- Prosecutors on Friday rested their case in the fraud trial of Elizabeth Holmes.
- Jurors heard testimony from 29 witnesses over 11 weeks.
- The government's final witness was journalist Roger Parloff, who wrote a 2014 cover story on Holmes in Fortune magazine.
SAN JOSE, CALIF. -- The prosecution on Friday rested its case against former Theranos CEO Elizabeth Holmes in her criminal fraud trial after calling 29 witnesses over 11 weeks.
Ex-lab directors took the stand, as did former Secretary of Defense James Mattis, who was a Theranos board member. Jurors also heard testimony from patients, doctors, investors and business partners.
The government's final witness, on Thursday, was journalist Roger Parloff, who wrote the 2014 Fortune magazine cover story, "This CEO Is Out For Blood," profiling Holmes. Prosecutors claimed the Theranos founder used the article to woo investors, who piled into the blood-testing company, eventually valuing it at $9 billion.
Holmes, 37, pleaded not guilty to 11 counts of wire fraud and conspiracy to commit wire fraud. One of the counts related to a patient was dropped Friday. The Stanford University dropout and former Silicon Valley wunderkind could spend up to two decades in prison if she's convicted. She's denied any wrongdoing.
Now that the government has rested, the focus moves to Holmes' defense, which is set to begin immediately. Jurors have heard Holmes' voice several times, including on Thursday, as conversations were played aloud from Parloff's recordings.
But they've yet to hear directly from Holmes, and the central question now is if they ever will.
"She's a very risky person to have testify," said Danny Cevallos, an NBC News legal analyst who's been tracking the case. "Yes, she's very smart. But there's a lot of prosecution evidence that she can be cross-examined about that she probably won't have a good answer for."
Holmes was viewed as the undisputed leader of Theranos from her founding of the company in 2003 until until its collapse 15 years later. However, in documents released before the trial began, the defense blamed Holmes' ex-boyfriend and former business partner, Ramesh "Sunny" Balwani, for a decade of abuse and control over her.
Defense lawyers continued that line of attack during witness cross-examinations, claiming that Holmes placed blind faith in Balwani and put too much trust in her lab directors.
Cevallos said the defense faces the challenge of showing that Holmes wasn't always the one in charge and that she didn't intentionally mislead investors and patients.
"The defense has to contend with really undisputed facts that Holmes was the boss and that this technology didn't work," Cevallos said. "It's a tough sell. The government has emails, text messages and all kinds of documents. The government showed that the buck stopped with Elizabeth Holmes. The defense will try to show that it only did with some things, but not all things."
Balwani has also been criminally charged for fraud and will face a trial at a later date.
An assistant U.S. attorney said late Thursday, after jurors had left the courtroom, that if the defense begins its case on Friday, it would likely call to the stand "a paralegal from the Williams & Connolly law firm, who is going to serve as a summary witness."
'A liar and a cheat'
Over the past 11 weeks, prosecutors painted Holmes as a manipulative fraudster who duped patients and investors by making false claims about her company's technology, which she said could run a battery of blood tests from a finger prick.
Robert Leach, an assistant U.S. attorney, repeatedly called Holmes "a liar and a cheat," first in his opening statements and then through first-hand witness accounts.
The most high-profile witness was Mattis, who told jurors in September that, as a Theranos board member, he'd been misinformed about the capabilities of the company's technology.
"Looking back now I'm disappointed at the level of transparency from Ms. Holmes," Mattis testified, adding "we were being deprived of fundamental issues." The retired four-star general said he invested $85,000 of his own money into the start-up.
There "came a point when I didn't know what to believe about Theranos anymore," he said.
Multiple company insiders, including whistleblower and former lab assistant Erika Cheung, testified that Theranos' devices couldn't run more than 12 different tests, which contradicted the company's pronouncements. Holmes had told prospective investors and others that Theranos' proprietary technology could run 1,000 blood tests.
Prosecutors said Holmes also deceived investors by using unauthorized due diligence reports from leading drugmakers like Pfizer and Schering-Plough, whose company logos were on the documents.
Wade Miquelon, former chief financial officer of Walgreens, was one of numerous executives who received a report with the unauthorized logos. Walgreens, a key Theranos partner, poured $140 million into the company as part of a deal to put the blood-testing devices inside its stores.
The partnership crumbled after Theranos repeatedly missed its deadlines. Walgreens sued the company in 2016 alleging breach of contract.
The logo mystery deepened when jurors heard from Dr. Shane Weber, a scientist at Pfizer who evaluated the blood-testing technology in 2008 and concluded the pharmaceutical company shouldn't pursue a deal with Theranos.
Jurors were shown a Theranos report that Holmes had sent to Walgreens with the Pfizer logo on it. Weber testified that Pfizer never approved use of the logo.
There were plenty of opportunities for Holmes to listen to her underlings, who were continuously raising concerns. But prosecutors hammered home the idea that Holmes' "fake it 'til you make it" strategy cost lives.
Former lab director Adam Rosendorff, whose testimony lasted six days, told jurors that Holmes and Balwani ignored his repeated warnings that the technology simply didn't work. Instead, he said the executives prioritized the company's finances and public image over the health of patients.
Kingshuk Das, the company's final lab director, said he also warned Holmes that the technology was unreliable. Das testified that he voided 50,000 to 60,000 tests taken using Theranos' Edison blood-testing device and told Holmes it was "not performing from the very beginning."
Both Rosendorff and Das said Holmes dismissed their concerns.
From billionaire to nothing
Holmes was once named by Forbes as America's richest self-made woman, with an estimated net worth of $4.5 billion in 2015. The next year, following a series of stories from the Wall Street Journal exposing Theranos' deficiencies and misleading claims, Forbes lowered Holmes' worth to "nothing."
By that point, the company had reeled in more than $940 million from investors.
Jurors heard from a handful of those wealthy backers, who said they invested in the company based on Holmes' lofty promises. Witnesses included a representative of former Education Secretary Betsy DeVos' family. Bryan Tolbert, whose firm invested $5 million, and Alan Eisenman, an investor from Texas, also testified.
Finally came Brian Grossman, whose firm, PFM Health Sciences, invested $96 million in Theranos. Grossman said he was deceived by Holmes, even though he did extensive due diligence on the company and even got his blood drawn at a Walgreens.
Grossman told jurors that Theranos claimed the technology was validated by major pharmaceutical companies and by the Department of Defense, which used it on the battlefield and medevac helicopters.
"What better application for a technology like this than in a military setting under harsh conditions like one would expect in a place like Afghanistan or Iraq?" Grossman said. Theranos indicated it had "something over $200 million in revenue from the Department of Defense," he added.
None of it was true.
Rather, despite Holmes' rosy financial projections, the company was bleeding cash by the hundreds of millions of dollars, according to testimony from former finance chief San Ho Spivey, who also goes by Danise Yam. By 2015, Theranos had lost more than $585 million, Yam told jurors.
Prosecutors also pointed to a document given to investors that projected revenue for 2014 of $140 million and for 2015 of $990 million. Yam said she didn't prepare the document.
The jury heard additional testimony from three patients. Each detailed alarming stories about receiving inaccurate results after taking a Theranos test.
Erin Tompkins, one of those patients, said she was sent into a panic when her results showed she'd tested positive for HIV antibodies. The test was wrong.
"I was quite emotional at the time," Tompkins said.