The key prosecution points made by Assistant US Attorney Jeffrey Schenk were:
- Elizabeth Holmes’ decisions were all hers. She first defrauded investors, then deceived patients.
- “She chose fraud over business failure. She chose to be dishonest with investors and with patients.”
- Elizabeth Holmes was not a young, naive CEO. She had headed Theranos for nearly a decade. But it was ‘a house of cards.’
- A decision about Sunny Balwani’s abuse is not pertinent to the case and does not have to be made to reach a verdict.
- That has to be made on whether this was deliberate investor and patient fraud.“Ms. Holmes knew these honest statements would not have led to any revenue,” Schenk said. “She chose a different path.”
Mr. Schenk reviewed the testimony of all 29 witnesses and statements made by Holmes herself, with the specific aim of refuting every defense point made about her not being aware that the technology didn’t work, or that she was not in charge of the marketing, advertising, business development, partnerships, and finances. He put a very fine and obvious point on it with a chart for the jury entitled “Knowledge of falsity,” which listed her false statements alongside exhibits.
Enter the defense, represented by Kevin Downey. He started by telling the jurors that they had a high burden of proof in finding Holmes guilty “beyond a reasonable doubt”and that crucial information was left out of the government’s case. It was ‘incomplete’ and that their opinion would change with his review of the evidence. Holmes acted ‘in good faith’. In that review, Downey provided illustrations of 11 successful partnerships Theranos had with drug companies. As to the board, he pointed out that they were not cronies who one would expect in a fraudulent enterprise; “She appointed these people, an incredibly illustrious group of people.”
The defense continues on Friday. The jury will be given instructions after the defense concludes, and it’s expected they will have over the holidays to deliberate. MercuryNews (paywalled but refresh repeatedly to view), CNBC, The Guardian
To be continued….
TTA’s earlier coverage: Chapter 13, Chapter 12, Chapter 11, Chapter 10, (10-13 recap the Holmes testimony); Chapter 9, Chapter 8, Chapter 7, Chapter 6, Chapter 5, Chapter 4 (w/comment from Malcolm Fisk), Chapter 3, Chapter 2, Chapter 1