Health and Beauty

The judges can hear restricted proof of the CEO’s way of life

Theranos founder Elizabeth Holmes leaves the Robert F. Peckham Federal Building in downtown San Jose, California with her defense team on Tuesday, May 4, 2021.

MediaNews Group / The Mercury News via Getty Images | MediaNews Group | Getty Images

The jury in the Elizabeth Holmes trial will hear evidence of her flamboyant lifestyle as CEO of Theranos, but with some qualifications.

This is the verdict of U.S. District Court Judge Edward Davila late Saturday in a 100-page response to motions in Holmes’ impending criminal case.

The judge partially granted Holmes’ motion to exclude evidence pointing to her extravagant lifestyle outside of her position as managing director of the blood testing start-up.

“The government has evidence that Holmes, as CEO of Theranos, had a lifestyle comparable to that of other technology company CEOs, including salaries, travel, celebrities, and other perks and benefits appropriate to the position,” wrote Davila in the file.

“However, references to specific purchases or details that reflect the branding of clothing, hotels or other personal effects are not relevant and the adverse effect of that evidence outweighs the probative value,” added the judge.

The ruling is a partial victory for Holmes as the prosecution outside of their position as CEO cannot provide details on Holmes’ specific purchases and personal effects. Holmes lived in an expensive rental house, traveled by private jet, stayed in luxury hotels, and employed assistants hired by Theranos to handle their lavish shopping sprees.

“Any time Holmes made an extravagant purchase, it is reasonable to infer that she knew that her fraudulent activities enabled her to pay for these items,” wrote Davila. “While the benefits of these purchases are not so directly related to the fraud, it may still be evidence of Holmes’ scholars.”

The verdict comes two weeks after Holmes argued with prosecutors in court about whether details of her assets, lifestyle, and benefits she gained as CEO are relevant to the jury in her trial.

At the height of Theranos, the startup was valued at $ 9 billion and Holmes was touted as the youngest self-made billionaire in the world. The company collapsed in 2018 following an investigation by the Wall Street Journal that found flaws in blood test technology.

Davila ruled on more than 20 requests for duels, which the jury will hear in their trial, which is set to begin on August 30th.

A government motion to allow business-related text messaging between Holmes and her co-defendant Ramesh “Sunny” Balwani was denied by Davila.

Prosecutors say the news shows the top two executives knew how much trouble Theranos was in before it collapsed. In a November 2014 text to Holmes, Balwani describes a Theranos laboratory as a “bloody disaster zone” and adds that he “would work to fix it”.

Holmes and Balwani have both pleaded guilty to a dozen fraud charges related to deceiving investors, patients and doctors.

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