Prosecutors claim Theranos fraud fueled Elizabeth Holmes lifestyle

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Billionaire Elizabeth Holmes, Founder and CEO of Theranos Inc., left, and Christian Holmes arrive at a State Dinner hosted by US President Barack Obama and US First Lady Michelle Obama in honor of Japanese Prime Minister Shinzo Abe at the White House in Washington, DC, the United States, on Tuesday, April 28, 2015.
Andrew Harrer | Bloomberg | Getty Images
Prosecutors paint a picture of what the public saw: a billionaire entrepreneur who donned designer labels with her black turtlenecks while hanging out with world leaders.
But like the Carnival Hall of Mirrors, according to the government, it was all an illusion.

Elizabeth Holmes intended to use Theranos “as a tool to improve her personal situation,” prosecutors wrote in a motion with the court Friday night.

“The causal link between the defendant’s fraud and the benefits involved is strong,” the government said.

Holmes and his COO, Ramesh “Sunny” Balwani, each face a dozen criminal fraud charges and if found guilty they could spend up to 20 years in prison.

As CEO of Theranos, prosecutors said Holmes lived an extravagant lifestyle, which included “private jet trips, stays in luxury hotels, and access to multiple assistants.”

“Although the defendant’s assistant was an employee of the company, she handled a range of non-commercial tasks for the defendant, including personal clothing and jewelry, home decorating, purchasing food and shopping. ‘groceries, and other items,’ the government said in a filing.

The government’s motion was a response to efforts by Holmes’ lawyers to block the jury from hearing details about his jet-set lifestyle.

The government intends to show evidence that the alleged fraud at Theranos was directly linked to the money and fame Holmes gained as CEO of Theranos.

Prosecutors wrote that Holmes was “the object of admiration in the local and national business community and has appeared in numerous publications and on television.” She has partnered with influential figures, including politicians and business leaders. The evidence at trial will show that these benefits were significant for the accused. , who closely followed daily news to cultivate its image. ”

Holmes was a Silicon Valley darling who attracted more than $ 700 million in investor funds.

“Besides the tangible benefits she reaped from her fraud, she also received great favorable attention from the media, business leaders and dignitaries,” prosecutors wrote.

The motion comes on the same evening that Holmes’ lawyers say his bankrupt company was no different from any other Silicon Valley startup trying to make a name for itself.

The government is “asking for an ordinance prohibiting the defense from focusing on the culture of Silicon Valley start-ups, arguing that founders in this area frequently use hype and dramatic promises to garner the attention needed to their businesses and attracting capital, ”Holmes attorneys said.

His lawyers argue that evidence related to the culture of Silicon Valley start-ups may be relevant to the case: “For example, the government intends to present evidence of certain practices that the government says have created a culture of “secrecy” in Theranos, allegedly to show that Ms. Holmes was hiding suspected fraud. ”

“Although Ms. Holmes decided to exclude such evidence, if admitted, Ms. Holmes could surely present evidence that other Silicon Valley start-ups have used similar practices and that the people at Theranos were at current of these practices. ”

Holmes will face his fate in July. In her appearances on Zoom, she has appeared brooding at times, a stark contrast to the image she once projected into the world.

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