Technology

Protection tries to dam proof of wealth

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Theranos founder Elizabeth Holmes and her partner Billy Evans are leaving the Robert F. Peckham US Courthouse after making opening arguments at their trial on September 8, 2021 in San Jose, California.

Peter DaSilva | Reuters

When you hang out with celebrities and titans of society, you need good jewelry. And the former CEO of Theranos, Elizabeth Holmes, owned some of the best.

So when Holmes billed Theranos for a $ 2,000 item from a jewelry store, it wasn’t unusual. Besides the person who managed Theranos’ finances for over a decade, So Han Spivey, started asking questions.

Spivey, also known as Danise Yam, was the first witness named by the government on Wednesday in the Holmes fraud trial. According to a court file, Holmes’ attorneys are asking the judge to stop Spivey from testifying that Holmes used company funds in extravagant purchases.

Spivey worked at Theranos from 2006 to 2017. In a July interview with federal attorneys, she recalled asking Holmes about a $ 2,000 purchase from a jewelry store and why Theranos should pay for it, ”a court record said.

Holmes had a six-figure salary and a stake in her blood testing startup Theranos worth up to $ 4.5 billion. The details of her luxurious lifestyle and whether her wealth and benefits as CEO are relevant to the judges has been a contentious battle.

“Holmes would bill for the trip to Theranos to include flights on a private jet and Spivey would have to ask Holmes for permission to pay the private jet company,” the new filing reads. “Theranos would also pay Holmes ‘hotel bills, there was no budget for Holmes’ travel expenses at Theranos, in fact there was no budgeting at Theranos.”

Once celebrated as a billionaire on paper, Holmes was often chauffeured with a heavy security detail. Former employees remember that when she wasn’t chauffeured she drove her own car – the latest Range Rover.

Holmes stayed at luxury hotels and relied on several Theranos-paid assistants to carry out their lavish shopping sprees, including home decor, jewelry, clothing, and grocery shopping.

On Wednesday, the former CFO highlighted a period in 2009 when the company struggled to compile payrolls for sellers and “pick and choose” who to pay. Spivey testified that they took out a loan backed by Sunny Balwani, the former president of Theranos and at times Holmes’ friend.

In May, US District Court judge Edward Davila ruled that he would allow prosecutors to prove that Holmes led a lifestyle comparable to other CEOs in Silicon Valley. He softened the verdict by banning references to certain purchases and brands. Davila said he will consider the latest request during Spivey’s testimony, which continues Friday.

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