United States v. Elizabeth A. Holmes, et al.

United States v. Elizabeth A. Holmes, et al., (No. 18-CR-00258-EJD) is an ongoing United States federal criminal case against the founder of now-defunct corporation Theranos, Elizabeth Holmes, and its former president and COO, Sunny Balwani. The case alleges that Holmes and others perpetrated multi-million dollar wire-fraud schemes to defraud investors, doctors, and patients.[1] A five-person team from premier white-collar crime litigation firm Williams & Connolly is defending Holmes.[2] The case began on August 31, 2021, and is expected to last 13 weeks or longer. On September 2, 2021, a jury of Santa Clara County residents was selected, consisting of 7 men and 5 women.[3] If convicted, Holmes faces up to 20 years in federal prison, plus potentially millions in restitution and fines.[4]

United States v. Holmes
CourtUnited States District Court for the Northern District of California
Full case nameUnited States v. Elizabeth A. Holmes, et al.
DecidedOngoing
Court membership
Judge(s) sittingEdward J. Davila

Background

Founded by Holmes in 2003, Theranos was a blood-testing company that claimed to revolutionize blood testing by developing testing methods that could use surprisingly small volumes of blood, such as from a fingerprick.[5][6] The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company's technology claims and whether Holmes had misled investors and the government. In 2018, the U.S. Securities and Exchange Commission charged Theranos and Holmes with deceiving investors by "massive fraud" through false or exaggerated claims about the accuracy of the company's blood-testing technology. Holmes settled the charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and being barred from serving as an officer or director of a public company for ten years.[7]

Proceeding

Holmes and Balwani are charged with two counts of conspiracy to commit wire fraud in violation of 118 U.S.C § 1349 and nine charges of wire fraud in violation of 18 U.S.C §1343.[1] The case is being prosecuted by the United States Attorney for the Northern District of California, with Holmes being defended by white-collar crime litigation firm Williams & Connolly.[8] The case began on August 31, 2021,[4] after being delayed for over a year due to the COVID-19 pandemic and Holmes's pregnancy;[9] and is expected to last 13 weeks or longer. On September 2, 2021, a jury of Santa Clara County residents was selected, consisting of 7 men and 5 women.[10] If convicted, Holmes faces a maximum sentence of twenty years in prison, and a fine of $250,000, plus restitution, for each count of wire fraud and for each conspiracy count.[4][11]

Adam Rosendorff, a former lab director of Theranos and key witness of Wall Street Journal reporting, testified in court.[12]

On November 29, 2021, Holmes testified in court that she had been raped while she was a student at Stanford and that she had sought solace from Balwani in the aftermath of the incident.[13][14] She also said that Balwani sought control over her during their romantic relationship, which was still ongoing when the alleged criminal acts took place, and at times berated and sexually abused her.[13][15] However, she also testified that Balwani had not forced her to make the false statements to investors, business partners, journalists and company directors that had been described in the case.[14]

Balwani faces the same charges as Holmes and pleaded not guilty. He is set for a separate trial in 2022.[12]

References
  1. "U.S. v. Elizabeth Holmes, et al". www.justice.gov. 2019-02-26. Retrieved 2021-09-25.
  2. "'Failure Is Not a Crime' | Boston College Law School Magazine". Retrieved 2021-09-25.
  3. Griffith, Erin; Woo, Erin (2021-09-02). "A jury is selected for the Elizabeth Holmes trial". The New York Times. ISSN 0362-4331. Retrieved 2021-09-25.
  4. "U.S. v. Elizaafterbeth Holmes, et al". www.justice.gov. 2021-06-21. Retrieved 2021-07-29.
  5. Levine, Matt (March 14, 2018). "The Blood Unicorn Theranos Was Just a Fairy Tale". Bloomberg View. Archived from the original on March 14, 2018. Retrieved March 14, 2018.
  6. Abelson, Reed (April 24, 2016). "Theranos's Fate Rests With a Founder Who Answers Only to Herself". The New York Times. Archived from the original on June 13, 2018. Retrieved April 30, 2016.
  7. "SEC.gov | Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud". www.sec.gov. Retrieved 2020-08-23.
  8. "'Failure Is Not a Crime' | Boston College Law School Magazine". Retrieved 2021-09-25.
  9. Khorram, Yasmin (March 12, 2021). "Elizabeth Holmes trial delayed because she's pregnant". CNBC. Retrieved March 12, 2021.
  10. Griffith, Erin; Woo, Erin (2021-09-02). "A jury is selected for the Elizabeth Holmes trial". The New York Times. ISSN 0362-4331. Retrieved 2021-09-25.
  11. Electronic Case File Entry No. 756, login required
  12. Rosenblatt, Rosen (2021-10-05). "Key Theranos Witness Tied by Holmes to Other Troubled Labs". Bloomberg. Retrieved 5 October 2021.
  13. "Elizabeth Holmes testifies was her ex-partner was controlling, sexually assualted her". Washington Post. November 29, 2021. Retrieved November 29, 2021.
  14. https://www.cnn.com/business/live-news/elizabeth-holmes-trial-11-29-21/index.html
  15. Somerville, Heather (November 29, 2021). "Elizabeth Holmes Trial: Theranos Founder Says Balwani Berated, Abused Her". Wall Street Journal. Retrieved November 29, 2021.
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