Prospective Elizabeth Holmes juror is disqualified after she was bombarded with texts and news stories by friend who worked out she was being considered for case: Jury selection enters day two
Jury selection continued Wednesday at the San Jose federal courthouse for the highly anticipated fraud trial of disgraced former tech CEO Elizabeth Holmes.
Among the potential jurors interviewed included one whose friend discovered which case she had been assigned to, and began bombarding her with texts and links to news stories.
Another, rejected, candidate said she works at Safeway, which is a victim in the case.
Another said their mother-in-law had gone to prison for embezzlement, according to a New York Times reporter covering the trial.
Among the original pool of 200, 41 prospective jurors remained after eight hours of questioning, from which a 12-person panel with five alternates is expected to be finalized Thursday.
Holmes stands accused of ten counts of wire fraud and two counts of conspiracy to commit wire fraud across two separate schemes: one to defraud investors, the other to defraud doctors and patients.
Prosecutors say she misled them as CEO of the now-defunct blood testing firm Theranos.
She has pleaded not guilty.
Jury selection entered day two on Wednesday in the fraud trial of disgraced ex-Theranos CEO Elizabeth Holmes. Holmes is seen Tuesday at the San Jose federal courthouse
Holmes is accused of a dozen counts of wire fraud from allegations that she misled investors, patients and doctors as head of the now-defunct blood testing firm Theranos
Opening statements are set to begin on September 8, and the trial is expected to last 13 weeks.
The topic of domestic abuse was discussed with the jurors Wednesday, CNBC reported.
On Saturday, Holmes' attorneys gave the first indication of the defense they plan to mount.
They are alleging that she was the victim of 'intimate partner abuse,' perpetrated by former boyfriend Ramesh 'Sunny' Balwani, and that as a result she suffered from a 'mental condition, disease or defect' that left her unable to form any intent to defraud.
Balwani, the former president Theranos, will be tried on the same charges separately.
He has also pleaded not guilty.
Holmes stood in awkward silence as photographers and reporters gathered around her outside the courthouse Tuesday
She dressed in simple navy sheath dress and blazer with her blonde hair softly styled, ditching her signature black turtleneck
District Court Judge Edward Davila, who is overseeing the case asked the jurors if they had personally experienced domestic abuse, and more than a dozen raised their hands.
Many shared their personal tales to the courtroom.
Other dismissed jurors included teachers who claimed hardship that their schools were understaffed, and several more who appeared to express bias based on their prior knowledge of Holmes.
Another potential juror said she had seen online memes about Holmes relating to a 'voice thing,' CNBC reported.
Holmes has been accused of lowering her voice to sound more authoritative.
'People speak differently to different people so I don’t really find that as anything to sway my opinion,' she told the court.
Covid and alleged media bias from the intense publicity that has surrounded this case since Holmes was indicted in 2018 dominated the discussions in court both during and ahead of this week's proceedings.
On Tuesday, nine of the 200 potential jurors summoned were immediately released on the grounds that they were unvaccinated.
A further 27 jurors were dismissed ahead of Tuesday's hearing with the agreement of both prosecution and defense.
The dismissals were based on multiple grounds including ill health, financial hardship, travel and bias.
Federal prosecutors allege that she along with her ex boyfriend and COO Ramesh. 'Sunny' Balwani (pictured) defrauded investors of $700million with misleading claims about Theranos's blood testing technology
Holmes’s lead attorney, Kevin Downey, raised the concern that several of the potential jurors had admitted to having been ‘exposed to substantial negative media’ and ‘expressed a concern that they may have a bias’ in the questionnaires completed ahead of today’s selection.
Many potential jurors admitted Tuesday that they had read articles, seen one of the several documentaries on the case or read the book by John Carreyrou, the journalist who broke the scandal for the Wall Street Journal in 2015.
Holmes, 37, sat, flanked by three of her legal team, occasionally looking at the potential jurors, occasionally taking notes.
A panel of 38 jurors was brought to the court shortly after 9am Tuesday in a bid to seat 12 jurors and five alternates.
Jury deliberations are scheduled to begin in early December.
Prosecutors allege that Holmes knowingly misrepresented the capacity of Theranos's proprietary blood testing technology to bilk investors out of millions of dollars.
If convicted she faces a maximum sentence of 20 years in prison and a $250,000 fine on each count, as well as a possible order to pay restitution to those allegedly defrauded.
Holmes's trial, already delayed due to Covid 19, was to have started last month. But her announcement that she was pregnant saw it pushed back once more. She gave birth on July 10.
A quiet room will be available for her and the baby during the trial.
At its peak Theranos had a staff of more than 800 and a valuation of $9 billion.
In the end there were barely two dozen who loyally stayed on through the maelstrom of public exposure that saw Theranos's two most senior executives slapped with federal charges and the company's value plummet to less than zero.
Holmes founded the company in 2003 when she was just 19 and built it on the bold promise of possessing proprietary technology that would revolutionize medical testing through innovative methods of drawing and testing blood.
As set down in the lengthy federal indictment this was Theranos Inc's 'stated mission.'
Instead of drawing vials of blood from an arm vein for traditional analysis Holmes claimed that their technology required only a drop of capillary blood.
This blood would be collected from a finger stick and stored in a 'nanotainer,' which would then be placed in a machine she named the Edison or 'miniLab' for analysis. Instead of waiting days or weeks, patients could get results within hours and at a fraction of the cost of traditional testing.
In 2013, after a decade of operating on what she called 'stealth mode,' Holmes went public with her claims and investors poured hundreds of millions into the company buoyed by saucer-eyed, tousle-haired Holmes's assertions that it worked; it really worked.
Her messianic fervor was such that she converted two former secretaries of state – George Shultz and Henry Kissinger – into enthusiastic believers and board members.
The roster of investors included the Waltons, heirs to Walmart founder Sam Walton, billionaire and media tycoon Rupert Murdoch and the family of former Secretary for Education Betsy DeVos, all of whom invested $100million or more.
Holmes is charged with a dozen counts of wire fraud and conspiracy to commit wire fraud as CEO and founder of the defunct blood-testing firm Theranos
Prosecutors allege that she knowingly misrepresented the capacity of Theranos proprietary blood testing technology to bilk investors out of millions in the process
In September 2013 Theranos signed a multi-million-dollar deal with Walgreens to roll out a series of so-called 'Wellness Centers,' in the pharmacy giant's retail locations.
The company's advertisements claimed that patients could order their own tests and access safe, swift, reliable tests that required only a drop of blood thanks to Theranos's new technology.
According to Holmes, Theranos would break even in 2014 with a projected turnover of $100million. The following year it would generate $1billion.
Holmes was featured on the cover of Fortune and a host of business publications. She was invited to address conferences and governments – once sitting down with the president of Brazil to discuss the future of affordable testing and diagnostics.
With her penchant for wearing only black turtlenecks and pantsuits and her soaring success Holmes drew comparisons with Steve Jobs.
Her success was rapid and her story compelling; the 19-year-old Stanford drop-out, dominating Silicon Valley with not a business nor science qualification to her name. It all seemed too good to be true.
And according to the federal indictment it was.
Theranos's implosion began with a 2015 Wall Street Journal article in which a whistleblower revealed Theranos's technology to be beset by issues that meant that only a very few of the 240 tests the company offered were actually analyzed using it at all.
The majority were processed by third parties on already existing technology made by firms such as Siemens.
Tyler Shultz, the grandson of former secretary of state and Theranos board member George Shultz, spoke to the WSJ and appeared in HBO's documentary, 'The Inventor.'
Shultz was initially impressed and inspired by Holmes's pitch and charisma, so much so that he asked if he could intern with the company for a summer.
But speaking on the documentary Shultz explained that he quickly began to see a disparity between the 'carpeted world and the tiled world' in Theranos.
Jury selection is expected to take two-to-three days with opening statements set to begin on September 8
Holmes has pleaded not guilty and faces a possible prison sentence of 20 years
Holmes's legal team are seen arriving at federal court in San Jose, California, on Tuesday
The 'carpeted world' was the sleek corporate domain in which Holmes moved with authority and conviction.
The 'tiled world' were the laboratories below where lab technicians and assistants battled with machines that were failing, data that was compromised and a gulf between promise and delivery that was growing day by day.
Shultz explained, 'I was running precision testing for syphilis and there was a lot of variability in the test, but Theranos was saying, 'This is safe to use in real patients,' and I was kind of blown away.
'If 100 people with syphilis came and got tested on the Theranos devices we would only tell 65 people they had syphilis and we would tell the other 35, 'You're healthy, no need for medication.'
He concluded, 'If people are testing for syphilis using Theranos there's going to be a lot more syphilis in this world.'
When the WSJ article appeared, Holmes came out fighting. She lambasted journalist Carreyrou's work as 'lies' and went on CNBC to give an interview in which said, 'This is what happens when you work to change things. First, they think you're crazy, then they fight you, and then all of a sudden you change the world.'
But Holmes didn't change the world. Instead, 'all of a sudden,' the house of cards that she and Balwani had built came tumbling down.
Walgreens executives started expressing concerns about Theranos's performance at their 'Wellness Centers.'
Next the Food and Drug Administration told Theranos it required clearance or approval of the analyzer and tests. According to her indictment Holmes told investors that this approval was not necessary and claimed they were only applying for it as the 'gold standard.'
Boxes for the defense of Elizabeth Holmes are seen on the first day of jury selection, outside Federal Court in San Jose Tuesday
Other frauds alleged in the federal indictment include the claim that Holmes told investors that Theranos had several lucrative contracts with the United States Department of Defense and that the company's technology was being used on battlefields.
In reality, the contracts provided only a limited revenue stream and Theranos technology was never deployed in the field.
The docket for the hotly anticipated trial already runs to nearly 1,000 filings as Holmes's team of 11 top-shelf lawyers have fought to have myriad documents sealed and testimony excluded.
A recent bid to bar former patients from testifying failed.
As far as her defense goes there are other options beyond the allegations that she was suffering the trauma of an abusive relationship and unduly influenced by Balwani.
She could make an eleventh-hour plea deal and promise to co-operate with prosecutors in Balwani's case, or she could simply claim that she had good intentions.
If the jury can be convinced that Holmes was a true believer in the efficacy of her product then they cannot find her guilty of knowingly misleading anyone.
Instead, she would be the victim; an idealist who bought into the Silicon Valley culture of 'fake it till you make it' a little too much and whose only 'crime' was an excess of optimism.
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