Ex-Theranos CEO Elizabeth Holmes has set out to prove that the lure of wealth and fame did not lead her to commit fraud with her now-defunct blood-testing company.
Attorneys for Holmes filed dozens of briefs this week seeking to refute prosecutors’ claims that Holmes’ desire for recognition and wealth allegedly motivated her to lie about the capabilities of Theranos’ technology to detect disease through one drop of blood.
In a motion filed Jan. 8, prosecutors said that Holmes having allegedly “gained a variety of tangible and intangible benefits from the fraud tends to show that she intended to defraud in order to obtain those benefits. Similarly, Defendant’s desire to retain her wealth and status created a powerful motive for defendant to continue and conceal her fraud.”
Holmes’ lawyers have now fired back, claiming federal prosecutors are trying to “inflame the jury improperly by suggesting that irrelevant evidence concerning Ms. Holmes’ income, wardrobe, and travel itineraries gave her a motive to commit a federal crime.” The government’s arguments are irrelevant and risk “invoking class prejudice,” they added.
Holmes’ defense team also claims prosecutors are trying to prey on jurors’ gender biases by focusing on Holmes’ “purchase of expensive clothing, makeup and self-care products” and her travel budget, which they said Holmes needed for work just like other CEOs.
Theranos’ stock soared as a result of Holmes’ exaggeration of the company’s achievements, with a valuation in the billions at one point, according to prosecutors. The business community both in California and across the country came to admire Holmes, who enjoyed numerous profiles in publications and TV appearances. Holmes closely monitored daily news to cultivate her image. Forbes in 2015 even recognized Holmes as America’s richest self-made woman based on Theranos’ multibillion-dollar valuation at the time.
Investigative reporting, though, soon dismantled the claims Holmes was making about Theranos’ technology, raising questions about whether she and others had misled investors. The downward spiral culminated in the 2018 shutdown of the company, with the SEC criminally charging Holmes and former Theranos president Sunny Balwani over what it described as a “massive fraud.”
Balwani’s trial is expected to follow the Holmes trial.