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Elizabeth Holmes testifies about alleged sexual and emotional abuse at fraud trial

Elizabeth Holmes, center, leaves federal court in San Jose, Calif., on Nov. 22. The one-time medical entrepreneur now charged with building a fraudulent company based on promises of a revolutionary technology returned to the witness stand Monday.
Nic Coury
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Elizabeth Holmes, center, leaves federal court in San Jose, Calif., on Nov. 22. The one-time medical entrepreneur now charged with building a fraudulent company based on promises of a revolutionary technology returned to the witness stand Monday.

Elizabeth Holmes was the victim of sexual abuse and was regularly berated verbally by her former romantic and business partner while she ran the blood-testing company Theranos, she testified to the jury in her fraud trial on Monday.

At times, the former Theranos chief executive dabbed her eyes with a tissue and spoke haltingly on the witness stand that Ramesh "Sunny" Balwani – the company's No. 2 executive — exerted control over her by disparaging her and forcing her to have sex with him.

In court papers, her lawyers have argued that the alleged abuse interfered with Holmes' ability to think clearly during the time of the crimes charged by federal prosecutors.

She said he planned out her diet in order to keep her "pure," and that he would chastise her when he perceived that she lacked confidence or focus.

Balwani, who is also charged with fraud and faces a January trial, has denied the allegations through his attorney.

"He told me that I didn't know what I was doing in business, that my convictions were wrong, that he was astonished at my mediocrity," Holmes said during her fourth day of testimony.

Holmes grew emotional recounting how being raped as a student at Stanford led her to drop out of the school. For her, the best way to process the trauma was to turn Theranos into her indefatigable passion and obsession, she told the jury.

Not long after she left Stanford, the now 37-year-old struck up a romantic relationship with Balwani, who is nearly 20 years her senior.

"He said I was safe now that I had met him," Holmes said.

Over time, Holmes said she realized she was being manipulated and abused by Balwani. He once told her that she had to "be more like a man if I wanted to be in business," she testified.

Holmes told the jury that Balwani wanted her to "kill the old Elizabeth," which she said meant to "kill" the person who could never succeed in life or business.

"He had taught me everything I thought I knew about business, and he was the best business person that I knew," Holmes said. "I didn't question him in the way that I otherwise would have."

The explosive allegations against Balwani have been expected, since legal filings were unsealed in August describing a pattern of physical and emotional abuse Holmes allegedly suffered over a nearly decade-long romantic relationship with Balwani.

But Monday represented a stunning turning point in the trial, the first time the accusations were heard directly by the jury that will determine her fate.

Federal prosecutors have charged Holmes with 11 counts of wire fraud and conspiracy to commit wire fraud over the collapse of biotech startup Theranos. Once valued at $9 billion on promises of revolutionizing the health care industry, the company buckled under scrutiny from the media and government regulators.

According to the indictment against Holmes and Balwani, the two lied to investors about the company's technology being groundbreaking to land incredible sums of money and misled patients by providing flawed or false blood test results.

Holmes taking the witness stand has been the most-anticipated testimony of a trial that has stretched on for 13 weeks.

Persuading the jury to unanimously agree that Holmes acted intentionally will be pivotal to securing a conviction. But she has spent days on the witness stand attempting to prove the opposite.

She has suggested that other Theranos employees, including lab scientists and Balwani, were closest to some of the more troubling facets of the company.

Holmes did, however, admit in earlier testimony that she had personally added the logos of pharmaceutical companies to documents sent to potential business partners and investors that validated Theranos' technology, despite never having permission from the companies. It was, Holmes admitted, an ill-advised move that she now regretted.

On Monday, Holmes told the jury that around May 2016 Balwani left Theranos in the wake of a lab inspection from regulators that raised concern about the company's standards. At that point, Holmes severed her romantic relationship with him and moved out from the home they shared.

"He wasn't who I thought he was," Holmes testified. "And I realized if I was going to fix its issues and see the company through its potential I had to do that at the company without him."

Federal prosecutors are set to cross-examine Holmes on Tuesday.

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