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Saturday, December 9, 2023
Courthouse News Service
Saturday, December 9, 2023 | Back issues
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Theranos co-founders Holmes and Balwani strike out in bids to dump fraud convictions

A federal judge found Elizabeth Holmes did not provide enough evidence of a faulty trial or government misconduct.

SAN JOSE, Calif. (CN) — A federal judge has denied disgraced Theranos founder Elizabeth Holmes' request for a new trial, setting the stage for her sentencing on four counts of wire fraud.

Holmes had asked for a new trial in September after asking for an acquittal on the grounds that the jury did not have enough evidence to make a reasonable determination of guilt. Holmes claimed key witness Adam Rosendorff attempted to visit her home after the jury’s verdict and said he had misgivings about his testimony. Rosendorff was of the $9 billion blood-testing startup's laboratory director from April 2013 to November 2014. 

Holmes demanded a new trial on the grounds that Rosendorff’s new statements could show “reasonable probability” that newly discovered evidence could have led to a different result if it were presented in the first trial, and prove “government misconduct” including suppressed emails around Theranos’ lab information database.  

Separate juries convicted Holmes and her co-founder and former romantic partner Ramesh “Sunny” Balwani of wire fraud, with Balwani accused of working with Holmes to defraud investors by claiming their technology would revolutionize the health care industry with blood tests using only one drop of blood. Balwani was convicted on 12 counts of fraud this past July, but Holmes’ attorneys argued new evidence could show how he influenced Holmes’ decisions. 

The jury’s decision in the Holmes case came after testimony from more than 30 witnesses, including Holmes, heard over 15 weeks. Jurors took more than one week to deliberate before convicting Holmes on four charges and deadlocking on three others.

After a full briefing on all three motions for a new trial with a limited evidentiary hearing to examine Rosendorff, U.S. District Court Judge Edward Davila ruled Monday night to dismiss all motions for a new trial. He said the burden of justifying a new trial rested with Holmes, and she failed to provide convincing evidence.

In his 15-page order, Davila said Rosendorff’s statements do not meet requirements for a new trial, with Rosendorff testifying more than once that he did not believe the government was "making things sound worse than they were at trial" and saying he believed the government was not “cherry-picking or being selective” when presenting exhibits during his examination. He said Rosendorff's comments were too vague to construe specific moments when the government may have misrepresented evidence.

“Court finds Dr. Rosendorff’s statements under oath to be credible, which would declaw most, if not all, of the negative implications that defendant would attribute to them,” Davila wrote. “Even if Dr. Rosendorff’s statements carried the implications proposed by the defendant, they would nonetheless be either immaterial to the issues or cumulative of evidence already presented at trial.”

As for the argument of a due process violation due to government misconduct, Davila said that for every instance where the government may have created a misleading impression on direct, Holmes said that impression was later clarified in cross-examination, “which would have ultimately provided the complete picture to the jury.”

Davila also said evidence of Balwani’s influence over Holmes is not new and unlikely to result in acquittal.

“Defendant provides no support for the proposition that opinions or characterizations from government attorneys — who have no contemporary personal knowledge of the co-defendants’ relationship — would carry any evidentiary weight as to the actual relationship that existed during the relevant time,” he wrote.

Davila also found Holmes did not prove the government suppressed emails about Theranos’ database, or any reasonable probability that her trial would have turned out differently if the attorneys on the emails had been identified. 

Holmes will be sentenced in federal court on Nov. 18. She faces a maximum penalty of 20 years in prison with substantial fines.

Davila also denied a motion for judgment of acquittal for Balwani, saying there is sufficient evidence to convict Balwani on all counts. 

“The evidence showed, and a reasonable jury could find, that Mr. Balwani and Ms. Holmes agreed to defraud investors to gain money,” Davila wrote, citing evidence that Balwani made false representations about the company to investors and wrote text messages and emails with Holmes demonstrating a conspiracy to commit wire fraud. He also recently denied a new trial for Balwani for similar reasons.

Balwani’s sentencing will take place Dec. 7. He faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and conspiracy.

Lawyers for Holmes and Balwani did not respond to a request for comment before deadline. 

Follow @nhanson_reports
Categories / Criminal, Health, Technology

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