Holmes signals intention to blame her ex-lover

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In a strong signal that Theranos founder Elizabeth Holmes will seek to blame her co-defendant and ex-lover Sunny Balwani for alleged fraud at her failed start-up Theranos, the defense team asked the judge for her trial to let them make statements previously made by Balwani to the jury.

In a petition filed this week, Holmes’ attorneys said they had sought to call Balwani – the former Theranos president who she said coerced, controlled and abused her in a way that affects the issue of guilt – to testify at his trial. , but his attorney said if called, he would invoke the Fifth Amendment, refusing to testify to protect himself against self-incrimination. A lawyer for Balwani did not immediately respond to a request for comment.

In lieu of Balwani’s testimony, Holmes’ attorneys seek to present three depositions that Balwani made to the United States Securities and Exchange Commission, which the motion says will illustrate details of the “management of certain aspects of the operations of Theranos ”by Balwani, including lab oversight and relationships with drugstore chain Walgreens and grocery chain Safeway, as well as Theranos’ financial model.

The motion is the clearest indication to date that Holmes’ legal team is considering pursuing a line of defense described in pre-trial court documents: that she was in an ‘abusive intimate partner relationship’ with Balwani , in which he exercised psychological and emotional control over her. Although Holmes took the witness stand for three days in his own defense, prosecutors have yet to discuss his relationship with the former Theranos president.

Pre-trial court documents claimed that “the pattern of abuse and coercive control continued during the period of the indicted conspiracies” and referred to alleged sexual abuse by Balwani, as well as allegations that he allegedly disparaged Holmes, withdrew her affection if she displeased her, and controlled what she ate, how she dressed, how much money she spent and who she interacted with, erasing her decision-making ability. The documents also claim that Balwani monitored Holmes’ movements, calls, text messages and emails; committed physical violence such as throwing hard and pointed objects at him; and restricts his sleep.

Pre-trial documents suggested the defense planned to present testimony from a psychologist specializing in relationship violence who examined Holmes and made reference to the potentially debilitating symptoms of post-traumatic stress disorder that Holmes suffers from as a result of the relationship. .

Holmes and Balwani are both charged with fraud in connection with Theranos, which Holmes founded in 2003 as a dropout from Stanford University. The government says several hundred patients have been swindled by startup Palo Alto and investors have been swindled over $ 700 million. Holmes and Balwani have denied the allegations.

Balwani’s name came up frequently in Holmes’ criminal trial. Prosecutors say she and Balwani knew Theranos’ blood testing technology was unreliable, inaccurate, and could only perform a limited number of tests, despite their public claims that the company’s machines could perform a full range of tests on a few drops of blood. with a fingertip.

Prosecutors also introduced text messages between Holmes and Balwani in 2015 in which she called him “My water.” And the ocean ”, and saying, madly in love with you and your strength.

The documents that Holmes ‘lawyers are now seeking to introduce into the lawsuit are three depositions that Balwani made to the SEC in August and September 2017. In the statements, Balwani appears to be appropriating key areas of Theranos’ operations at the heart of the prosecution fraud case and suggests that Holmes may have had limited knowledge of these areas.

In statements filed with the petition, Balwani takes responsibility for managing the operations of Theranos ‘lab, as well as taking over the “leadership role” in Theranos’ failed partnerships with Walgreens and Safeway, and building the ” financial model ”for Theranos – although he made a distinction between that model and income projections, a set jurors have heard of missed their targets by hundreds of millions of dollars.

In a statement, Balwani claims Holmes knew he had created a financial model for Theranos, but even though she was “generally familiar” with the information he used for it, she may not have known most of it. or all. On the issue of the “null protocol” for demonstrations of the company’s blood testing machine, which jurors have heard could hide errors in the company’s testing technology, Balwani told the SEC that this was a “deep software concept” that he had never discussed with Holmes.

Holmes faces maximum sentences of 20 years in prison and a fine of $ 2.75 million if convicted, plus possible restitution, the Justice Department said. She is expected to resume her testimony on Monday.

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