Elizabeth Holmes asks for new trial again

Updated

Elizabeth Holmes filed new court requests Wednesday arguing she's entitled to a retrial, contending prosecutors unfairly characterized her relationship with co-defendant Ramesh “Sunny” Balwani as one of “equals.”

Holmes, who was convicted of defrauding investors in her blood-testing startup Theranos, also argued that prosecutors suppressed evidence that would have been favorable to her case.

The requests come just a day after Holmes’ first request for a new trial, based on post-trial statements that Theranos’ former laboratory director Adam Rosendorff — a star government witness — allegedly made suggesting he had regrets about his testimony in the high-profile trial.

In January, a San Jose jury convicted Holmes, 38, of four counts of fraud, each of which carries a maximum prison sentence of 20 years. She's due to be sentenced on Oct. 17. Balwani, 57, was also convicted of defrauding investors in a separate jury trial that ended in July and is scheduled to be sentenced in November.

Holmes’ latest arguments zero in on one of the most complicated dynamics in her defense: her 13-year romantic relationship with Balwani, Theranos’ long-time chief operating officer who was convicted on 12 counts of fraud.

Ramesh
Ramesh "Sunny" Balwani, former president and chief operating officer (COO) of Theranos and ex-boyfriend of founder Elizabeth Holmes, departs the courthouse during jury deliberations at his federal trial for wire fraud and conspiracy to commit wire fraud in San Jose, California, U.S. June 28, 2022. REUTERS/Brittany Hosea-Small (Brittany Hosea-Small / reuters)

The two were originally charged in a single indictment accusing them of conspiring to use the once high-flying blood-diagnostics startup to defraud investors and patients. However, presiding district court Judge Edward Davila granted Holmes an independent trial after she accused Balwani of subjecting her to years of physical and mental abuse — claims that Balwani denies.

Government's “decidedly different” Balwani approach

According to Holmes, the government played an unfair hand with her allegations that Balwani was controlling and influential on her actions during the time the two ran Theranos.

Her lawyers argue that prosecutors downplayed those claims to Holmes' jury to paint her as the dominant decision maker at the now-defunct company — then played up Balwani’s dominance at his later trial. According to Holmes, the government’s about-face qualifies as admissible and newly discovered evidence that warrants a new trial.

“At the end of [Holmes’] trial, the government argued to the jury that aspects of Holmes’ relationship with Balwani — in particular, his abuse during the conspiracy period — were not relevant to the charged offenses,” Holmes' filing states. The filing emphasizes a November 2014 message from Balwani to Holmes saying, “Awesome, U r listening and paying attention.”

Theranos founder Elizabeth Holmes  and her family leave the federal courthouse after attending her fraud trial in San Jose, California, U.S. January 3, 2022.  REUTERS/Brittany Hosea-Small
Theranos founder Elizabeth Holmes and her family leave the federal courthouse after attending her fraud trial in San Jose, California, U.S. January 3, 2022. REUTERS/Brittany Hosea-Small (Brittany Hosea-Small / reuters)

“At Balwani’s trial, the government took a decidedly different approach,” the filing claims.

That filing referred to the prosecution's closing arguments in Balwani's case.

“It’s no surprise that Balwani had a lot of authority,” a prosecutor told Balwani’s jury. “Besides his position that we talked about, you can also infer that his close relationship with Holmes would have given him a lot of influence over her, more than just his title alone would provide."

The prosecution went on to stress Balwani's age and experience compared to Holmes. "So it would be no surprise that his advice, his input would carry a lot of weight with her. And that’s what showed up in the text messages,” a prosecutor said.

Lawyers for Holmes argue that her jury would have had a better understanding of her youth and inexperience if they had heard this evidence. Within such a relationship, Holmes could not have committed the crimes charged — wire fraud and conspiracy — because her reliance on Balwani would negate the mental state required for those crimes, her lawyers said.

In still another filing, Holmes cites entirely separate grounds for a new trial that invokes a lower standard for the court to consider. According to Holmes, the government violated a well-established rule that requires prosecutors to turn over material evidence that favors the defense.

The former Theranos CEO alleges that prosecutors withheld emails exposing how prosecutors failed to preserve Theranos’ Laboratory Information System (LIS), a database that housed the company’s test failure rates, which she says would have benefited her case. According to Holmes, the government minimized the significance of the database at trial in order to inflate the anecdotal evidence of patients who testified about their inaccurate test results.

A hearing to address the motions for a re-trial is scheduled for Oct. 3.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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