Theranos founder and CEO Elizabeth Holmes' trial began on Wednesday September 8th. The company, once valued at $9 billion, rose to fame due to it's supposed cost-efficient and life-saving tests performed by their machine, Edison. They claimed accurate tests could be done using only a finger prick of blood rather than a full vial from a vein. The company was awarded 176 patents
One member of the prosecution team, Robert Leach said, "This is a case about fraud, about lying and cheating to get money. The scheme brought her fame, it brought her honor and it brought her adoration. But under the facade of Theranos' success there were significant problems brewing."
The defense says Elizabeth Holmes was a hard-working businesswoman whose company failed, not the villain the prosecution claims. Lance Wade, one of Holmes' lawyers said, "Elizabeth Holmes did not go to work every day intending to lie, cheat and steal. In the end, Theranos failed and Ms. Holmes walked away with nothing. But failure is not a crime."
The prosecution claims that in 2009, after losing interest from Pfizer and other pharmaceutical companies, Holmes and her president/COO and ex-boyfriend Ramesh Balwani turned to fraud. Leach said, "Out of time and out of money, Elizabeth Holmes decided to lie."
Leach said Holmes allegedly defrauded investors by suggesting that the company's miniature lab had been vetted by Pfizer, that its technology was being used by the U.S. military, and that it would achieve more than $140 million in revenue by the end of 2014. None of which came to fruition.
Between 2010 and 2015, prosecutors said Holmes and Balwani defrauded investors and deceived patients when the company began making its tests commercially available, including a partnership with Walgreens. In 2015, The Wall Street Journal reported that the Theranos devices were flawed and inaccurate.
The defense said that only a small fraction of Theranos' blood tests were inaccurate. About 20 inaccurate tests among 8 million. They blamed the inaccuracies on processes and procedures not being followed. And that Holmes hired experienced lab directors who were legally responsible for what went on in the lab.
Holmes has pleaded not guilty to ten counts of wire fraud and two counts of conspiracy. She alleges that Balwani abused her emotionally and psychologically. Balwani has denied the allegation. He will be tried next year.