Jury may hear limited evidence of CEO lifestyle

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

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

Jurors in Elizabeth Holmes’ trial will hear testimony about her extravagant lifestyle as CEO of Theranos, but with certain limitations.

That’s the ruling by U.S. District Court Judge Edward Davila on Saturday night as part of a 100-page response to motions in Holmes’ upcoming criminal trial.

The judge partially allowed Holmes’ request to exclude evidence referring to his extravagant lifestyle outside of his post as chief executive of the blood testing start-up.

“The government can present evidence that Holmes enjoyed a lifestyle as CEO of Theranos comparable to other CEOs of tech companies. This includes salary, travel, fame and other benefits and job-related benefits, ”Davila wrote on file.

However, “references to specific purchases or to details reflecting the brand of clothing, hotels or other personal items are irrelevant, and the detrimental effect of this evidence outweighs any probative value”, added the judge.

The move is a partial victory for Holmes as prosecutors cannot provide details of Holmes’ specific purchases and personal items outside of his role as CEO. Holmes lived in an expensive rental house, traveled by private jet, stayed in luxury hotels, and employed assistants paid by Theranos to organize his lavish shopping sprees.

“Anytime Holmes made an extravagant purchase, it is reasonable to infer that she knew her fraudulent activity enabled her to pay for these items,” Davila wrote. “While the benefits of these purchases are not as directly related to fraud … it may still be convincing to the scientist at Holmes.”

The decision comes two weeks after Holmes battled with prosecutors in court over whether details of her wealth, lifestyle and the benefits she had achieved as CEO would be relevant to jurors during the his trial.

At Theranos’ heyday, the startup was valued at $ 9 billion and Holmes was touted as the world’s youngest self-made billionaire. The company collapsed in 2018 following a Wall Street Journal investigation that revealed failures in blood testing technology.

Davila has spoken out on more than 20 duel motions over what jurors can hear in his trial, which is due to begin on August 30.

Davila rejected a government motion to admit text messages related to affairs between Holmes and his co-accused Ramesh “Sunny” Balwani.

Prosecutors say the messages show the two top executives knew how far Theranos was before he collapsed. In a November 2014 text to Holmes, Balwani describes a laboratory in Theranos as a “disaster area”, adding that he “would work to resolve this problem”.

Holmes and Balwani have both pleaded not guilty to a dozen criminal wire fraud charges relating to deceptive investors, patients and doctors.


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