Disgraced Theranos Founder Elizabeth Holmes Hopes to Keep ‘Wealth, Expenses, and Lifestyle’ Out of Upcoming Fraud Trial

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Elizabeth Holmes, Founder of Distressed Healthcare Technology, Calls on California Federal Judge to Bar Prosecutors From Including Evidence of Her “Wealth, Spending, and Lifestyle” in Their Case of suspected fraud linked to the billionaire’s missing company, Theranos, court papers show.

Holmes, through lawyers, argued in a petition filed Friday that presenting evidence of the alleged wealth of the now 36-year-old woman at her trial in 2021 “would confuse the issues and be a waste of considerable time ”, according to the court. documents submitted in the San Jose Division of the Northern District of California.

“This evidence is irrelevant to a question at trial and serves no purpose other than to prejudice the jury,” states the 12-page motion. “The government has no legitimate aim to offer this evidence. This has no bearing on whether Ms Holmes engaged in the alleged fraud schemes of which she is accused. Instead … [it] calls on jury to convict Ms Holmes on the basis of inappropriate emotional appeals.

The petition pointed to three “federal rules of evidence” arguing that such details of his life are “unfairly prejudicial”, are irrelevant and therefore not admissible. Holmes’ lawyers have called for such evidence to be excluded from January 22, 2021 and beyond.

Former Theranos CEO Elizabeth Holmes leaves after a hearing in federal court in San Jose, Calif., July 17, 2019. (REUTERS / Stephen Lam)

“The amount of money Ms. Holmes made in her post at Theranos, the way she chose to spend that money and the identity of the people she associated with just have nothing to do with guilt or the innocence of Mrs. Holmes, ”according to court documents. .

Despite being once considered the youngest female billionaire in the country, the motion describes how Holmes – former CEO of Theranos before the company’s bankruptcy – received only “modest” financial benefits compared to CEOs of other multi-billion dollar companies.

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“She took a lower salary than other Theranos executives,” the court documents say. “And, although she owns a significant stake in Theranos, she has never sold shares of the company – despite the opportunities to do so and contrary to what one would expect if she had the opportunity to do so. ‘intention to benefit from massive fraud.’

The government has already underlined its intention to present evidence showing that Holmes “obtained a personal advantage.[s]”Of his position at Theranos”, alleges the motion.

Elizabeth Holmes, CEO of Theranos, speaks on stage at the Glamor Women of the Year Awards, where she receives an award, in the Manhattan neighborhood of New York. November 9, 2015 (REUTERS / Carlo Allegri)

According to the government, these ‘benefits’ include company-funded’ luxury travel and accommodation ‘and a’ substantial salary ‘that would have enabled Ms Holmes to lead a’ luxury lifestyle ‘, including’ driving a Luxury SUV, rent a house and buy expensive goods, ”court documents say. “The government also alleged that Ms. Holmes ‘had asked her Theranos-paid assistants to do personal errands, perform personal chores, and purchase luxury goods.’

She rubbed shoulders with the rich, the famous and the powerful, was the subject of several publications and was “the beneficiary[y] of strengthening local and national reputation “because of its affiliation with Theranos, the motion alleges the government said.

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Forbes reported in 2015 that Holmes boasted an estimated net worth of $ 4.5 billion. As allegations of wrongdoing emerged over the next year, his reported net worth fell by nearly $ 1 billion and is expected to have fallen since.

Prosecutors allege that Holmes and former COO Ramesh “Sunny” Balwani deliberately misled investors, policymakers and the public about the accuracy of Theranos’ blood testing technologies.

Sunny Balwani, former president and chief operating officer of Theranos Inc., arrives at federal court in San Jose, California, United States, Wednesday, October 2, 2019 (Michael Short / Bloomberg via Getty Images)

Both pleaded not guilty to wire fraud and conspiracy to commit wire fraud. If found guilty, they could each face maximum sentences of 20 years in prison, a fine of $ 2.75 million and possible restitution, the Justice Department said.

Holmes, a Stanford University dropout once touted as the ‘next Steve Jobs’, lost control of the blood testing startup in 2018, when she agreed to pay $ 500,000 to settle the charges. accusations that she oversaw “massive fraud”.

Under an agreement with the Securities and Exchange Commission at the time, Holmes was barred from serving as an officer or director of a public company for 10 years.

Two years earlier, the SEC, following a Wall Street Journal investigation, began investigating Theranos’ claims about its potentially revolutionary blood testing technology.

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The Journal cited former employees who suspected the technology was a fraud, and found that the company used routine blood testing equipment for the vast majority of its tests. The story raised concerns about the accuracy of Theranos’ blood testing technology, which put patients at risk of having conditions misdiagnosed or ignored.

Holmes founded Theranos in Palo Alto, Calif., In 2003, showcasing the company’s technology as a cheaper way to perform dozens of blood tests. She said she was inspired to start the business in response to her fear of needles.

Theranos has raised millions in seed money by promoting its tests as costing a “fraction” of what other labs charge.

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After the Journal’s investigation, Theranos and Holmes fought back and refused for months to acknowledge that his machines were indeed a sham. State and federal authorities have launched investigations into the accuracy of the company’s blood tests. In 2016, the Centers for Medicare and Medicaid Services, which oversee blood testing labs in the United States, banned Holmes from operating a lab and revoked Theranos’ blood testing license.

At the end of 2016, Theranos began closing its clinical laboratories and wellness centers and laid off more than 40% of its full-time employees. The company reportedly ceased operations in September 2018, months after Holmes stepped down as chief executive.

The trial is expected to begin in March 2021.

The Associated Press contributed to this report.

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