Elizabeth Holmes, Silicon Valley’s most famous prisoner, launches long-term appeal

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Lawyers for Elizabeth Holmes, the convicted Silicon Valley con artist, presented her appeal in a California court Tuesday, revisiting a case that exposed the flaws in the tech world’s startup culture, faking until what you achieve.

Holmes was sentenced to 11 years in prison for defrauding investors in her bankrupt blood testing company, Theranos. She is seeking a new trial, arguing that the judge overseeing her case made errors in several rulings during the 2022 proceedings.

Holmes is serving his sentence at a minimum-security facility in South Texas and, like most of the defendants, did not appear in court when California’s Ninth Circuit heard his appeal. Since his conviction, his scheduled release date from prison has been brought forward, reducing his sentence by approximately two years.

It was key for the government to convince jurors that Theranos’ founder not only knew her company’s technology was flawed, but went to great lengths to hide it from investors. In their appeal, defense attorneys focused on what they see as the court’s violation of the rules of evidence regarding one of the prosecution’s key witnesses.

In pushing back, prosecutors said Tuesday that the lower court did not err in its handling of the case and that “if there were any trial errors, they were harmless given the overwhelming evidence and multifaceted against Holmes”.

A decision on the appeal was not expected immediately. Legal experts said the three judges would likely take into account the high-profile nature of the case and that it could take them several weeks, or even months, to issue a ruling.

Over the past decade, the story of Theranos — valued at $10 billion at its peak — has become a cautionary tale of tech startup hubris and hype.

He had all the hallmarks of a Silicon Valley juggernaut: a 19-year-old founder who dropped out of Stanford and dressed like Steve Jobs, a daring mission to disrupt the medical establishment and a lot buzz among deep-pocketed investors such as Larry Ellison and Rupert Murdoch.

The principle was simple: A single drop of blood, filtered through Theranos’ proprietary machine, could provide faster and more accurate results than traditional tests that required entire vials drawn from a patient’s veins.

The problem is that the technology never really worked, as a Wall Street Journal investigation revealed in a series of articles in 2015. The Theranos breakup, and Holmes herself, were the subject of a bestselling book, a Hulu scripted series, and an award-winning film. documentary.

Federal prosecutors in 2018 charged Holmes and his former partner, Ramesh “Sunny” Balwani, with running a multimillion-dollar scheme to defraud investors, doctors and patients. A jury ultimately found her guilty of four counts of investor fraud, but not guilty of counts related to patient fraud.

Holmes knowingly covered up problems with the technology and still insisted that the company’s Edison devices be introduced into pharmacies, prosecutors argued.

“Holmes repeatedly told potential investors that major pharmaceutical companies had validated Theranos’ device and that the U.S. military was using it on the battlefield to treat wounded soldiers,” government lawyers said in a filing. criminal record. “In truth, Theranos’ device could never perform more than 12 types of blood tests, often with less precision, less automation and less consistency” than conventional methods. And these devices have never been used in war zones.

Balwani was separately convicted and sentenced to 13 years in prison.

Prosecutors sought to highlight the real-world implications of Holmes and Balwani’s lies to investors. In a filing with the appeals court, they note that a woman received test results from Theranos indicating “she was going to have a miscarriage even though she was carrying a healthy baby,” the statement said. case. “Another received results indicating he had advanced prostate cancer, when that was not the case. Another was told (wrongly) that she was HIV positive.

Holmes’ lawyers said in court papers that the criminal trial “is rife with appealable issues.”

Specifically, they focused on the testimony of Kingshuk Das, the former laboratory director of Theranos, who testified during the trial that he found many problems with the Edison machines and that he believed they were “unfit for clinical use”.

On Tuesday, Holmes’ lawyer said Das’ opinion on how the technology worked was a “classic expert opinion,” given by someone who was not selected as an expert witness in the case .

Holmes argued that Judge Edward Davila erred in his ruling that she could not refer to the testimony of Balwani, her former boyfriend and business partner, in her own defense. Her lawyers argued that prosecutors’ statements about Holmes’ relationship with Balwani “likely would have led to Ms. Holmes’ acquittal in a retrial.”

At Holmes’ trial, the government characterized the couple’s relationship as one between two equals, his lawyers said in a 2022 filing. Then, at Balwani’s trial, “the government took the opposite position and emphasized the ‘Mr Balwani’s age, experience and influence over Ms Holmes’.

Criminal appeals are always an uphill battle, and Holmes’ case is no exception.

“The issues raised by Holmes’ legal team…are all issues that are difficult to win on appeal – it’s difficult to win on issues when you’re on Monday morning overseeing the decisions made by the judge,” he said. said Agustin Orozco, a former federal prosecutor. and partner in the law firm of Crowell & Moring.

In prosecutors’ filings with the court, Orozco notes, they frequently raise a “harmless error” argument — essentially saying that even if the lower court made mistakes, “it doesn’t matter because the evidence is so overwhelming against Holmes.”