The trial is being presided over by US District Judge Edward Davila,with a 12-member jury along with five alternate jurors.
Former Theranos executive Ramesh “Sunny” Balwani,scheduled to be tried separately,has also pleaded not guilty.
Former Theranos COO Ramesh “Sunny’ Balwani,pictured in 2019,will be tried separately.Credit:Getty Images
Leach told jurors the evidence will show that Holmes agreed with Balwani to carry out a scheme to defraud Theranos investors and patients,executed through a number of false and misleading claims.
In 2009,after losing interest from Pfizer and other pharmaceutical companies,Holmes turned to fraud,Leach said.
“Out of time and out of money,Elizabeth Holmes decided to lie,” Leach said.
Prosecutors have said Holmes and Balwani defrauded investors between 2010 and 2015 and deceived patients when the company began making its tests commercially available,including via a partnership with Walgreens.
Holmes “dazzled” companies such as the Walgreens drugstore chain,Safeway and other investors with false claims including suggesting that the company’s technology had been vetted by pharmaceutical companies,Leach said.
‘Repeatedly failing’
“It was not doing anything that could not be done in an ordinary central blood testing laboratory,” Leach said of Theranos.
On screens mounted in front of their seats,Leach showed jurors excerpts of a Theranos presentation to investors claiming its process provided the “highest levels of accuracy and precision”.
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In truth,Leach said,insiders knew the technology was “plagued by issues and repeatedly failing quality control”.
Leach laid out several ways in which Holmes allegedly defrauded investors,including by suggesting that the company’s miniature lab had been vetted by Pfizer,that its technology was being used by the US military in the field,and that it would achieve more than $US140 million in revenue by the end of 2014,which he called “nowhere near achieving”.
Court filings unsealed last month showed that Holmes,who had been in a romantic relationship with Balwani,has alleged that he abused her emotionally and psychologically. Balwani has denied the allegations.
Holmes’ attorneys have said in court papers she is “highly likely” to take the witness stand and testify about how the relationship affected her mental state. Defendants rarely testify at their own trials because it opens them up to potentially risky cross-examination by prosecutors.
A Stanford University dropout who started Theranos in 2003 at the age of 19,Holmes once grabbed headlines with her vision of a small machine that could run blood tests in stores and homes.
The Wall Street Journal in 2015 reported that the Theranos devices were flawed and inaccurate,setting off a downward spiral for a company that had drawn investors including media mogul Rupert Murdoch and Oracle co-founder Larry Ellison.
The saga has become the subject of documentaries,podcasts and books. A TV miniseries and a Hollywood film based on Holmes’ story are in the works.
The defence and prosecution have identified more than 140 potential witnesses in the case,including investors and former Theranos employees.
Reuters
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