Elizabeth Holmes describes the abusive relationship with Therano’s ex-President Balwani earlier than the cross-examination
SAN JOSE, CALIF. – In an emotional and sometimes tearful statement Monday, Theranos founder Elizabeth Holmes accused her ex-boyfriend, Ramesh “Sunny” Balwani, who was also the company’s president, of a pattern of physical and psychological abuse, including forced sex.
Holmes, 37, stood on the stand for her fourth and final day of questioning by her defense attorneys, with the indictment next under what must have been a heated cross-examination. For her role at the blood testing company, which collapsed in 2018, a few years after being valued at $ 9 billion, Holmes has faced eleven wire fraud and wire fraud conspiracies.
While Holmes mentioned Balwani dozens of times in her three-day testimony, the subject of abuse did not come up until Monday afternoon when the defense responded to a central allegation made shortly before the trial. Her attorneys wrote at the time that Holmes had suffered a “decades-long campaign of psychological abuse” by Balwani.
Holmes told jurors Monday that during the decade they were together, Balwani persistently criticized her work ethic, “mediocrity” as an entrepreneur and the fact that she “came across like a little girl”. Physical abuse would follow, she said.
“He got very angry with me and then sometimes he would come upstairs to our bedroom and make me have sex with him when I didn’t want to because he wanted me to know he still loved me,” said Holmes fight back tears occasionally.
When asked how Balwani’s behavior had affected her relationship with her family, Holmes said it was particularly harmful.
“I saw them less than I had ever seen them before, and I spoke to them less than I had ever spoken to them before,” she said. “Because I tried to focus all my time on the company. Sunny would get very upset if I was with my family. He said it distracted business. “
Jeffrey Coopersmith, Balwani’s attorney, declined to comment.
Sunny Balwani, former President and Chief Operating Officer of Theranos Inc., leaves federal court in San Jose, California on October 2, 2019.
Michael Kurz | Bloomberg | Getty Images
During the first 11 weeks of the trial, prosecutors called former lab directors, patients, doctors, business partners and investors, and journalist Roger Parloff, who wrote Fortune magazine in 2014, to the stand Cover story “This CEO is out for blood.”
The indictment lingered on November 19, and later that day the defense surprised the courtroom by calling Holmes as a witness. The Stanford University dropout and former child prodigy from Silicon Valley could spend up to two decades in prison if convicted. She pleaded not guilty.
Balwani, who is 20 years older than Holmes, faces the same charges and will be tried at a later date. Nor did he plead guilty.
Holmes founded Theranos in 2003. Balwani joined them six years later and was Holmes’ deputy until he left in 2016. In a statement last week, Holmes said Balwani was responsible for running the company’s laboratories and processing financial projections.
Holmes told jurors on Monday that they met Balwani in China. She was 18 at the time, he was 38.
“I understood that he was a really successful businessman, that he worked with Bill Gates in the early days of Microsoft,” said Holmes. “I talked to him about wanting to start a company and a company I tried to start in high school and I asked his advice.”
While studying at Stanford the following school year, Holmes said Balwani would email her. Holmes left Stanford her sophomore year to work at the company that became Theranos.
Kevin Downey, Holmes’ attorney, asked if there were other reasons she left Stanford.
“I was raped,” said a weeping Holmes. (Police authorities told CNBC that they had no record of a report in Holmes’ name.)
Then she was asked what impact this experience had on her life.
“I was wondering what, how I can process this experience and what I would do with my life,” she said. “And I decided to build a life for myself by building this company.”
Downey asked Holmes if she had spoken to Balwani about the incident. Holmes said she did and that: “He said that I am safe now that I met him.”
During the prosecution’s trial, Holmes was portrayed by a number of witnesses as the undisputed leader of Theranos and the person solely responsible for all major decisions. She selected board members, met with investors and arranged business meetings with potential partners.
“I had to kill the person I was”
While she admitted in her defense replies that some of her behavior was below par, like adding drug manufacturer logos to Theranos lab reports, Holmes insisted that she had no intention of misleading patients or investors.
Now Holmes is asking the jury to believe that they were under the influence of Balwani for at least a decade of that time.
“He told me I didn’t know what I do in the business, that my beliefs were wrong, that he was amazed at my mediocrity, that if I followed my instincts I would fail, and that I would have to kill the person who I should be a new Elizabeth who could be a successful entrepreneur, “said Holmes.
She added that Balwani insisted on working seven days a week if she wanted to be successful and that she only spent time with people who can help in the business.
“He told me not to sleep much, just eat foods that cleanse me and give me the most energy possible in the company,” she said.
Downey read a text from Balwani to Holmes dated November 30, 2013, which said, “When your family is here, I feel very lonely.”
Holmes provided the jury with the background for the text.
“He’s mad at me for feeling neglected when my family came for Thanksgiving,” she said. “This is one of those nights when he came upstairs crying and doing things to me that I didn’t want and hurting me.”
Downey asked Holmes if she sometimes took notes “after Sunny had sex with you”.
Holmes said she did, referring to a note dated February 2015. In the note, she said, “In response to one of these incidents, I am writing about the fact that I could not move and sit up and that I was lying swollen and couldn’t understand why I hurt myself, why I didn’t go. “
She added, “He had taught me everything I thought I knew about business, and I thought he was the best business person I knew. I think I didn’t question him the way I would have otherwise. “
Holmes said her view changed in 2016. At that point, the Centers for Medicare and Medicaid Services came on an inspection after a series of reports in the Wall Street Journal exposed Theranos’ false promises and technological flaws.
“I left with this inspection thinking that we had one of the best laboratories in the world and the results of that inspection were so radically different from what I thought,” said Holmes.
She said that after the failed inspection, she hired two lab managers and brought in other lab experts, all to the horror of Balwani, who left the company shortly after these decisions were made.
“He wasn’t what I thought he was,” said Holmes. “And I realized that if I wanted to fix the issues and allow the company to see its potential, I would have to do it without him in the company.”
Still, in response to a series of questions from her attorney, Holmes said that Balwani had not forced her to make any statements about Theranos to investors, business partners or journalists.
Downey asked, “What impact, if any, has your relationship with Balwani-san had on your work at Theranos?”
“I don’t know,” she said. “He influenced everything who I was and I don’t quite understand that.”
At the end of Downey’s survey, Holmes was asked about the company’s value. She said it was worth $ 9 billion. Holmes owned 50%, which gave her about $ 4.5 billion in net worth, she said, which was equivalent to the value attributed to her by Forbes Magazine in 2015. A year later these stocks were worthless.
Holmes told Downey that she had the chance to sell her shares to new investors associated with various board members. When asked if she had ever sold, she said no.
“I didn’t mean to,” she said. “I believed in the company and wanted to put everything I had into it.”
“Do these stocks have any value now?” asked Downey.
“No,” said Holmes.
The court went on hiatus just before 4 p.m. California time. The government cross-examination begins Tuesday morning.
Holmes tried to make eye contact with each of the jurors as they left the courtroom. Most of them didn’t look at her.
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