SAN JOSE (KPIX 5) — Federal prosecutors grilled Theranos founder Elizabeth Holmes Tuesday on claims that her failed startup’s technology was being deployed by military doctors in war zone field hospitals, as well as revenue projections of nearly $1 billion for 2015.
Once a darling of the Silicon Valley’s tech community, Holmes now faces 11 federal charges of defrauding investors and patients with false claims on the accuracy and success of her company’s blood testing technology.
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If the jury finds her guilty, she could be sentenced to 20 years in prison and be ordered to pay a $2.75 million fine.
Holmes took the stand in her own defense for a sixth day and Assistant U.S. Attorney Robert Leach wasted little time during his cross examination, boring in on discrepancies between her testimony and that of others.
Leach recounted the testimony from several witnesses including Safeway Inc. CEO Steven Burd and investors Lisa Peterson and Brian Grossman who claimed they were led to believe Theranos devices were being used by the U.S. military doctors on the battlefield.
“Theranos devices were never used for clinical care for soldiers correct?” Leach asked.
“Correct,” Holmes answered.
Leach then named off five previous witnesses who testified Holmes told them or led them to believe that the devices were being used by the military in medevac units or war zones. Leach asked Holmes if that’s what she told them.
“I don’t think so,” Holmes replied.
“I think it’s very significant, it’s very damaging,” said Michele Hagan, a former prosecutor and legal analyst who’s following the trial. “It goes to her credibility, it impeaches her credibility and makes it look like she is intending to deceive people and that’s exactly what the prosecution is alleging.”
Leach also asked Holmes about revenue projections of nearly $1 billion shown to Peterson, who is a representative for the DeVos family, who did invest in the startup.
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Holmes said the figure came from a financial model that was discussed, but said she didn’t think she was the one who discussed it with them.
Leach also asked her about 2014 a Fortune magazine cover story for which she gave exclusive interviews to Roger Parloff and then shared the published article with investors. The article stated that Theranos did not use 3rd party analyzers, which gave them an advantage.
“That was not true?” the prosecutor asked.
“Correct,” Holmes answered.
The federal prosecutor asked her about an email sent to Theranos shareholders that included the Fortune article. She said she had no memory of such an email.
Leach then showed the email to the jury.
“I think I could have handled those communications differently,” Holmes told the jury.
“[The jury is] getting to see who she is,” Hagan said. “They’re getting to see how she answers these questions. It’s putting Elizabeth Holmes in the corner, it’s her testimony to the jury versus the 29 witnesses who came in and testified for the prosecution.”
Holmes will be back on the witness stand for friendlier questioning from her own lawyers on Wednesday. The defense says it will look at transcripts before deciding if it will call any other witnesses.
The morning session was also disrupted briefly twice by cell phones ringing among the spectators gathered in the courtroom. Both times the phones owners were told to leave.
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Len Ramirez contributed to this report.