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Elizabeth Holmes wants new trial, citing regrets of ‘key witness’

The lawyers for the blood-testing company Theranos' co-founder say the government built part of its case on flawed testimony from a lab director with problems of his own.

SAN JOSE, Calif. (CN) — Elizabeth Holmes, the disgraced founder of Theranos, has asked for a new trial, saying new evidence has been discovered from a remorseful star witness in the fraud trial that ended in her conviction.

The $9 billion blood-testing startup’s CEO learned this past week a federal judge would likely deny her request for acquittal on grounds the jury did not have enough evidence to make a reasonable determination of guilt.

U.S. District Court Judge Edward Davila said in his order issued Tuesday that there was enough evidence throughout the trial, from text messages to financial records, for a “reasonable juror” to find that Holmes conspired with her partner and lover Ramesh “Sunny” Balwani to commit wire fraud to prevent “financial ruin” for their company. Davila said evidence demonstrated that Holmes made false representations to investors about Theranos’ relationship with Walgreens and the company’s technology, growth and potential, to secure funding.

This past week, Holmes’ lawyers said they were not seeking a new trial. But that position changed Tuesday, as her legal team filed court documents claiming key witness Adam Rosendorff attempted to visit Holmes at her home after the jury’s verdict and claimed he had misgivings about his testimony. Rosendorff was Theranos’ laboratory director from April 2013 to November 2014. 

Holmes’ lawyers said Rosendorff tried to visit her on Aug. 8 and claimed that at trial he tried to answer questions honestly but that “the government tried to make everyone look bad.” Attorneys say Rosendorff thinks he did something wrong to Holmes and said he had difficulty sleeping with his testimony weighing on him. 

Rosendorff allegedly explained he thought it would be “healing for both himself and Elizabeth to talk,” according to the new filing. He asked attorney Lance Wade if they could arrange a visit between himself and Holmes at her home, but Wade did not respond directly due to ethical restrictions, instead contacting Rosendorff’s attorney. 

Holmes’ attorneys requested a new trial, with an evidentiary hearing on Oct. 3, on the grounds that Rosendorff’s new statements show “reasonable probability” that newly discovered evidence could have led to a different result if it were presented in the first trial.

“Dr. Rosendorff’s statements reflecting his concerns with the government’s presentation of his trial testimony, along with his comments that bear on Ms. Holmes’ intent, put the integrity of the jury verdict against Ms. Holmes in grave doubt,” the lawyers argue. They said the government’s attorneys mentioned Rosendorff more than any other government witness in both opening and closing statements, and he testified longer than any other government witness. 

Holmes' lawyers say they warned Davila that Rosendorff's testimony was problematic, saying prosecutors elicited misleading testimony throughout his cross-examination and that the government kept information from the jury about investigations into his competence. They said the government relied too heavily on him given his potential bias, due to pending government investigations into three positions he held post-Theranos — Perkin Elmer, Invitae and uBiome — which they said could motivate him to shift the blame for any Theranos issues to others, including Holmes.

“The government’s examination of Dr. Rosendorff led to a host of misleading statements that Holmes’ counsel was forced to correct on cross-examination,” the lawyers added.

Holmes' attorneys then filed a separate motion for a new trial, citing new evidence in Balwani's trial. Balwani was convicted on 12 counts of fraud in July, and Holmes' legal team said the government changed its position on how it would portray his relationship with Holmes during court proceedings.

Attorneys said the government’s statements in closing arguments during Balwani’s trial "reflect a dramatic shift in the government’s position about the nature of Ms. Holmes’ relationship with Mr. Balwani." They said if the government had tried Balwani first and pursued the theory that he had influence over Holmes due to age and experience, Holmes could have admitted the government's statements at her trial as evidence.

Doing so would have forced the jury to look differently at the government's evidence about Balwani's role at the company and the existence of a criminal conspiracy, and could have led to an acquittal for Holmes, the attorneys claim. They argue that Holmes being tried before Balwani prevented her ability to introduce this evidence at her trial.

The jury’s decision in the Holmes case came after testimony from more than 30 witnesses, including Holmes, heard over 15 weeks. The jury spent more than a week deliberating before convicting Holmes on four charges, deadlocking on three others.

The former CEO is scheduled to be sentenced on Oct. 17 and faces decades in prison.

Federal prosecutors declined to comment on the motion for a new trial.

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