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Jury in Elizabeth Holmes Trial Seized on Two ‘Smoking Weapons’ to Convict Theranos Founder, Juror Says

Jury in Elizabeth Holmes Trial Seized on Two ‘Smoking Weapons’ to Convict Theranos Founder, Juror Says

SAN JOSE, Calif.—Of their second week of deliberations, jurors within the trial of Elizabeth Holmes seized on what one juror described as two “smoking weapons” that sealed the destiny of the Theranos Inc. founder.

Huddled in a fifth-floor courtroom, the 4 girls and eight males have been grappling over whether or not she had defrauded giant Theranos buyers about her blood-testing startup. Jurors zeroed in on two items of proof they believed confirmed Ms. Holmes deliberately lied to buyers, stated Susanna Stefanek, identified all through the trial as Juror No. 8.

For some, the damning proof was a report Theranos gave buyers that Ms. Holmes altered to make it seem like it was an endorsement from pharmaceutical large

Pfizer Inc.,

Ms. Stefanek stated. What was worse for her, the juror stated, was a doc of economic projections given to potential buyers, together with prosecution witness Lisa Peterson, who works for the DeVos household workplace, which had invested $100 million in Theranos.

“There have been simply so many falsehoods on that sheet of paper,” stated Ms. Stefanek, an editorial supervisor at Apple Inc. The 2014 doc projected $40 million in annual income from drug corporations, although jurors had heard from authorities witnesses that Theranos had no such contracts on the time.

The juror stated the dialogue was amongst their most important within the greater than 50 hours of deliberations earlier than they discovered Ms. Holmes, who claimed to revolutionize blood testing, responsible on 4 fees that she carried out a yearslong fraud scheme in opposition to buyers.

A federal jury convicted Theranos founder Elizabeth Holmes on 4 of 11 criminal-fraud fees. Every depend carries a most jail sentence of 20 years. WSJ’s Sara Randazzo shares highlights from Holmes’s testimony. Picture: Josh Edelson for The Wall Avenue Journal

The jury of retirees, authorities workers, retail and technology-industry staff adopted the decide’s directions fastidiously and examined proof underpinning every of the counts, stated Ms. Stefanek, who added that they have been collegial and didn’t increase their voices, even when debating.

They deadlocked on three different counts involving allegations that Ms. Holmes defrauded buyers, and acquitted her on 4 counts that she defrauded sufferers. Ms. Stefanek stated the jury didn’t imagine there was proof linking Ms. Holmes on to affected person allegations that they obtained false blood-testing outcomes.

Hours earlier than rendering its verdict Monday, on the seventh day of deliberations, jurors wrestled with Ms. Holmes’s most gripping testimony, when she tearfully alleged in surprising element that her former Theranos Inc. deputy and longtime boyfriend had abused her, which he has denied.

Although the jurors usually believed Ms. Holmes that she was abused by her former deputy and boyfriend, Ms. Stefanek stated, they shortly concluded that prosecutors have been right in closing arguments that these allegations had no bearing on whether or not Ms. Holmes dedicated fraud in opposition to sufferers and buyers throughout her time operating Theranos.

“There was a certain quantity of cynicism that it was a sympathy ploy,” the 51-year-old Ms. Stefanek stated, including that she believed Ms. Holmes’s allegations however agreed they’d no place within the trial.

The courthouse advanced in San Jose, Calif., the place jurors within the trial of Theranos founder Elizabeth Holmes heard 15 weeks of testimony.



Picture:

Jason Henry for The Wall Avenue Journal

The upshot: Ms. Holmes’s daring gamble to testify on her personal behalf—and her crew’s determination to boost the abuse allegations with out tying them on to what occurred at Theranos—fell flat. The jurors created a star system to guage the credibility of witnesses, Ms. Stefanek stated, and rated Ms. Holmes as a 2 on a scale of 1 to 4, the bottom rating of any witness.

Attorneys for Ms. Holmes and a consultant for the U.S. lawyer’s workplace within the Northern District of California didn’t reply to requests for remark.

Jurors started deliberating through the week of Christmas, selecting a foreman. Every initially shared their basic view after listening to 15 weeks of testimony from 32 witnesses. Housed in a courtroom within the downtown San Jose courthouse, they unfold out in a tough arc round a display screen and pc given to them to view reveals, Ms. Stefanek stated.

In that first survey, Ms. Stefanek stated, many individuals have been “pretty noncommittal,” taking to coronary heart the decide’s directions to not make up their minds earlier than deliberating.

From there, they organized their ideas on the 29 authorities and three protection witnesses, going by reveals and notes and writing up the important thing factors every made on giant, white sheets of paper that they caught to 1 wall of the courtroom.

Lots of the credibility rankings the jurors gave witnesses have been excessive, Ms. Stefanek stated, together with for former Protection Secretary

Jim Mattis,

representatives from Theranos enterprise companions

Walgreens Boots Alliance Inc.

and Safeway Inc., and sufferers and medical doctors who testified about receiving Theranos outcomes that troubled them.

Former Protection Secretary Jim Mattis earned a powerful credibility rating as a witness from the jurors within the Elizabeth Holmes trial, one juror stated.



Picture:

David Paul Morris/Bloomberg Information

Witnesses who appeared to have an agenda misplaced stars, Ms. Stefanek stated, together with former lab employee Erika Cheung, who appeared to be “invested in a sure final result.”

In an e-mail Thursday, Ms. Cheung stated: “I respect the jury’s effort, time, and vitality.” She known as the rating “a sign that there’s nonetheless stigmatization in opposition to whistleblowers.”

Ms. Cheung famous that prosecutors introduced proof at trial corroborating the pink flags she had raised about Theranos, including: “A life aim of mine was by no means to play a task in sending somebody to jail.”

Ms. Holmes’s two-star ranking was based mostly on how a lot she had at stake within the case and the probability she was spinning her testimony to make herself look good, Ms. Stefanek stated. No witness obtained a rank of 1.

Michael Kew, juror No. 11, stated from the balcony of his house in Santa Cruz, Calif., on Wednesday night time that he discovered Ms. Holmes extra reliable than a few of his fellow jurors did. Different jurors declined to remark or couldn’t be reached for remark.

Throughout their first three days of deliberating, jurors recapped the witnesses, Ms. Stefanek stated. The jury returned on Dec. 27 and took an nameless ballot with their votes on every of the 11 counts.

Former Theranos lab employee Erika Cheung was cross-examined within the Holmes trial.



Picture:

Vicki Behringer

Three counts have been unanimous: responsible verdicts associated to Ms. Holmes’s pitches to 3 of the buyers within the indictment. The opposite eight counts got here again blended as soon as the foreman tallied up the outcomes on a whiteboard.

Although they initially have been divided, jurors quickly agreed to acquit Ms. Holmes on the one depend of conspiracy to commit wire fraud and three counts of wire fraud tied to sufferers, Ms. Stefanek stated.

She stated the jury concluded that prosecutors didn’t current sufficient proof to point out that Ms. Holmes knowingly pitched a defective product to induce sufferers to pay for checks.

The jury was in settlement, Ms. Stefanek stated, that the Theranos lab was run shoddily and never in the best way to be anticipated from an organization getting down to obtain the best high quality in medical care. However jurors thought the burden of proof on defrauding sufferers was greater.

“If all we’d needed to show was that she knew there is likely to be issues within the lab and that may find yourself harming sufferers, that may be one factor,” Ms. Stefanek stated.

Jurors additionally weren’t persuaded by the testimony of 1 affected person, Erin Tompkins, who had alleged that she obtained an incorrect Theranos blood check end result indicating she could possibly be HIV-positive.

Ms. Stefanek stated she wasn’t persuaded the check really confirmed Ms. Tompkins was HIV-positive.

On Thursday, Ms. Tompkins stated she acknowledged that the jury had a difficult job. She stated Ms. Holmes’s protection lawyer muddied her story by asking what she considered as convoluted questions that made it seem like she had misinterpreted the end result. She stated she continues to strongly imagine the Theranos check end result confirmed she was HIV-positive.

Erin Tompkins, in sun shades, testified that she received an incorrect Theranos blood check end result indicating she could possibly be HIV-positive, although one juror says the jury general wasn’t persuaded.



Picture:

PETER DASILVA/REUTERS

All through the deliberations, the jury supplied factors and counterpoints. Ms. Stefanek stated she typically took on the position of elevating factors introduced up by the protection.

She might provide you with nothing, nevertheless, to counter the testimony of two former Theranos lab administrators who testified that they not often or by no means stepped foot within the lab and did little greater than signal some paperwork.

“It was comical, actually,” she stated of what the jurors known as the “stuntman administrators,” including, “there was no method to put a very good spin on it.”

With the affected person counts determined halfway by the second week, Ms. Stefanek stated, the jury turned to the investor counts.

That was once they zeroed in on what Ms. Stefanek known as the “smoking weapons” involving the doctored doc referring to Pfizer and the inflated monetary projections to the DeVos household workplace.

“She was attempting to make this factor look higher than it was, and that was simply clearly a misleading act,” Ms. Stefanek stated of the Pfizer report.

Within the latter occasion, Ms. Peterson, who labored for the DeVos household workplace, had scribbled “900 shops” on the prime of the doc, which she testified was a reference to Ms. Holmes saying Theranos deliberate to roll out to 900 Walgreens pharmacies.

That was additionally problematic, Ms. Stefanek stated, as a result of jurors had heard that months earlier Walgreens had scaled again its projections for the rollout to 200 shops as Theranos missed benchmarks. Walgreens finally by no means had Theranos facilities in additional than 41 shops.

She was keen to provide Ms. Holmes some good thing about the doubt as a result of a little bit of exaggeration is frequent in Silicon Valley, Ms. Stefanek stated. However she stated: “When it received to offering these exhausting cash figures that have been utterly bogus, that was after I needed to say no.”

She stated some jurors weren’t persuaded by the federal government’s declare that Ms. Holmes falsely embellished Theranos’s relationship with the U.S. navy, and it didn’t determine closely into deliberations.

The jury did discover fault with demonstrations Ms. Holmes gave to buyers and VIP guests to Theranos. Witnesses for the federal government testified that in these instances, Theranos had taken a Potemkin-village strategy, exhibiting its proprietary-testing gadgets, however really taking again the blood samples to its lab to be run on standard lab machines.

The unresolvable divide within the jury came to visit three counts associated to early buyers in Theranos: Black Diamond Ventures, Corridor Group and Alan Eisenman.

Jurors deliberated in a fifth-floor courtroom in a federal courthouse in San Jose, Calif.



Picture:

Jason Henry for The Wall Avenue Journal

Ms. Stefanek stated she was in a minority in desirous to vote “not responsible” on these counts, pondering there was far much less proof of misrepresentations made to those buyers. Mr. Kew confirmed that almost all of the jurors have been on one facet of the problem.

On the depend associated to Mr. Eisenman, a fiery Texan who talked again throughout cross-examination and was repeatedly chided by the decide, some jurors concluded that one issue lower in opposition to a conviction: Theranos had supplied to purchase again his shares. Ms. Stefanek stated that motion made it tough for some jurors to view Mr. Eisenman as a sufferer of a scheme to take his cash.

Mr. Eisenman couldn’t be reached for remark.

The jury debated for days on these three counts associated to buyers, Ms. Stefanek stated. On Monday, jurors despatched a observe to U.S. District Decide

Edward Davila

telling him they have been at an deadlock. When Decide Davila instructed them to maintain working, they mentioned the counts for 3 extra hours.

Neither facet would change its stance. That they had accomplished all they may do.

“All of us believed that she set out with the perfect of intentions on altering the world and doing a fantastic factor,” Ms. Stefanek stated. “However we additionally agreed that ended up inflicting her to make some large errors, and to do some fraudulent issues.”

Theranos founder Elizabeth Holmes and her household depart after the decision rendered by the jury of 4 girls and eight males.



Picture:

BRITTANY HOSEA-SMALL/REUTERS

Theranos and the Elizabeth Holmes Trial

Write to Sara Randazzo at sara.randazzo@wsj.com and Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com

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