What John Carreyrou Expects at the Trial of Elizabeth Holmes

The federal trial of Elizabeth Holmes, the founder and former C.E.O. of the now defunct medical-testing tech startup Theranos, started on August 31st, three years after Holmes’s indictment on quite a few counts of fraud and conspiracy to commit wire fraud. Theranos was as soon as valued at greater than 9 billion {dollars}. It employed upward of seven hundred folks and had a board of administrators stacked with the likes of Henry Kissinger and James Mattis. Then, six years in the past, the firm collapsed like a soufflé, following a Wall Street Journal exposé by the reporter John Carreyrou, who wrote that the firm’s supposedly revolutionary know-how—a proprietary lab machine that might run a whole lot of medical assessments utilizing mere drops of blood drawn from a finger prick—was not at all what Theranos claimed it to be.

Carreyrou’s explosive reporting grew to become the foundation for a 2018 guide, “Bad Blood,” which tracks the rise and fall of Theranos, from Holmes’s founding of the firm as a nineteen-year-old Stanford dropout by way of her fall from grace. He is at the moment hosting “Bad Blood: The Final Chapter,” a podcast that covers the trial and delves into some of the astonishing proof the prosecution is more likely to introduce in the coming months—the trial, now getting into its third week, is predicted to final till mid-December, or longer. If Holmes, who has pleaded not responsible, is convicted, she faces as much as twenty years in jail, plus fines and restitution. (She and her authorized group have accused Carreyrou of advocacy journalism in bringing about Theranos’s collapse.) Holmes’s former boyfriend Ramesh (Sunny) Balwani, who was Theranos’s president and C.O.O., and has additionally pleaded not responsible, shall be tried individually subsequent 12 months. I lately spoke with Carreyrou. In our dialog, which has been edited for size and readability, we mentioned the chance that he’ll be known as as a witness, the protection’s possible try and pin the blame on Balwani, and ​​the hazard of Silicon Valley’s fake-it-till-you-make-it ethos.

Are you at the trial in San Jose now, or are you again in New York?

I’m again in New York. I used to be there for about eleven days for jury choice after which opening arguments. I’m planning to return, at the very least, for the finish of the trial and the verdict, but it surely’s attainable—even possible—that I should return earlier than then, as a result of I’m No. 6 on the protection’s witness listing. So I’d anticipate that at some level they’re going to subpoena me and name me to the stand. I’ve been watching my in-box, anticipating a subpoena to drop any day.

It should be attention-grabbing for you—the one that is aware of this story higher than nearly anyone on earth—to listen to it instructed once more, by way of this trial, to a jury that has by no means heard of Theranos or Elizabeth Holmes.

Presumably, they do now have twelve people who find themselves coming at this as clear slates. There has been one change in the jury’s composition in the previous couple of days—a younger lady received dismissed for monetary hardship, and was changed with an alternate. So now the composition of the jury is, I imagine, eight males and 4 ladies. And, of the eight males, 5 of them look like older white males.

That’s a demographic Holmes was good at taking part in to—her traders, her board.

It was onerous to learn these jurors as they have been listening to opening arguments. I believed the prosecution did an honest job with its opening argument: they stored it fairly easy and to the level. I additionally discovered the protection’s opening argument spectacular. They hit the factors that I anticipated them to: they tried to humanize Holmes as a lot as they may, and make the argument that, you understand, she was an entrepreneur who failed, however not essentially a criminal. And they teased their potential Svengali protection, which might be to put lots of the blame on Sunny, and to allege that he abused Elizabeth and was controlling her.

I don’t know what to anticipate. I feel the odds are nonetheless most likely in favor of a conviction, simply because of the numbers. The final 12 months for which I discovered information was 2018, when eighty-three per cent of federal felony defendants who selected to take their circumstances to trial ended up being convicted.

But all these different defendants aren’t Elizabeth Holmes. She’s a chameleon. She’s received unbelievable charisma. I feel she’s an ideal actress. If she goes on the stand to elaborate on this Svengali protection, then I anticipate her to return off as, like, this naïve younger lady. I feel she’s going to promote that picture onerous to the jury. I’m definitely not a hundred-per-cent assured that it’s going to end in a conviction.

I ponder whether it could be tough for Holmes to embody that character of the naïve younger lady who had the wool pulled over her eyes. It’s antithetical to the persona that she spent so lengthy cultivating: somebody focussed, in management, smarter than thou. An individual who’s right here to vary the world.

Yeah, it’s the reverse of the picture that she portrayed for years, earlier than the scandal erupted. And I anticipate the authorities to rebut no matter—properly, I assume it’s harsh to name it an act, however—no matter picture she portrays on the stand, and I do anticipate it to be a a lot softer picture. I do anticipate her to carry up her abuse allegations, if she goes on the stand. I feel that shall be the major purpose she testifies, to throw Sunny beneath the bus, and I’d anticipate the prosecution to counter that with movies of her at the peak of her fame, when she’s addressing audiences and searching extremely confident, assured, and in management. It shall be onerous, I feel, for the jury to reconcile the two.

Your preliminary reporting on Theranos was in 2015, and your guide got here out in 2018. Has the story modified in the years since?

The story hasn’t modified materially since my guide got here out. I’ve since gotten my arms on lots of the S.E.C. case paperwork [from S.E.C. fraud charges brought against Theranos, Holmes, and Balwani; both Theranos and Holmes settled in 2018]. There’s an entire sequence of textual content messages, spanning 5 years, between Elizabeth and Sunny. Some are redacted, at least in the model that I’ve, however lots will not be. If you learn these texts, it’s onerous to imagine that Sunny was the puppeteer and he or she was the puppet. They actually offer you the impression of two individuals who have been romantically concerned, and whose lives have been intertwined, and who consulted one another all the time. It offers you a way that this was a partnership of equals. In some of these texts, Sunny is even the one who voices phrases of warning, or expresses misgivings, whereas Elizabeth by no means appears to. The prosecutors have signalled that they’re going to make use of some of these texts, and, once more, I feel [these messages] are onerous to reconcile with what I’m calling the Svengali protection.

Another doc I’ve acquired was a sequence of notes that Elizabeth had written to herself—she had typed them on her pc. One of them was the focus of Episode 4 of my podcast. Tell me if I’m telling you stuff you already know—have you ever listened to the podcast?


O.Ok., so you understand about the “Mado” observe.

Which is extraordinary. [The note reads, “Really smart people picked off mado / Not you,” which, Carreyrou suggests, is Holmes comparing herself to Bernie Madoff.]

Right. So that was new for me, and definitely I discovered that titillating once I first found it. There have been additionally inner e-mails wherein Holmes was alerted to issues with faulty outcomes that sufferers have been receiving. One that involves thoughts is a few affected person who acquired a false end result suggesting that she was not pregnant, which led her medical doctors to discontinue her treatment, when the truth is she turned out to be pregnant. Holmes is in the e-mail string, and he or she says, “How did that happen?” There are e-mails from her brother, Christian Holmes, telling her about issues with the assessments and suggesting that they halt reporting sure check outcomes. I definitely want I’d had these supplies once I wrote the guide, however they don’t materially change the arc of the story.

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