Elizabeth Holmes, the disgraced founder of catastrophically failed blood testing startup Theranos, will face trial next year, with jury selection slated for July 28, 2020 and the trial itself slated for the following August, per TechCrunch.
Holmes and ex-Theranos president Ramesh “Sunny” Balwani have been indicted on 11 criminal charges in total—nine counts of wire fraud in varying amounts up to $100 million, and two counts of conspiracy to commit wire fraud. Prosecutors allege that Holmes and Balwani defrauded investors, doctors, and patients with false claims about supposedly miraculous blood-testing devices varyingly branded as the TSPU, Edison, or minilab, which they knew were hopelessly unworkable. Holmes could face a maximum sentence of two decades in prison and six-figure fines.
Theranos and its principals raised over $700 million (and achieved a $9 billion valuation) in what the Securities and Exchange Commission later deemed an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.” While Holmes settled with the SEC in a resulting civil fraud case, Balwani is fighting both cases.
According to Bloomberg, Holmes is apparently planning on fighting the charges by going after John Carryrou, the Wall Street Journal reporter who revealed many of the most damaging details about Theranos in a series of articles and characterized the company’s conduct as unethical and unauthorized experimentation on patients. Pre-trial information sharing with prosecutors shows that Holmes’ attorneys have “unearthed Carreyrou’s early contacts with New York state regulators and various federal agencies” as well as with a doctor in Arizona, apparently in an attempt to paint regulators as unduly influenced by an unethical journalist eager to damage Theranos:
Holmes is pushing prosecutors to turn over every such communication they’re aware of because Carreyrou “went beyond reporting the Theranos story,” her lawyers said in a court filing. He prodded sources to lodge complaints about the company with regulators, and then lobbied agencies to pursue the complaints, according to the filing.
“The jury should be aware that an outside actor, eager to break a story, and portray the story as a work of investigative journalism, was exerting influence on the regulatory process in a way that appears to have warped the agencies’ focus on the company and possibly biased the agencies’ findings against it,” her attorneys wrote. “The agencies’ interactions with Carreyrou thus go to the heart of the government’s case.”
Bloomberg noted that legal experts say this kind of defense generally seems to pop up in cases where prosecutors have a strong case and could be an attempt to find “a single juror sympathetic to the idea that government agencies were in cahoots with Carreyrou and overzealous in their pursuit.” Prosecutors in turn have insisted that they did not interview or request documents from Carryrou or anyone else from the Journal, Bloomberg wrote, and that they were not aware of any interactions between Carryrou and agencies involved in the case outside of inquiries he placed via “emails and voicemails.”
“If I were the government, I would argue that none of this is relevant, and it is likely to distract the jury from the real issue in the case,” former federal prosecutor and University of Michigan law school instructor Barbara McQuade told Bloomberg. “The case is about the conduct of Theranos, not Carreyrou.”
Holmes, who before her indictment was reportedly so overconfident she was mulling starting another company, seems to have her work cut out for her. On Friday, the Journal separately reported that prosecutors said they gave the defense over two million pages of evidence and plan on turning over more; one of Holmes’ attorneys, Kevin Downey, complained that “I don’t even know what a gigabyte of data is. My guess is if you print it out it would fill up this entire room.”