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Theranos founder Elizabeth Holmes' fraud trial begins

September 9, 2021

Once a star of Silicon Valley, biotech company founder Elizabeth Holmes is facing several counts of fraud. Prosecutors have accused her of "lying and cheating" in opening arguments.

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Elizabeth Holmes leaves the United States Federal Courthouse in San Jose, California
Elizabeth Holmes, founder of failed tech startup Theranos, faces up to 20 years in prison if found guiltyImage: Nic Coury/AP Photo/picture alliance

The fraud trial of Elizabeth Holmes, founder of biotech firm Theranos, began on Wednesday in California.

Holmes is accused of making false claims about her company's diagnostic abilities, specifically devices that could apparently run a battery of tests from a drop of blood.

The tests were said to be faster and far cheaper than lab results. But now the once celebrated CEO whose start-up was valued at $9 billion (€7.6 billion) is accused of committing fraud by deceiving her investors and those who would use the device.

Holmes accused of 'lying and cheating'

In opening arguments, federal prosecutor Robert Leach told the jury: "This is a case about lying and cheating to get money."      

"The defendant's fraudulent scheme made her a billionaire," Leach told the court.

"The scheme brought her fame, it brought her honor and it brought her adoration," Leach added.

The prosecution showed jurors parts of a Theranos presentation with claims that blood tests could give "highest levels of accuracy and precision."

Leach said that according to those with inside knowledge, the technology was "plagued by issues and repeatedly failing quality control."

When entrepreneurs are fraudsters

Defense said she made a 'mistake'

Holmes' legal team argued that she was not the "villain" she was being made out to be and had given her all to Theranos.

"Elizabeth Holmes did not go to work every day intending to lie, cheat and steal. The government would have you believe her company, her entire life, is a fraud. That is wrong. That is not true," her defense attorney Lance Wade told the court.

"Theranos failed in part because it made mistakes, but mistakes are not crimes. A failed business does not make a CEO a criminal," Wade argued.

Holmes, 37, has pleaded not guilty to 10 counts of wire fraud along with two counts of conspiracy. If convicted, she faces up to 20 years of imprisonment.

Former Theranos executive Ramesh "Sunny" Balwani, is scheduled to be tried separately, and has also pleaded not guilty.

US District Judge Edward Davila is presiding over the case, with a 12-member jury and five alternate jurors.

kb/rs (AFP, Reuters)