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Jurors to weigh Elizabeth Holmes' fate after a 15-week fraud trial

Elizabeth Holmes walks into federal court in San Jose, Calif., Friday, Dec. 17, 2021.
Nic Coury
Elizabeth Holmes walks into federal court in San Jose, Calif., Friday, Dec. 17, 2021.

Eight men and four women have sat in a federal courthouse in San Jose. Calif. for nearly four months. They have taken in testimony from a parade of witnesses in the criminal fraud case against former Silicon Valley superstar Elizabeth Holmes.

On Monday, the jury will start sharing their opinions with each other for the first time and begin debating whether Holmes is a callous scam artist or a tech visionary who got in over her head.

Holmes' legacy and freedom hang in the balance.

Jury deliberations conclude only when the jury unanimously agrees on a verdict, a sometimes-fraught and emotional process that can wrap up in a matter of hours or drag on for weeks.

If they fail to reach a consensus, also known as a hung jury, the judge can declare a mistrial.

Legal experts say the testimony of Holmes herself, who spent seven days on the witness stand in her defense, may prove to be decisive since prosecutors' case hinges on persuading the jury that Holmes intentionally deceived investors as she built the blood-testing startup Theranos into a $9 billion operation and captured the national spotlight as the latest wunderkind with starry-eyed ambitions to upend an entrenched industry.

Prosecutors have argued that Holmes lied about what Theranos' technology could accomplish to drum up investment. She pledged it would process hundreds of tests, and one day more than a thousand, when it really could scan for about a dozen tests. Reporting in the Wall Street Journal, starting in 2015, exposed the holes in Holmes' story. Not long after, the company collapsed in scandal.

"She chose fraud over business failure. She chose to be dishonest with her investors and patients," Assistant U.S. Attorney Jeff Schenk told the jurors on Thursday. "That choice was not only callous, it was criminal."

Holmes' lawyer Kevin Downey has thrown a dizzying number of possible defenses at jurors, all with the aim of making the story of Holmes appear more tangled than the government portrayed.

Downey has suggested other Theranos employees were to blame for the machines' failures. The defense has accused Holmes' deputy, with whom she was romantically involved, of intimate-partner abuse. And, the defense has argued, the government simply does not have enough evidence to convict Holmes of any crime. Downey reminded the jury that if they harbor any "reasonable doubt" that Holmes did not commit the crimes the government is charging, she must be acquitted.

"The government is showing an event looks bad," Downey said during his closing arguments. "But at the end of the day, when all of the evidence flows together, it isn't so bad."

Holmes, Downey told the jury on Friday, always acted in good faith and was propelled by ambition and optimism. He said Holmes "believed she was building a technology that would change the world."

On the stand, patients and investors recalled hopes crushed as Theranos' failings became clear

Prosecutors called nearly 30 witnesses over 15 weeks, including former Defense Secretary Jim Mattis, to try to cast Holmes as a villain who ran a massive scam by promoting a blood-testing device that barely worked, buried evidence of its shortcomings and delivered faulty test results to patients after running blood samples not through her supposed miracle technology, but modified commercial lab equipment.

"At Theranos, they just didn't tell people that they were using third-party devices to test blood because it was inconsistent with the narrative that they were pitching," prosecutor Schenk told the jury. "That was just a secret at Theranos."

It is not a crime, of course, for a private company to keep some things confidential. But prosecutors say when Holmes told investors and potential financial backers that Theranos never used third-party devices to test blood samples, it was an intentional lie aimed at recruiting investors that amounted to criminal fraud.

In all, Holmes faces 11 fraud-related counts connected to allegedly hoodwinking investors and patients. If the jury renders a guilty verdict on any of the charges, Holmes faces the maximum possible penalty of 20 years in prison, although legal experts expect she would receive a far lighter sentence. If convicted, the exact punishment would be determined at a later date by the judge who has presided over the trial, U.S. District Judge Edward Davila.

It is unusual for the leader of a technology company to be criminally charged in connection with its failure. Some observers see the Holmes trial as a referendum on the tech industry, which embraces bold and eccentric founders who break rules in pursuit of disrupting industries. Others are more skeptical, pointing out that many major venture capital firms in Silicon Valley never backed Theranos and that the company's inflated promises were especially egregious and outside of the norm in the startup world.

Jury will weigh how alleged abuse affected Holmes' mental state and actions

On the witness stand, Holmes said Ramesh "Sunny" Balwani, her ex-boyfriend who was the No. 2 at Theranos, regularly berated her and emotionally and physically abused her, allegations that she had not made publicly before the trial

Legal experts have debated whether that testimony will help or hurt Holmes, since it is unusual to bring claims of intimate-partner abuse into a white-collar criminal trial. At the same time, others have said such a harrowing story of surviving alleged mistreatment at the hands of a partner 19 years her senior may resonate with jurors.

The introduction of the abuse claims put the government in an awkward position, forcing the mostly male legal team to question Holmes' accusations and attempt to poke holes in her story. It created some uncomfortable moments in the courtroom, with prosecutors directing Holmes to read aloud intimate text messages and emails she shared with Balwani. At times, she welled up on the stand.

In his closing remarks, prosecutor Schenk tried to draw a distinction: He said returning a guilty verdict is not the same as discounting Holmes' accusations against Balwani.

"Your verdict does not validate her claims of abuse," he said. "You do not need to decide whether that abuse happened in order to reach a verdict."

A lawyer for Balwani has denied the abuse allegations. He faces a separate fraud trial on the same charges in February.

In some of Downey's final moments before the jury, he pulled up a list of the star-studded Theranos board of directors. It included the former chief executive of Wells Fargo, a onetime director of the Centers for Disease Control and Prevention and former U.S. Secretary of State Henry Kissinger.

"Do you think," he asked the jury, "that Ms. Holmes, in connection with undertaking her work at Theranos, decided that she would assemble that group of individuals for the purposes of conducting a criminal conspiracy?"

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Bobby Allyn is a business reporter at NPR based in San Francisco. He covers technology and how Silicon Valley's largest companies are transforming how we live and reshaping society.
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