Jury Selection Begins In Trial Of Therano's Ramesh 'Sunny' Balwani; Will Elizabeth Holmes Testify
SAN JOSE (CBS SF/BCN) – Jury selection was set begin Wednesday in the federal fraud trial of former Theranos President Ramesh "Sunny" Balwani, but the biggest question in the case will be answered in the coming days -- Will convicted cofounder Elizabeth Holmes take the stand to testify against her ex-lover.
Holmes is awaiting sentencing after a jury found her guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud against investors at a January trial.
The jury acquitted Holmes of four counts related to wire fraud against patients. The jury did not reach a verdict on three additional counts of wire fraud against investors, and the government ended up dismissing those charges.
One of her key defenses was claims that Balwani abused her and coerced her into her illegal behavior.
Holmes's sentencing has been put off until Sept. 26. She remains free on bond.
Opening statements are scheduled for March 15 in Balwani's trial, with the proceedings expected to last up to 13 weeks.
Balwani served in various roles at Theranos, including president, chief operating officer and a board member, from September 2009 through 2016.
The indictment charges that Balwani, along with Holmes, falsely told investors that the company's proprietary Edison machines could perform a full range of clinical blood tests based only on a finger stick's worth of blood; that the partnership with Walgreens that put Theranos "Wellness Centers" in Walgreens stores beginning in 2013 was rapidly expanding, when in fact the rollout had stalled because of Theranos' poor performance; and that the company was financially stable and would make huge profits in 2014 and 2015.
Balwani is also accused of deceiving investors by conducting misleading demonstrations of the technology at the company's headquarters and by telling them that the company had an ongoing and profitable relationship with the military.
Like Holmes, Balwani is charged with deceiving patients by mispresenting the blood-testing technology as fast, accurate and cheap, even while knowing that the testing was not capable of producing reliable results.
Given the length of the Holmes trial, U.S. District Judge Edward Davila and the lawyers took steps in pre-trial proceedings to anticipate jury issues that could come up. up before. Six alternate jurors, in addition to the 12 that will initially sit on the jury, will be selected -- one more than in the Holmes case.
The Holmes jury lost three jurors in rapid succession near the beginning of the trial, raising the risk that a mistrial would have to be declared before the case could get to the jury.
This time around, the trial will also start out with slightly longer hours -- 9 a.m. to 3 p.m. on Tuesdays, Wednesdays and Fridays -- with the idea that the jury may be asked to come in on some Mondays and Thursdays as well.
The Holmes trial started out with the same three-day schedule but allowed jurors to go home at 2 p.m. After a number of delays caused by broken water mains, malfunctioning technology, holidays and lengthy witness examinations, the court extended the hours to as late as 4 p.m., with the jury sometimes asked to come in four or five days a week.
The Balwani defense is also trying to change substantive aspects of the trial by fighting evidence that came in against Holmes, including testimony and exhibits showing that Theranos also conducted blood tests on commercially available analyzers rather than on its own devices.
Prosecutors in the Holmes case frequently brought out this evidence as another key fact that Holmes did not disclose to investors or patients.
In a lengthy written order issued, Davila denied Balwani's motion to exclude the evidence, ruling that the indictment "puts Balwani on notice that the scheme to defraud patients includes Theranos' use of unmodified conventional analyzers."
The judge deferred ruling on a defense request to keep out damning evidence that, after problems with Theranos' results came to light, a new lab director ordered that all of the results from tests performed on Theranos devices be voided.
Much of the court's 51-page order simply adopts the evidentiary decisions that were made during the Holmes trial.
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