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 Opening Statements in Holmes’ Fraud Trial 

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Michael Santos

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Is Elizabeth Holmes a fraudster or a well-meaning visionary who got in over her head? Trial opening statements set the stage for the battle.


After years of anticipation, intense media coverage, and multiple documentaries and books, the prosecution and defense finally delivered their opening statements to the jury in the criminal fraud trial of Elizabeth Holmes. 

Learn about how the criminal justice system works by following our blog at We are providing regular updates on the Holmes criminal fraud trial.


Holmes is the former founder and C.E.O. of the Silicon Valley blood-testing start-up Theranos. She is on trial accused of leading a massive fraud, lying to investors, patients, doctors, and the public about her company’s blood-testing technology. 

Specifically, the government seeks to convict Holmes on two counts of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and ten counts of wire fraud, in violation of 18 U.S.C. § 1343. If convicted, Holmes faces 20 years in prison on each count.


In a criminal trial, prosecutors and defense counsel have the right to address the jury before hearing the evidence. These are the opening statements. 

The purpose of the opening statements is to outline the facts that the jury will hear during the trial. Each side gets an opportunity to set the scene for the jury and provide a general road map of how the evidence at trial will unfold. Each side lays out who their witnesses will be and summarize the evidence that the party intends to offer during the trial.

Typically, the prosecution goes first to present its opening statements, then the defense responds. Often, the prosecution also gets a chance to deliver a rebuttal. 

The prosecution goes first and gets an opportunity for rebuttal because it bears the burden of proof in a criminal case to prove its allegations beyond a reasonable doubt. The prosecution bears the burden of proof because, based on the protections of the U.S. Constitution, a criminal defendant is presumed innocent. 

*Pro-Tip: Burden of proof describes “the standard that a party seeking to prove a fact in court must satisfy to have that fact legally established.”

What does it mean to prove guilt “beyond a reasonable doubt?” 

Proof beyond a reasonable doubt is the highest burden of proof applied in any legal proceeding because of the high stakes: a defendant’s very freedom is at issue. To establish guilt beyond a reasonable doubt requires that, after considering all the evidence, the jury can only come to one conclusion: that the defendant is guilty. A criminal defendant bears no burden of proof.

Twelve people compose the jury hearing the case, and they are a diverse group. Gender-wise, the Holmes jury consists of seven men and five women. The jury panel includes six Caucasians, four Hispanics, and two Asians. Age-wise, the jurors’ ages range from 19 years old to mid-’60s.


During the prosecution’s opening statements, the prosecution repeatedly called Elizabeth Holmes “a liar and a cheat.”

AUSA Robert Leach told a jury of seven men and five women that in 2009, when Theranos ran out of money, Holmes knowingly set out to mislead investors to keep the company afloat. 

“Out of time, out of money, Elizabeth Holmes decided to lie,” Leach said. “After years of making promises it couldn’t keep,” Theranos and Holmes “turned to fraud to keep money coming in the door.” 

Holmes was a prolific fundraiser, ultimately bringing in over $700 million in investor capital for her company. 

The government emphasized Holmes’ hands-on role as Theranos C.E.O., arguing that she knew they were lying. Leach pointed out that Holmes was the face of Theranos and oversaw everything about the company. All throughout, Holmes showed no qualms about lying to investors like Walgreens and Safeway with her false claims. 

“She owned it, she controlled it, the buck stopped with her,” Leach told the jury. “And as you’ll hear from insiders, she was not an absentee C.E.O. She was there all the time. She sweated the details. She was in charge.”

“The defendant’s fraudulent scheme made her a billionaire,” Leach said. “At one point, her stock in Theranos was worth billions. The scheme brought her fame, honor, and adoration.”

Prosecutors recounted that in 2013, Theranos again was low on cash; it had only $13 million in cash left, and the company was “burning through $1 million to $2 million per week.” At that point, Holmes and her co-defendant and boyfriend, Sunny Balwani, raised hundreds of millions of dollars from investors by hyping the company’s technology in interviews with the press.

Anticipating one of Holmes’ possible defenses, that she was under the spell and control of Balwani during the alleged fraud, prosecutors told the jury that Holmes became a powerful force in business, associating with influential people. Prosecutors told jurors how she was on the cover of Fortune and Forbes magazines, appearing on television news programs, and even hailed as the next Steve Jobs, her idol. 

“She was touted as one of the most powerful women in business. She was. . . .one of the most celebrated C.E.O.s in Silicon Valley and in the world,” Leach said. 

But, according to prosecutors, Theranos’ success was all a carefully crafted facade. 


The defense focused on three main themes for its opening statement: 

  • A company’s failure is not a crime;
  • Holmes could not defraud Theranos’ investors; and
  • Balwani is responsible, not Holmes.

Failure is Not a Crime

Defense lawyers will focus on the reasons for Theranos’ failure having nothing to do with fraud. In opening statements, defense lawyers stated that Theranos was “an innovative company with proprietary technology and failed because of complicated reasons” unrelated to fraud.

“Yes, Theranos failed,” Lance Wade told jurors. “But it wasn’t because of fraud. The reality is far more human and real, and oftentimes, I hate to say it, technical and complicated and boring.”

“The company’s science and innovation received 176 patents, valued at hundreds of millions of dollars. Its customers took actual blood tests that were cheaper than the competition,” the defense said.

 She “made mistakes, but mistakes are not crimes,” adding that “a failed business does not make a C.E.O. a criminal. Ms. Holmes did not go to work every day intending to lie, cheat and steal.”

“Ms. Holmes walked away with nothing,” Wade told the jury. “But failure is not a crime. Trying your hardest and coming up short is not a crime.” Holmes was so committed to Theranos that she never sold a single share.

Theranos’ Investors Knew or Should Have Known the Risks

In fraud cases, it is a common defense strategy to say that the allegedly defrauded parties knew or should have known what they were getting into. Holmes will rely on this strategy. 

Prosecutors claim Theranos defrauded investors by overstating revenue projections and lying about the state of the company’s technology. The comeback will be that “to invest in Theranos, you needed to be a multimillionaire. In many cases, they were billionaires, some of the most wealthy, sophisticated people in the world,” Wade said. “They were sophisticated, and they knew what they were buying.”

Theranos raised more than $700 million from investors, some of whom will testify for the prosecution at trial.

“Investors knew the risks of sinking money into an untested Silicon Valley start-up. . . These were sophisticated people, and they knew what they were buying.” Moreover, they knew that “Theranos had no clearance from the U.S. Food and Drug Administration for its technology.” 

The implication is that these investors were not victims of fraud.

Blame Balwani

The defense points to Holmes’ allegedly abusive relationship with Balwani, laying the groundwork to blame him for her fraudulent conduct. 

“You’ll hear that trusting and relying on Mr. Balwani as her primary adviser was one of her mistakes,” Wade said, pointing out their age difference and how young Holmes was (18) when she met Balwani (37). Even worse, Balwani is temperamental, and Holmes was afraid of him lashing out, Holmes’ lawyer stated. Balwani would “lash out” at everyone. “He did not always treat people kindly.”

The defense asked jurors to wait for all of the evidence before deciding how to fairly view that relationship in total. Balwani is not present at this trial. The Judge allowed Holmes and Balwani to have separate trials. Absent an unanticipated cooperation agreement, Holmes’ jury will not hear from Balwani or his lawyers about her accusations.

Finally, as far as Theranos’ fraudulent and misleading lab work, the defense noted that only a tiny fraction of Theranos’ blood tests were inaccurate. The company conducted 8 million tests. After years investigating Theranos, the government only found around 20 inaccurate tests, a number he told jurors was 0.00025% of the total.

The defense had to admit that Theranos’s clinical lab had issues and that people didn’t follow processes and procedures. The evidence on that will be overwhelming. But, Wade noted that “no lab wants any of its tests to be inaccurate” and tried to distance Ms. Holmes from any lab problems. 


The battle lines are drawn. Opening statements in the Elizabeth Holmes criminal fraud trial focused on the failures of Theranos’ blood testing technology, one side claiming it was a fraud and the other claiming that business failure is not a fraud. Prosecutors will focus their case on Elizabeth Holmes’ competence and drive, among other things, to prove that Theranos knowingly misled investors, patients, doctors, and the general public. They will also focus on the failures of Theranos’ technology.

The defense strategy admits the well-known failures, but failure at a speculative biotech start-up is far different from criminal fraud. Theranos’ sophisticated investors were not under any illusions and fully understood the risks of investing in this company. Regardless of the company’s mistakes, Holmes worked hard and in good faith. Balwani’s influence and control hampered Holmes’ judgment, but she is not a fraudster.

Follow the Prison Professors blog for regular updates on Holmes’ Silicon Valley fraud trial.

Prison Professors, an Earning Freedom company, works alongside (not in place of) civil and criminal defense counsel to help clients proactively navigate through investigations and prosecutions. Our team also helps clients prepare mitigation and compliance strategies.

If you have any questions or are uncertain about any of the issues discussed in this post, schedule a call with our risk mitigation team to receive additional guidance.

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