Elizabeth Holmes trial: Theranos founder boasts about being ‘best business person’
The Theranos founder’s fraud trial has begun, revealing 600 pages of texts between her ex, who was also the chief operating officer at the blood testing company.
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Elizabeth Holmes, the disgraced founder of defunct blood-testing company Theranos, once called herself the “best business person of the year” in text messages to Ramesh “Sunny” Balwani, Holmes’ ex-boyfriend and former Theranos COO.
“My new life as of this night and forevermore: – total confidence in myself best business person of the year – focus – details excellence – don’t give what anyone thinks – engage employees in meetings by stories and making it about them (ie prepare well),” she wrote.
Holmes texted Balwani in November 2014 while discussing the full moon that evening, according to CNBC, which obtained the messages.
“No response?” she reportedly added ten minutes later, finally prompting a response from Balwani: “Awesome. U r listening and paying attention …”
The nearly 600 pages’ worth of private messages span from June 2011 to July 2016, according to CNBC, and provide insight into the luxurious lifestyle Holmes and Balwani led while they were allegedly bilking investors out of billions.
In a group text from April 2015, Holmes’ brother, Christian, reportedly texted her and Balwani about a planned trip to Las Vegas: “Not sure if these are options but from dan: presidential suite at four seasons $3k, mandarin apex suite view of strip $3400 or presidential $15k, or encore junior suite $700 view of a golf course.”
In other messages from the same month, Balwani appears to acknowledge the poor timing of the trip, which was slated for just as the company was losing employees and coming under scrutiny from the press.
“People would just disappear and they were leaving without jobs, it was clear the company was grounded to a halt,” a former Theranos employee told CNBC, speaking about the timing of the Vegas trip. “That’s a huge red flag.”
Balwani reportedly texted Holmes, “The Vegas trip is such a distraction. Bad timing. But the guys bought everything non-refundable. So we will do it. But then I don’t want distractions until we win.”
“Then let’s focus on it in our room, do dinner, and go back early,” Holmes replied. “I don’t like distractions ever.”
Holmes followed up with some luxurious options: “Dinner can try the three-star Michelin French in MGM – can just try all the ones that are top nationally rated and see what we get,” she reportedly wrote.
In another exchange, Balwani said “Got table at XS dance [floor],” according to CNBC. And a few minutes later, Balwani told Holmes “Getting private security for u.”
“Private security?” Holmes replied.
“One dedicated security guy with us all night.” Balwani said.
Holmes and Balwani dated while the two led Theranos. But they’ve since had a falling out, and Holmes’ lawyers have tried to point their fingers at Balwani, accusing him of manipulating Holmes and masterminding the whole fraud.
Both Holmes and Balwani have pleaded not guilty to two counts of conspiracy to commit wire fraud and 10 counts of wire fraud. They will be tried separately, with Balwani’s trial set to start next year.
Holmes, whose trial began earlier this month, could be sent to jail for 20 years if found guilty.
As she awaited the start of the trial, Holmes has been reportedly living with her partner Evans in a posh home on one of America’s most expensive estates.
Attorneys for the founder of Theranos — which was once valued north of $US9 billion — have told the Northern California judge overseeing the case that Holmes herself is “highly likely” to take the stand and defend herself.
High-profile investors and board members of Theranos, including former Secretary of State Henry Kissinger and Rupert Murdoch, the owner of New York Post parent company News Corp., may also be called on to testify, court documents suggest.
Jurors will also likely hear from Theranos patients, including one man who was misled to believe he had prostate cancer and two other patients who got false-positive HIV test results. However, the scope of their testimony must be limited to the fact that they were misled by the tests, and not the emotional impact.
Since founding Theranos in 2003, Holmes made lofty claims about the company’s machine, called “Edison,” that could quickly run dozens of tests for everything from diabetes to cancer with a pinprick of blood.
The convenience and speed of Edison devices, Holmes told potential investors, would disrupt the multibillion-dollar lab testing industry dominated by giants like Quest Diagnostics.
But the company never published peer-reviewed studies of its product and operated largely out of public view for years.
By 2010, the company nabbed a valuation of $US1 billion — before Theranos even had a website.
Holmes continued to use glowing press coverage and her lofty claims to bring in funding from largely East Coast investors, foregoing the traditional Silicon Valley venture capitalists.
The company’s high-profile investors and board members bolstered hype in the company and continued to drive its valuation up — until a 2015 Wall Street Journal article alleged it was all a fraud.
The same day that article was published, Holmes appeared on CNBC’s “Mad Money” with Jim Cramer to rebuff the charges, claiming the paper was trying to stifle innovation.
“First they call you crazy, then they fight you, then you change the world,” she said on CNBC, paraphrasing a quote that’s often misattributed to Mahatma Gandhi.
Theranos gradually bled employees and was officially defunct by 2018. That same year, the Securities and Exchange Commission officially charged Holmes with “massive fraud,” accusing the founder of taking more than $700 million from investors while lying about her company’s technology.
And later in 2018, the US Department of Justice also charged Holmes and Balwani, accusing them of defrauding investors, medical professionals and customers.
This story originally appeared on the New York Post and is reproduced here with permission
Originally published as Elizabeth Holmes trial: Theranos founder boasts about being ‘best business person’
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