Theranos founder Elizabeth Holmes faces closing arguments - The Washington Post

“The story of Theranos is in some ways a tragedy,” prosecutor Jeff Schenk said during his closing argument. “What happened to the investors and the patients should not have happened, they should have been treated with honesty.”

Holmes is accused of misleading investors and patients about her company’s blood-testing technology, which she once said was capable of running hundreds of tests from just a few drops of blood pricked from a patient’s fingertip. In reality, Theranos was using its device for just a handful of tests, and former employees testified that results were erratic and sometimes inaccurate.

“Ms. Holmes made the decision to defraud her investors, and then to defraud patients,” Schenk said. “She chose fraud over business failure. She chose to be dishonest with investors and with patients.”

She is charged with 11 counts of wire fraud and conspiracy to commit wire fraud and has pleaded not guilty. Closing arguments by both the defense and prosecution are expected to conclude by Friday afternoon, after which the decision will be turned over to the jury.

Holmes rose to fame as a young female entrepreneur in Silicon Valley, starting her company when she was a Stanford University student and growing it to raise hundreds of millions of dollars from investors. She graced the covers of national magazines in her uniform modeled off Apple founder Steve Jobs — a black turtleneck, completed with a messy blond bun.

But the founder fell from grace after the Wall Street Journal published an investigation into Theranos in 2015, revealing a dysfunctional workplace and a company that was relying on traditional lab machines rather than its proprietary device.

Holmes’s defense lawyers began their closing arguments Thursday afternoon, setting out to refute the government’s allegations.

“Elizabeth Holmes was building a business, and not a criminal enterprise,” her lawyer, Kevin Downey, said.

He repeated what he told jurors at the beginning of the trial: that the government was trying to simplify a case that was more complicated than it seemed. The government shows an event that looks bad, Downey said, but when more information is uncovered, “it isn’t so bad.”

He argued that Theranos, a young company with a young CEO, could not have hoodwinked a sophisticated company like Walgreens. And he pointed to a slide of Theranos’s board, which included Henry Kissinger, former secretary of state George Shultz and former CDC director William Foege, asking the jurors if that was the type of board Holmes would form if she were trying to pull off a crime.

“That seems to me, ladies and gentlemen, to be very, very unlikely,” he said.

Her trial has opened a window into the secretive world of Silicon Valley start-ups and cast a spotlight on Holmes’s former list of investors and board members, which included prominent figures such as Kissinger and Rupert Murdoch.

During its closing arguments, the prosecution outlined the areas in which Holmes allegedly misled investors and patients: including suggesting Theranos had active work with the U.S. military, saying that Theranos’s device was easier, faster and cheaper than traditional methods, and that the company was financially stable and growing.

But Theranos’s devices were never used on military helicopters or in the battlefield, as investor witnesses said the company told them. Theranos was relying on outside lab equipment to run tests. And the company was not generating close to the amount of revenue some investors were shown in projections.

Holmes knew what she was saying was untrue, Schenk argued, and she did it to get the money to keep the company running.

Schenk pushed back on the defense’s portrayal of Holmes as a young, earnest entrepreneur. She was in control and was told the bad things as well as the good, he said.

The investors “were not interacting with someone who had inexperience running her company,” Schenk said.

Holmes has been on trial here for more than three months, as prosecutors called nearly 30 witnesses from former employees to investors to the former CEO of Safeway, which had a failed partnership with Theranos.

Earlier in the trial, investors told prosecutors they believed Theranos’s devices were working better and were used more widely than they really were.

“I thought all along that we were doing it on Theranos gear,” former defense secretary and Theranos board member Jim Mattis said on the stand in September. “And I’m a member of the board and I thought that.”

Holmes was one of only three witnesses for the defense, taking the stand over the course of seven days to tell jurors that she acted in good faith and believed that she was telling investors the truth. Holmes pushed the blame onto her employees, who she said told her in presentations that the company was doing well.

Holmes denied ever taking steps to mislead investors.

“They weren’t interested in today or tomorrow or next month, they were interested in what kind of change we could make,” she said of her funders.

She also accused her former boyfriend and business partner, Sunny Balwani, of abusing and controlling her. Balwani, who faces a separate trial next year for the same charges, has denied the allegations.

“You do not need to decide whether that abuse happened to reach your verdict,” prosecutor Schenk told jurors Thursday.