Theranos Trial: Tears Flow As Elizabeth Holmes Talks Of Fractured Love Affair With Sunny Balwani
SAN JOSE (KPIX 5) -- Under a grueling cross examination by federal prosecutors, Theranos founder Elizabeth Holmes quietly sobbed on the witness stand Tuesday as she recounted her fractured love affair with co-defendant and former boyfriend Sunny Balwani.
The two have been charged with fraud as they pitched Theranos and its blood testing technology to investors. Once a darling of the Silicon Valley's start-up community, Holmes is facing 11 federal charges of defrauding investors and patients with false claims.
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.
On Monday, Holmes said she met Balwani when she was 18 and that he mentored her in business. The two later had a live-in romantic relationship.
She went on to tell the jury that Balwani became controlling, told her how to act, to be more masculine to succeed in business and would sometimes force her into sex.
Holmes said she took detailed notes of abusive episodes on her phone, which was shown to the jury.
On Tuesday, prosecutors asked her about dozens of text messages between the pair -- who are being tried separately -- concerning decisions about the business positioning of the company and also about their personal relationship.
Holmes testified that she ended the 10-year romantic relationship with Balwani, telling the court: "My whole foundation for life, what I believed in, the devotion to the company, was based on believing that he was this person that he conveyed himself to me."
Prosecutor Robert Leach told Holmes that the word love appears 594 times in the prosecution's collection of 12,000 text messages.
Moments later she began to tear up when Leach asked her to read text messages to Balwani aloud. Both texts were expressing love and affection. Holmes wiped away tears and barely able to speak.
"So that's undermining a potential defense that there was an abusive relationship," former prosecutor and legal analyst Michele Hagan told KPIX 5.
The prosecutor also showed the jury a picture of the Atherton mansion Holmes and Balwani bought together. Holmes said it was where they lived and would entertain Theranos employees.
The messages also showed the pair often discussed business over texts.
Prosecutors aimed to show that Balwani put Holmes on notice about problems in the lab, the need to generate more money and his concern that the company's false claims of doing any blood test from a finger stick of blood were a big concern.
"Part of conspiracy is to show that two people are working together, so the prosecution is illustrating how the two of them had plans together, had goals together and talked about the problems," Hagan said.
The prosecutor then confronted Holmes about how she put a Pfizer logo on validation documents to help seal a deal Walgreens to set up wellness centers in stores. Holmes admitted that she had no deal with Pfizer and had no authorization from anyone at the company to use their logo.
Earlier in the day, Holmes was grilled over her reaction to John Carreyrou's reporting in the Wall Street Journal. Carreyrou reports about the company's failing blood test technology began Theranos' tumble and collapse.
Leach produce an email Holmes sent to WSJ owner Rupert Murdoch looking to quash the Journal's reporting.
"I couldn't say it more strongly: The way we handled the Wall Street Journal process was a disaster," Holmes testified. "We totally messed it up."
Leach also delved into Holmes dealings with the late George Shultz and his grandson Tyler, who worked at Theranos and became concerned over the failures with the technology.
The former Secretary of State was a member of the Theranos board. In a scene recounted in Carreyrou's best-selling novel, Tyler was confronted in his grandfather's living room by Theranos attorneys who threatened legal action if the younger Shultz continued to be a whistleblower.
The incident fractured the relations between the Shultzs that remained in place at the time of George Shultz's death.
Len Ramirez contributed to this report.