Elizabeth Holmes trial delayed again, as juror tested for COVID
The fraud trial of Elizabeth Holmes, the disgraced founder of blood-testing startup Theranos, was delayed — again — Friday while a juror who said he had a COVID-19 scare gets tested for the virus.
In an impromptu Zoom hearing late Thursday, US District Court Judge Edward Davila told trial attorneys that juror #9 said he may have been exposed to COVID-19 over Labor Day weekend, though he didn’t have any symptoms.
“It’s a little, I don’t want to say ominous, but it’s of concern that before we finish the first witness we have an issue,” Davila said. “For our sake, around the county there are still high numbers and we hope everybody continues to be safe.”
Prosecutors said they plan to call a lengthy list of witnesses over the next few months, so one day won’t make a difference.
But, US Assistant Attorney Jeff Schenk noted to the judge, the juror in question is vaccinated against COVID-19.
“I think at the stage we’re in it would be safe to proceed with trial tomorrow but I understand that the court might determine especially in the beginning to be a little bit safer, to be extra careful,” Schenk said.
The trial is expected to resume on Tuesday, according to the US District Court for the Northern District of California.
It’s the third time the trial, one of the most widely watched corporate fraud trials in years, has been delayed, with the first two setbacks caused by pandemic restrictions and then Holmes’ pregnancy.
The trial finally began on Wednesday with opening statements in which prosecutors made their case to the jury that Holmes lied and cheated her way to fortune and fame as she duped investors and patients alike.
Holmes’ defense team countered by painting a more sympathetic picture of the former CEO, saying that she’s no villain but rather a hard-working businesswoman whose company failed.
Prosecutors told jurors on Wednesday that they’ll present evidence over the coming months that will show that Holmes and her then-boyfriend and Theranos COO Ramesh “Sunny” Balwani carried out a scheme to defraud Theranos investors and patients.
Both Holmes and Balwani have pleaded not guilty to two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.
They will be tried separately and court documents suggest Holmes will seek to convince jurors Balwani manipulated her and was the true mastermind of the fraud.
She could be sent to jail for 20 years if found guilty.
Amid, Holmes has been reportedly living with her partner Evans in a posh home on one of America’s most expensive estates.
Attorneys for the founder of Theranos — which was once valued north of $9 billion — have told the Northern California judge overseeing the case that Holmes herself is “highly likely” to take the stand and defend herself.
High-profile investors and board members of Theranos, including former Secretary of State Henry Kissinger, former Secretary of Defense James Mattis and Rupert Murdoch, the owner of New York Post parent company News Corp., may also be called on to testify, court documents suggest.
Jurors will also likely hear from Theranos patients, including one man who was misled to believe he had prostate cancer and two other patients who got false-positive HIV test results. However, the scope of their testimony must be limited to the fact that they were misled by the tests, and not the emotional impact.
Since founding Theranos in 2003, Holmes made lofty claims about the company’s machine, called “Edison,” that could quickly run dozens of tests for everything from diabetes to cancer with a pinprick of blood.
The convenience and speed of Edison devices, Holmes told potential investors, would disrupt the multibillion-dollar lab testing industry dominated by giants like Quest Diagnostics.
But the company never published peer-reviewed studies of its product and operated largely out of public view for years.
By 2010, the company nabbed a valuation of $1 billion — before Theranos even had a website.
Holmes continued to use glowing press coverage and her lofty claims to bring in funding from largely East Coast investors, foregoing the traditional Silicon Valley venture capitalists.
The company’s high-profile investors and board members bolstered hype in the company and continued to drive its valuation up — until a 2015 Wall Street Journal article alleged it was all a fraud.
The same day that article was published, Holmes appeared on CNBC’s “Mad Money” with Jim Cramer to rebuff the charges, claiming the paper was trying to stifle innovation.
“First they call you crazy, then they fight you, then you change the world,” she said on CNBC, paraphrasing a quote that’s often misattributed to Mahatma Gandhi.
Theranos gradually bled employees and was officially defunct by 2018. That same year, the Securities and Exchange Commission charged Holmes with “massive fraud,” accusing the founder of taking more than $700 million from investors while lying about her company’s technology.
And later in 2018, the US Department of Justice also charged Holmes and Balwani, accusing them of defrauding investors, medical professionals and customers.
