Thanksgiving holiday.

Read original article here

The Elizabeth Holmes Trial: Theranos Founder Takes the Stand

SAN JOSE, Calif.—Elizabeth Holmes took the witness stand Friday afternoon to defend herself against criminal-fraud charges tied to the failure of Theranos Inc., the startup she founded in 2003 as a 19-year-old college dropout.

Ms. Holmes, who appeared composed and polished, opened her testimony at the beginning of the Theranos story: discussing her laboratory work as a college freshman at Stanford University, the mentorship she received from a Stanford professor and her vision even as a teenager to change healthcare. Her appearance—unmasked for the first time in court—energized a case that is heading toward its 12th week of testimony.

Read original article here

Theranos investor Betsy DeVos’ rep says Elizabeth Holmes misled them

Elizabeth Holmes, founder and former CEO of Theranos, arrives for motion hearing on Monday, Nov. 4, 2019, at the U.S. District Court House inside Robert F. Peckham Federal Building in San Jose, California.

Yichuan Cao | NurPhoto | Getty Images

SAN JOSE, CALIF. — A representative for Betsy DeVos’s family office told jurors in the Elizabeth Holmes criminal trial that the former Theranos CEO provided misleading financials and details about the company’s technology in soliciting an investment.

DeVos, the former education secretary in the Trump administration, invested $100 million in Theranos in 2014. Lisa Peterson, who oversees private equity investments at RDV Corp. and handled the Theranos deal, testified on behalf of the family on Tuesday.

Peterson said that Holmes “was hand picking five or six private families to invest in her firm” and “was inviting us to participate in this opportunity.”

She told jurors that Theranos shared financial projections, showing the company would have revenue of $140 million in 2014 and $990 million in 2015. Peterson said she didn’t know that Theranos had no revenue in 2012 and 2013.

Holmes also said that the blood tests were being processed on Theranos’ homegrown technology, when in reality the company was using third-party systems.

Investors dumped a total of more than $900 million into Theranos, a then-buzzy blood-testing start-up led by a charismatic Stanford dropout who promised to change the future of health care. In addition to DeVos, media tycoon Rupert Murdoch, the Walton family and Atlanta’s Cox family all put in money.

Holmes is on trial on allegations of misleading investors, patients and doctors about the capabilities of Theranos’ blood-testing technology. Holmes and her co-conspirator and company president Ramesh “Sunny” Balwani each face up to 20 years in prison if convicted. They have both pleaded not guilty, and Balwani will be tried separately next year.

Peterson said she was asked to work on the Theranos deal because she had prior experience in health care and “it intrigued” her. The DeVos family planned to invest $50 million in Theranos, but Peterson told jurors that they decided to double their investment after meeting with Holmes.

Peterson said she initially thought “this was going to be a game changer for health care.”

The false statements from Holmes didn’t stop after the investment, Peterson said. For the first time in the trial, jurors were shown video footage of Holmes, as prosecutors played three clips of her 2015 interview with CNBC’s “Mad Money.”

In the interview, Holmes defended her work and Theranos following a Wall Street Journal investigation about the technology’s faults. Holmes, in a clip that went viral, told CNBC’s Jim Cramer, “This is what happens when you work to change things, and first they think you’re crazy, then they fight you, and then all of a sudden you change the world.”

Prosecutors also played an interview from April 2016 on “The Today Show” in which Holmes told Maria Shriver she was “devastated that we did not catch and fix these issues faster.” Later in the clip, Holmes said “anything that happens in this company is my responsibility at the end of the day.”

Peterson testified that after that interview she and Dan Mosley, another Theranos investor, met with Holmes and other employees in Palo Alto to ask, “What’s going on?” It was their first time meeting with Holmes since making the investment, according to Peterson.

“[Holmes] very much downplayed what had been happening in the press,” Peterson said. “Much of the correspondence we had received from the company was downplaying what we had seen in the news.”

Juror questionnaires

Separately in the trial, federal prosecutors have renewed their fight to keep juror questionnaires from being unsealed, because they say the majority of the jurors have expressed concern over the matter.

Several media companies, including CNBC’s parent company NBCUniversal, are asking the judge to release the pre-trial jury questionnaires, which include information on their media exposure, views on topics like health care and investing and their religious beliefs.

“During the interviews, all but two of the jurors expressed some level of concern regarding either their or their family’s privacy or safety/security or said that the release of certain information in their completed questionnaires would cause personal embarrassment,” the government said.

Holmes now wants to block the release of the juror questionnaires, changing her previously neutral stance on the issue.

“Disclosure would distract the jurors and expose them to outside information and influence, and the prospect of post-verdict harassment would threaten to taint their decision-making as they deliberate in this case,” attorneys for Holmes wrote in the filing.

In early October, the court interviewed each juror and alternate juror about any potential concerns relating to the release of personal information.

“Ms. Holmes is concerned that this issue has cast a cloud over these proceedings,” according to a filing. Her lawyers added that jurors “may not be able to fairly judge Ms. Holmes’ innocence or guilt.”

The 12-person jury deciding Holmes’ fate consists of eight men and four women. Two alternate jurors remain.

Read original article here

Third juror dismissed in trial of Theranos founder Elizabeth Holmes

Elizabeth Holmes, founder of Theranos Inc., left, arrives at federal court in San Jose, California, on Tuesday, Oct. 12, 2021.

David Paul Morris | Bloomberg | Getty Images

SAN JOSE, CALIF. — A third juror was dismissed in Elizabeth Holmes’ criminal trial on Friday for what the judge said was “good cause.” That leaves only two alternates in a trial that’s expected to last until December.

U.S. District Court Judge Edward Davila told prosecutors and defense attorneys for Holmes that he received an email from juror No. 5 on Friday morning. The judge, along with Jeffrey Schenk, an assistant U.S. attorney, and Kevin Downey, a defense attorney for Holmes, spoke with the juror in chamber.

“The court had found good cause to excuse a juror,” Davila told the courtroom upon his return. There was no explanation given for excusing the female juror.

An alternate juror was selected to join the main bench. The impaneled jury deciding the fate of Holmes consists of eight men and four women.

“The juror raised the issue on their own, so they began to believe their ability to serve as an impartial juror was compromised,” said Danny Cevallos, an attorney and NBC News legal analyst, in an interview. “Apparently the court agreed with them,” said Cevallos, who’s been following the case but was not present in the courtroom.

Holmes’ high-profile trial began in San Jose seven weeks ago. The second juror was removed two weeks ago after revealing that, due to her Buddhist beliefs, she could not in good conscious return a verdict that may send Holmes to prison. Last month, a 19-year-old juror was dismissed for financial hardships.

Losing too many jurors runs the risk of a mistrial. However, Cevallos said that, according to a federal rule, after a jury has started deliberations a judge may permit a jury of 11 to return a verdict.

Holmes has pleaded not guilty to ten counts of wire fraud and two counts of conspiracy to commit wire fraud. Federal prosecutors allege Holmes and her co-conspirator, former company president Ramesh “Sunny” Balwani, engaged in a decade-long multimillion-dollar scheme to defraud investors and patients with regards to Theranos’ blood-testing technology.

Holmes and Balwani were indicted in 2018. Her trial has been delayed multiple times due to pandemic-related challenges and Holmes’ pregnancy. Balwani, who also pleaded not guilty, will face a separate trial next year.

Even in the case of a mistrial, Holmes would not be in the clear.

“A retrial, which the government certainly would do, would put Elizabeth’s life on hold again and drain her accounts even further,” Cevallos said. “So as much as a mistrial isn’t a conviction sometimes you’d rather get to the verdict.”

Skepticism from Pfizer

Following the juror’s departure, a scientist at Pfizer, Shane Weber, took the stand. Weber evaluated Theranos in 2008, and reviewed documents related to the blood-testing technology. He later concluded that Pfizer should not pursue a deal with the company.

In his December 2008 summary of a report, Weber recommended that “Theranos does not at this time have any diagnostic or clinical interest to Pfizer,” but he recommended the company revisit the matter every six months.

Weber’s report was shown to jurors. In it, Weber wrote, “Theranos has provided a poorly prepared summary document of their platform for home patient use with anti-angiogenic therapies.”

Further down, he wrote, “Theranos has provided non-informative, tangential, deflective or evasive answers to a written set of technical due diligence questions.”

Weber told his supervisors in an email in January 2009, that he spoke to Holmes to explain that Pfizer would not be using Theranos’ at-home products for patients.

“I was polite, clear, crisp and patiently firm as she pushed back,” the email said. “She asked for other names at Pfizer to approach and I politely deflected.”

Jurors were shown a version of a Theranos report that Holmes had sent to Walgreens executives with the Pfizer logo on it. Weber testified that Pfizer didn’t approve the use of its logo on the report.

“Would it be fair to say in 2010 or after that Pfizer endorsed Theranos technology?” Robert Leach, an assistant U.S. attorney, asked.

Weber responded, “Uh, no.”

Under cross-examination, Weber told jurors that his report on Theranos was never sent to Holmes.

‘Keep things under wraps’

Also on Friday, jurors heard from Bryan Tolbert, who made an investment in Theranos in 2006 and 2013 through Black Diamond Ventures. The firm, which was founded by by Chris Lucas, invested $5 million in the start-up.

Tolbert told jurors that there was limited information about Theranos at the time, but “it felt like a revolutionary technology and you wanted to preserve to your advantage.”

“Chris and I wanted more information, more financial information, more visibility about what was going on,” Tolbert said. “I certainly thought it was intentional they were trying to keep things under wraps.”

WATCH: Another Theranos insider testifies against founder Elizabeth Holmes

Read original article here