Elizabeth Holmes admits she gave false information to journalists for Theranos story
SAN JOSE, CALIF. – Theranos founder Elizabeth Holmes admitted Tuesday that she gave false information to a journalist for a long profile she used to woo investors.
After the cross-examination was completed, Holmes stood in her own defense for a sixth day and was interviewed by Federal Attorney Robert Leach about the 2014 Fortune cover story “This CEO Is Out For Blood” by Roger Parloff.
Leach showed the jury part of Parloff’s feature story about Holmes, in which she appears in her signature black turtleneck: “It currently offers more than 200 – and is expanding to more than 1,000 – of the most frequently ordered blood tests, all without the need a syringe. “
“Do you agree that this was a false statement?” asked Leach.
“I think so now,” said Holmes.
Prosecutors allege Holmes used the Fortune article to attract investors, including in presentations and folders.
“You don’t remember forwarding the Parloff article to investors or potential investors?” asked Leach.
“Not me,” said Holmes.
“Let’s refresh your memory,” Leach said, showing the jury an email that Holmes received on Jan.
“I think I could have handled these communications differently,” Holmes told the jury.
Holmes, once a Silicon Valley darling who raised over $ 945 million from luminaries like Rupert Murdoch and Don Lucas, faces 11 fraud charges and up to 20 years in prison if convicted. Prosecutors say Holmes was involved in a decade-long plan to deceive investors and patients about their company’s blood testing technology. She pleaded not guilty.
For two days, prosecutors cross-examined Holmes over inconsistencies in their statements to investors, business partners and employees.
The testimony on Tuesday also covered the alleged use of the Theranos devices by the US military.
Several witnesses, including former Safeway CEO Steve Burd and Lisa Peterson, who represented the DeVos family as Theranos investors, testified that Holmes told them the technology was being used by the US military in the Middle East.
But on the stand, Holmes admitted that the Theranos device was never used on the battlefield.
Holmes also admitted that her then-deputy and friend, Ramesh “Sunny” Balwani, had not told her or the investors that Theranos devices were used in Medevac helicopters or on the battlefield.
Leach also asked Holmes about a sales forecast of nearly $ 1 billion for 2015 when the internal estimate was much lower. Holmes testified the number was from a financial model, but she didn’t think she had given the estimate to investors.
The document also showed projected sales of $ 40 million from drug companies, but Holmes said the company had no contracts with drug companies at the time.
“You can’t identify a single pharmaceutical contract,” Leach said. “You had no income from pharmaceutical companies in 2014?”
“We didn’t do that,” Holmes told the jury.
In her testimony, Holmes said that Balwani was responsible for certain parts of the company, including financial projections.
“You knew that you were ultimately responsible for Theranos’ financial condition?” asked Leach.
“I have,” said Holmes.
Your testimony will continue on Wednesday. After three months of the blockbuster trial, the defense is expected to withdraw its lawsuit this week.