The criminal jury trial of Elizabeth Holmes began on Sept. 8, and there is already drama galore. In a show of portraying herself as a new mom being unfairly prosecuted by the federal government, Holmes, who had a baby a month ago, arrived in court accompanied by her new husband and other family members. Although her lawyers did the talking during jury selection, as well as opening statements, we anticipate eventually hearing from Holmes herself.
The high-risk, high-reward strategy may be Holmes’ best bet due to a defense strategy that hinges on her ability to convince jurors that she, too, is a victim here.
That may well be the pivotal and most critical part of the trial, and it is a rare occurrence in a trial like this — as if we needed more intrigue. Defendants know that testifying in their own defense may expose them to potentially scathing cross-examination. But the high-risk, high-reward strategy may be Holmes’ best bet due to a defense strategy that hinges on her ability to convince jurors that she, too, is a victim here.
Facing the possibility of up to 20 years in federal prison, Holmes has been charged with 12 felony counts including wire fraud, conspiracy to commit wire fraud, and defrauding patients and investors. She has already previewed her defense in court filings: She alleges that Theranos — the blood testing startup that she started at the age of 19 after dropping out of Stanford University — was a complicated business but was not a fraud, and that she was emotionally, physically, and sexually abused by her former business partner and boyfriend, Ramesh “Sunny” Balwani.
Balwani, the company’s chief operating officer, faces his own jury trial in January. He denies Holmes’ allegations of wrongdoing, and they are being tried separately as their interests are in direct and obvious conflict.
An original list of 240 potential jurors completed a 28-page questionnaire to determine, preliminarily, if they were suitable to serve in Holmes’ trial. The questionnaire asked pointed questions about their exposure to media coverage, news and other information sources regarding topics like Holmes and Theranos.
Based upon those initial answers, the 240 were whittled down to 132 prospective jurors who were called in for direct questioning by the lawyers and the presiding judge. The entire voir dire process took three days to complete, and both sides ultimately selected seven men and five women to decide Holmes’ fate. The ages range from 19 to approximately 60, with six white, four Hispanic and two Asian jurors.
Federal prosecutors advised that Holmes knew that she was committing fraud when she misrepresented the technological capabilities of Therano’s blood testing systems.
The opening statements on both sides essentially gave a road map for what jurors could expect to see and hear during the trial, which is expected to take at least 13 weeks. Federal prosecutors argued that Holmes knew that she was committing fraud when she misrepresented the technological capabilities of Theranos’ blood testing systems. Using the phrase, “out of time, out of money,” the government argued that Holmes overrepresented to investors how well the company was doing when, in fact, Theranos was struggling to make payroll and payments to vendors.
Prosecutors also argued that Holmes knew that there were inaccuracies in the Theranos blood tests and that these inaccurate results had devastating, real-life consequences for the patients who received them. Two examples given by the assistant U.S. attorney were one patient who was told that he had prostate cancer, but later found out that he did not, and a woman who was mistakenly told that she had had a miscarriage. The prosecution told jurors that they would hear testimony from several patients with similar stories — which will, in my opinion, be powerful and damning evidence.
In contrast, the defense emphasized that Holmes’ initially wildly successful blood-testing startup, with a one-time valuation of $9 billion, was simply a business gone bad and not the vehicle for fraud that federal prosecutors are claiming it was. Her defense counsel argued that there was some legitimate, added value provided by the blood test technology that was functional and that Holmes never intentionally deceived the company’s investors. Pointing a finger at Balwani, her counsel further argued that his repeated abuse of Holmes made her susceptible to being under his control. The prosecution’s first witness was So Han Spivey, who also goes by Danise Yam, who was Theranos’ controller from 2006-2017. Yam testified that for years, the company did not have its financial statements audited, which is highly unusual. She also showed the jury that, for a number of years, Theranos was financially hemorrhaging: net losses of $27.5 million in just 2011 alone. The trial was forced to pause on Thursday after a juror was potentially exposed to Covid-19. But as it resumes, interested parties will be watching intently to see if Holmes ultimately takes the stand. She is currently on the witness list for the defense and it will certainly be intriguing to hear her attempt to defend her actions. Holmes lived a “high on the hog” lifestyle, with private jet travel, extravagant shopping sprees and even jewelry bought and paid for by Theranos. And there is no guarantee that she will testify; a game-time decision can be made. However, she has publicly set forth the “Balwani blame defense” and she is the only person who can testify about the alleged abuse at the hands of Balwani and try to convince jurors that it led her to do things she would not have done otherwise.
Katie S. Phang
Katie S. Phang is the host of "The Katie Phang Show," which airs Saturdays at 12 p.m. ET on MSNBC. She is a legal contributor for NBC News and MSNBC based in Miami. She leverages her significant trial attorney experience to provide analysis and commentary on the latest legal issues. 
