Elizabeth Holmes, Founder and Former CEO of Theranos, arrives for the application hearing in the U.S. District Courthouse in the Robert F. Peckham Federal Building in San Jose, California on Monday, November 4, 2019.
Yichuan Cao | NurPhoto | Getty Images
SAN JOSE, CALIF. – A representative from Betsy DeVos ‘family office told jurors at Elizabeth Holmes’ criminal trial that the former Theranos CEO presented misleading financial data and details about the company’s technology when soliciting an investment.
DeVos, the former Secretary of Education in the Trump administration, invested $ 100 million in Theranos in 2014. Lisa Peterson, the private equity investor at RDV Corp. monitored and handled the Theranos deal, testified on Tuesday on behalf of the family.
Peterson said that Holmes “selected five or six private families to invest in their company” and “invites us to take part in this opportunity.”
She told the jury that Theranos shared financial guidance, which showed the company would have sales of $ 140 million in 2014 and $ 990 million in 2015. Peterson said she didn’t know Theranos had no income in 2012 and 2013.
Holmes also said the blood tests were processed using Theranos’ in-house technology, when in reality the company is using third-party systems.
Investors put more than $ 900 million in total in Theranos, a bustling blood testing startup led by a charismatic Stanford dropout who promised to change the future of healthcare. In addition to DeVos, the Atlanta media tycoon Rupert Murdoch, the Walton family, and the Cox family all invested money.
Holmes is on trial on charges of misleading investors, patients and doctors regarding the capabilities of Theranos’ blood testing technology. Holmes and her co-conspirator and company boss Ramesh “Sunny” Balwani face up to 20 years in prison if convicted. Both pleaded not guilty and Balwani will be tried separately next year.
Peterson said she was asked to work on the Theranos deal because she had prior healthcare experience and “it fascinated” her. The DeVos family planned to invest $ 50 million in Theranos, but Peterson told jurors that they had decided to double their investment after meeting Holmes.
Peterson said she initially thought “this was going to be a game changer for healthcare”.
Holmes’ false statements didn’t stop after the investment, Peterson said. For the first time in the trial, the jury was shown video footage of Holmes when prosecutors played three clips of their 2015 interview on CNBC’s Mad Money.
In the interview, Holmes defended her work and Theranos defended her after a Wall Street Journal investigation into the technology’s flaws. Holmes said on a viral clip to CNBC’s Jim Cramer, “This is what happens when you’re working to change things and first they think you’re crazy, then they fight you, and then suddenly you change the world.”
Prosecutors also played an April 2016 interview on The Today Show in which Holmes Maria Shriver said she was “devastated that we did not identify and fix these issues any sooner”. Later in the clip, Holmes said, “Everything that happens in this company is my responsibility at the end of the day.”
Peterson testified that she and Dan Mosley, another Theranos investor, met after this interview with Holmes and other employees in Palo Alto to ask, “What’s wrong?” According to Peterson, it was her first meeting with Holmes since investing.
“[Holmes] “We downplayed what happened in the press a lot,” said Peterson. “Much of the correspondence we had received from the company played down what we saw on the news.”
Regardless, federal prosecutors in the trial renewed their fight to prevent jury questionnaires from being unsealed, as they believed the majority of jurors had raised concerns about the matter.
Several media outlets, including CNBC’s parent company NBCUniversal, are asking the judge to release the jury’s questionnaires prior to trial, which include information about their media exposure, views on issues such as health care and investment, and their religious beliefs.
“During the interviews, all but two of the jurors expressed some level of concern about the privacy or safety of their family or family, or said that having certain information included in their completed questionnaires would cause personal embarrassment,” the government said.
Holmes now wants to block the publication of the jury questionnaires and thus changes her previously neutral stance on this topic.
“Disclosure would distract the jurors and expose them to outside information and influence, and the prospect of post-sentence harassment would affect their decision-making in the case,” Holmes’ attorneys wrote on the file.
In early October, the court interviewed all jurors and junior jurors about possible concerns about the disclosure of personal information.
“Mrs Holmes is concerned that this issue has marred this process,” a file said. Her lawyers added that the jury “may not be able to fairly judge Ms. Holmes’ innocence or guilt”.
The twelve-person jury that decides on Holmes’ fate consists of eight men and four women. There are two alternative jurors.