Tue. Jan 18th, 2022


SAN JOSE, Calif. — Taking a deep breath, Elizabeth Holmes briefly crumpled her face as she spoke, her voice breaking.

Ramesh Balwani, her former boyfriend and business partner, emotionally and physically abused her, Ms. Holmes testified in court on Monday. He was controlling, she said, prescribing the food she ate, dictating every minute of her schedule and keeping her away from her family. And he forced her to have sex with him against her will, she said.

“He would force me to have sex with him when I didn’t want to because he would say that he wanted me to know he still loved me,” Ms. Holmes said on the stand, while crying.

It was the most dramatic moment in a three-month trial, with Ms. Holmes accused of lying and faking her way into hundreds of millions of dollars for her failed blood testing start-up, Theranos. Since September, prosecutors have tried to show a jury that Ms. Holmes, who presented herself publicly as a wunderkind of business and technology, had misled investors, doctors and patients about the efficacy of Theranos’s blood testing technology.

She was indicted in 2018 alongside Mr. Balwani, who is known as Sunny, her secret boyfriend for more than a decade and the former chief operating officer of Theranos. Last year, Ms. Holmes’s lawyers successfully argued to split their fraud cases; Mr. Balwani will be tried next year. At her trial’s start, Judge Edward Davila of U.S. District Court for the Northern District of California, who is overseeing the case, instructed jurors not to speculate as to why Mr. Balwani was not present. Both have pleaded not guilty.

The trial has been held up as a parable of Silicon Valley hubris and “fake it till you make it” culture taken to a dangerous extreme. Few start-up founders who stretch the truth to raise money or secure business deals are ever charged with fraud. A guilty verdict could embolden regulators to further crack down on the tech industry at a moment when it has amassed enormous wealth and power. Ms. Holmes faces 20 years in prison if convicted.

With the new accusations about her relationship with Mr. Balwani, Ms. Holmes has potentially upended the narrative around her alleged wrongdoing and changed the jury’s perception of what happened. Thus far, her lawyers have painted Ms. Holmes as young, inexperienced and unqualified to run a research lab. They have only hinted at Mr. Balwani’s role in the fraud.

“Trusting and relying on Mr. Balwani as her primary adviser was one of her mistakes,” Lance Wade, Ms. Holmes’s lawyer, said in opening statements in September.

Mr. Balwani has denied all accusations of abuse. His lawyers did not immediately respond to a request for comment.

Ms. Holmes, on the stand for the fourth day in her trial, also testified that her comments about Theranos’s relationship with the military — which the start-up once said it had contracts with, even though it didn’t — had been misunderstood. She said she had not intended to mislead anyone during technology demonstrations or inspections. And she said that others were responsible for day-to-day management of Theranos’s lab.

But that was overshadowed by the details of her relationship, which she hid from the public while Theranos was on its fast-rising trajectory to a $9 billion valuation. Theranos collapsed in 2018 after a regulatory crackdown resulted in the company’s voiding two years of test results.

For months, trial-watchers have wondered whether Ms. Holmes would point fingers at Mr. Balwani as part of her defense, as her lawyers have hinted in filings that she might. They have also said they expect to call Mindy Mechanic, an expert witness who could testify about intimate partner abuse, to explain Ms. Holmes’s accusations.

Blaming her relationship with Mr. Balwani is a risky strategy that could backfire, said David M. Ring, a civil trial lawyer specializing in sexual assault and abuse cases.

“Elizabeth Holmes, up until today, has presented herself as the epitome of confidence — this spectacular, composed entrepreneur — and now all of a sudden she’s telling us, ‘I was the puppet and Sunny Balwani was the puppeteer,’” he said. But if the jury finds her account credible, “that’s going to go a long way to an acquittal.”

Ms. Holmes met Mr. Balwani when she was 18 on a trip she took to China through Stanford University. He is 20 years older than her. After Ms. Holmes dropped out to start Theranos in 2003, she contacted Mr. Balwani, who comforted her after she said that she had been raped while a student at Stanford.

“He said that I was safe now that I had met him,” Ms. Holmes said. They began living together and Mr. Balwani joined Theranos in 2009.

As Theranos grew, Ms. Holmes presented herself as confident and poised. But behind the scenes, she said, Mr. Balwani criticized and controlled her, pushing her to follow a strict daily regimen of prayers, tenets and green juice.

“He told me that I didn’t know what I was doing in business, that my convictions were wrong, that he was astonished by my mediocrity and that if I followed my instincts I was going to fail,” she said, pausing to wipe her nose as she teared up.

Mr. Balwani frequently told her to kill her old self and “become a new Elizabeth” to be successful in business, she said.

Notes taken by Ms. Holmes on her iPhone at the time backed up her account. One written after Mr. Balwani’s alleged assault said, “Don’t enjoy literally anything about it or who I am if I did it. Hurts so much. So so much.””

She moved out in 2016, she said, after an inspection from regulators revealed major problems in Theranos’s lab. Until that point, she said, she had believed Theranos’s technology worked. The inspection caused her to look at Mr. Balwani in a different light. “He wasn’t who I thought he was,” she said.

Introducing such a defense complicates prosecutors’ case against Ms. Holmes. Throughout the trial, they have tried tying the alleged fraud at Theranos to Ms. Holmes by showing emails and text messages in which she was informed of the company’s problems.

Former employees have testified that she was a hands-on leader who micromanaged things like marketing copy and took charge in meetings with investors and partners. In earlier testimony, Ms. Holmes conceded that she had personally added the logos of pharmaceutical companies to reports that she sent to investors without the permission of the drug makers.

Prosecutors also played a video of Ms. Holmes discussing the problems at Theranos in a TV interview. “I’m the founder and C.E.O. of this company,” she said. “Anything that happens in this company is my responsibility at the end of the day.”

But on Monday, Ms. Holmes depicted herself as a young woman manipulated by a controlling older boyfriend who claimed responsibility for her success.

“He impacted everything about who I was and I don’t fully understand that,” she said, stuttering on the word “I.”



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