Disgraced Theranos CEO Elizabeth Holmes Surprisingly Takes Stand at Her Criminal Trial

In a shocking twist, Elizabeth Holmes took the witness stand late Friday in her criminal fraud trial. The former Theranos CEO is attempting to refute the U.S. government's allegations that she mislead investors and patients into believing that her startup, Theranos, would reshape healthcare.

Holmes took the stand about five hours after prosecutors rested the case they spent the past three months building against her.

Holmes began her testimony by talking about her early years as a student at Stanford University and her interests in disease detection while working with a respected chemistry professor, Channing Robertson. He would later join Theranos.

"He encouraged me to continue my research," Holmes recalled.

The decision to have Holmes testify so early in her defense was a bombshell development. Federal prosecutors made it clear they are eager to question Holmes under oath, but won't get that opportunity until Monday when the trial resumes.

During Holmes' defense, her lawyers are likely to argue that she never broke the law while pursuing her ambitions to change how blood-testing was done with something she billed as a revolutionary technology.

The technology in question involved a Theranos device called the Edison that would scan for hundreds of health problems with a few drops of blood making it easier and cheaper to scan for early signs of disease and other health issues. Existing blood tests generally require a needle in the arm to extract a vial of blood for each test.

Holmes' lawyers must present a case that persuades jurors that the government has not met its burden to prove guilt beyond a reasonable doubt. They probably will go beyond that threshold, predicted Jessica Roth, a law professor at Yeshiva University in New York,

"What the defense will do is present witnesses and documentary evidence, much as the prosecution would, to support its claim that Elizabeth Holmes did not have an intent to deceive anybody," Roth said.

Update 11/19/21, 6:34 p.m. ET: This article was updated to note Holmes' decision to testify and what she said to open her testimony.

For more reporting from the Associated Press, see below.

Elizabeth Holmes, Theranos, Silicon Valley
Elizabeth Holmes, founder and CEO of Theranos, surprisingly testified in her own trial on Friday, November 19. Above, Holmes leaves the Robert F. Peckham Federal Building in downtown San Jose, California, on May 4, 2021. Nhat V. Meyer/Bay Area News Group/AP Photo

The government's evidence included testimony from 29 witnesses, including former U.S. Defense Secretary and former Theranos board member General James Mattis, as well as internal documents and sometimes salacious texts between Holmes and her former lover, Sunny Bulwani, who also served as Theranos' chief operating officer.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

In the prelude to the trial, Holmes' lawyers filed papers stating she may testify about being manipulated by her former boyfriend—and Theranos' chief operating officer—Sunny Balwani, who faces similar charges in another criminal trial scheduled to begin early next year. In their cross-examination of government witnesses, Holmes' lawyers have repeatedly tried to vilify Balwani.

Those flaws didn't become public knowledge, though, until The Wall Street Journal published the first in a series of explosive articles in October 2015, and the results of an audit by the Centers for Medicare and Medicaid Services were released the next year.

By then, Holmes and Balwani had raised hundreds of millions of dollars from billionaire investors such as media mogul Rupert Murdoch and the Walton family of Walmart and struck deals with Walgreens and Safeway to conduct blood tests in their stores. Those investments at one point valued Theranos at $9 billion, giving Holmes a $4.5 billion fortune—on paper—in 2014.

Evidence presented at the trial also revealed that Holmes had distributed financial projections calling for privately held Theranos to generate $140 million in revenue in 2014 and $990 million in revenue in 2015 while also turning a profit. A copy of Theranos' 2015 tax return presented as part of the trial evidence showed the company had revenues of less than $500,000 that year while reporting accumulated losses of $585 million.

Ellen Kreitzberg, a Santa Clara University law professor who has been attending the trial, said she thought the government had made a strong case.

"There's nothing sort of fancy or sexy about this testimony," she said. "The witnesses were very careful in their testimony. None of the witnesses seemed to harbor anger or a grudge against her. And so because of that, they were very powerful witnesses."

The 29 witnesses called by the government included former two Theranos lab directors who repeatedly warned Holmes that the blood-testing technology was wildly unreliable. Prosecutors also questioned two part-time lab directors, including Balwani's dermatologist, who spent only a few hours scrutinizing Theranos' blood-testing technology during late 2014 and most of 2015. As Holmes' lawyers noted, the part-time lab directors were allowed under government regulations.

Other key witnesses included former employees of Pfizer, former Safeway CEO Steve Burd and a litany of Theranos investors, including a representative for the family investment firm of Betsy DeVos, the former education secretary under President Donald Trump. The DeVos family wound up investing $100 million.

It was perhaps just as notable whom the government didn't summon to the stand from the list of nearly 200 potential witnesses that it submitted before the trial began. That list included two former Theranos board members who were part of Presidential cabinets—Henry Kissinger, secretary of state during the Nixon administration, and William Perry, secretary of defense during the Clinton administration.

Witness testimony and other evidence presented in the trial strongly suggest that Holmes misrepresented purported deals with major pharmaceutical firms such Pfizer and the U.S. military while also concealing recurring problems with Edison.

For the past three months, the former entrepreneur has sat stoically to the right of the jury that will determine her fate. Typically bolt upright in her chair and staring straight ahead, Holmes has remained impassive as even one-time supporters testified to their misgivings about her actions while leading Theranos.

Elizabeth Holmes, Theranos, Fortune Global Forum
Elizabeth Holmes' lawyers aren't saying whether or not the former Theranos CEO will take the stand in her own defense after the government rested its case Friday. Above, Holmes (left) and Alan Murray speak at the Fortune Global Forum at the Fairmont Hotel on November 2, 2015, in San Francisco, California. Kimberly White/Getty Images