(CN) — The prosecution concluded months of testimony by saying Theranos CEO Elizabeth Holmes chose to lie to investors and patients during the highly anticipated closing arguments on Thursday in San Jose.
U.S. Attorney Jeff Schenk detailed the evidence that Holmes knew the Theranos portable blood analyzer was not working and would never work, but continued to exaggerate the accuracy of the tests to investors and patients for financial gain.
“Elizabeth Holmes made a decision to defraud her investors and then her patients,” Schenk said at the top of the lengthy closing argument. “She chose fraud. She chose to be dishonest with investors and patients. It was not only callous but it was criminal.”
Schenk attacked many of the lines of defense brought up during the trial, such as Holmes being unaware of the problems in the clinical lab, being under the spell of her more experienced business partner Sunny Balwani, that she hid her use of third-party testing machines to protect vital intellectual property and that she put logos from major pharmaceutical companies like Pfizer, Schering Plough and others to indicate previously completed validation surveys.
“She did not tell investors about third party devices,” Schenk said.
In fact, when Parloff asked her if she used machines from other companies, she explicitly said no.
“Trade secrets do not give her the right to make false statements,” Schenk said. The government has often argued that Holmes used the press in 2013, through a series of articles, to spread false information about what Theranos technology was capable of and how the company was currently processing tests.
“In the Fortune article, she says that each Theranos device can run any test,” Schenk said. “This isn’t aspirational, it’s not about the future, it is a statement about what is currently available.”
Kevin Downy, attorney for Elizabeth Holmes, sought to punch holes in the edifice of these arguments by saying that Holmes added logos from pharamaceutical companies because she performed successful validation tests with those very companies and that in many cases Holmes sent the documents to the very companies whose logo appeared on the page.
“There was a 14-month partnership between Pfizer and Theranos and Dr. Weber had no involvement,” Downey said. Shane Weber was one of the government witnesses, who worked for Pfizer and testified that the company did perform a multi-month validation study with Theranos but decided it was not interested in the company’s technology.
But Downey said Weber was not privy to the full scope of the relationship between the two companies as they continued to communicate well beyond Weber’s tenure at Pfizer.
“Dr Weber had a limited view,” Downey said.
It was a trend that Downey kept harping on, saying that witnesses like Erika Cheung and others did not know the full story as it related to Theranos' operations.
Downey insisted that Holmes was secretive about the use of third-party machines because they believed they had developed a breakthrough, that if discovered, would forfeit a competitive advantage.
Theranos, after it engaged with a contract with Walgreens to perform blood tests in the stores, processed many blood tests at a centralized lab in Palo Alto, as opposed to on the actual portable blood analyzers.





