Prosecutors Call Theranos Ex-CEO Elizabeth Holmes A Liar And A Cheat As Trial Opens Defense lawyers say Holmes believed the company could screen for hundreds of diseases with just a finger prick of blood, a pledge that attracted millions of dollars in investment.

Prosecutors Call Theranos Ex-CEO Elizabeth Holmes A Liar And A Cheat As Trial Opens

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RACHEL MARTIN, HOST:

A greedy villain, that's how prosecutors described Elizabeth Holmes at the beginning of her trial yesterday. Holmes is the founder of Theranos, a biotech company that promised a blood test that would transform the industry. She stands accused of defrauding investors of millions of dollars and of deceiving patients. Holmes maintains her innocence, however. NPR's Bobby Allyn was in the courtroom. And he joins us now. Bobby, thanks for being here.

BOBBY ALLYN, BYLINE: You got it.

MARTIN: Tell us about Elizabeth Holmes' defense.

ALLYN: Yeah. In opening statements, her defense team said, basically, being a startup CEO is a tough job. You know, Holmes is working 12 hours a day, seven days a week. She thought of herself as this big visionary. And she founded this company when she was 19 as a Stanford dropout. You know, she hustled for 15 years to grow it into a $9 billion company. Then it imploded. When it comes to the fraud she's accused of, her defense lawyers did some wide-ranging finger-pointing. They said the No. 2 at the company, this guy Sonny Balwani, who is her ex-boyfriend, had more oversight than she did over some of the more dubious parts of the company, and that laboratory managers, not her, were ultimately responsible for the company's blood testing, which was exposed to be flawed and sometimes downright inaccurate. One of her defense lawyers, Lance Wade, said, quote, "Ms. Holmes made mistakes. But mistakes are not crimes. A failed business does not make a CEO a criminal."

MARTIN: OK. So that's the framework for the defense. How did prosecutors describe their case?

ALLYN: Yeah. They zeroed in on a moment when Theranos was burning cash and on the verge of bankruptcy. Prosecutors said Holmes got really desperate. They said she forged a document from Pfizer that made it look like the drug company was approving of Theranos, written even on Pfizer letterhead, when in fact, Pfizer had not said those things and actually said the opposite. Holmes used this document nonetheless to raise millions of dollars and to land all sorts of glowing media coverage, including landing on the cover of Fortune magazine. Meanwhile, prosecutors say Holmes' technology was a total myth. Prosecutor Robert Leach told the jury that Holmes lied and cheated to get money, and quote, "it's a crime on Main Street, and it's a crime in Silicon Valley."

MARTIN: So, I mean, the Holmes story has been everywhere - right? - I mean, intense media scrutiny, a bestselling book about all this. But what is, Bobby, the larger significance of this trial, do you think?

ALLYN: Yeah. Look; millionaires are minted all the time in Silicon Valley. And many who are chasing that kind of money do it by telling a story, you know, about themselves, about their products that they hope will change the world for the better. And sometimes that puts them at odds with regulators and the law. There's a sense out here that it's OK to push against boundaries. And Elizabeth Holmes was very much doing that. But prosecutors say the key difference here is she broke the law in the process. Traditionally, the norm in Silicon Valley has been move fast and break things. But, you know, maybe this trial, depending on the verdict, will temper some of that behavior. So yeah, Rachel, there's a debate raging out here in Silicon Valley now as people watch this trial. And it's, when does a startup's exaggerated claims potentially veer into the land of being illegal?

MARTIN: Any idea how long the trial is supposed to last?

ALLYN: Yeah. The judge is expecting this to go for three months. So now we're going to see a parade of witnesses, whistleblowers, experts, patients and even Holmes herself taking the stand. At about - you know, around the end of the year, the jury will start deliberating over Holmes' guilt or innocence. And if convicted, she faces up to two decades behind bars.

MARTIN: NPR's Bobby Allyn. Thank you.

ALLYN: Thanks, Rachel.

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