Elizabeth Holmes trial: Loving texts from Holmes to ‘abuser’ Balwani as they hunted leakers

Theranos founder Elizabeth Holmes, who has accused her fallen startup’s president of coercing and abusing her amid their long love affair, sent him adoring text messages as the pair hunted leakers ahead of a damning media exposé, a court filing this week revealed.

“You are breeze in desert for me,” (sic) said one text from Holmes to Sunny Balwani released by federal government lawyers prosecuting her fraud trial in U.S. District Court in San Jose. “My water. And ocean. Meant to be only together tiger.” Another text from Holmes to Balwani said, “Madly in love with you and your strength.”

Earlier court filings contained allegations by Holmes that Balwani, with whom she had a lengthy relationship that spanned most of Theranos’ existence, imposed on her a “pattern of abuse and coercive control” and sexually abused her. Holmes’ legal team plans to introduce testimony from a psychologist specializing in relationship trauma who according to a court filing will discuss a mental condition of Holmes that they claim affects the “issue of guilt.” Another filing refers to her “potentially debilitating” symptoms of post-traumatic stress disorder. Balwani, in a court filing, has said he “categorically denies Ms. Holmes’ allegations.”

The loving texts came in 2015, a few months before the 12-year-old Palo Alto blood-testing startup would be rocked by a Wall Street Journal report questioning its technology. Holmes and Balwani appear in the messages to be responding to inquiries made by Journal reporter John Carreyrou.

Seconds after an exchange that saw Holmes tell Balwani, “Missing you” and Balwani responding, “Missing u too,” Balwani tells her he’s narrowed down the pool of potential leakers in Theranos’ laboratory to five people. “Will nail this mother (expletive),” Balwani wrote.

Holmes and Balwani — who will be tried separately — are accused of 12 counts of felony fraud. Federal prosecutors allege they bilked investors out of hundreds of millions of dollars, and misled patients and doctors, with false claims that their company’s machines could conduct a full range of tests on just a few drops of blood. The two have denied the allegations.

SAN JOSE, CALIFORNIA – JUNE 28: Former Theranos COO Ramesh “Sunny’ Balwani leaves the Robert F. Peckham U.S. Federal Court on June 28, 2019 in San Jose, California. Former Theranos CEO Elizabeth Holmes and former COO Ramesh Balwani appeared in federal court for a status hearing. Both are facing charges of conspiracy and wire fraud for allegedly engaging in a multimillion-dollar scheme to defraud investors with the Theranos blood testing lab services. (Photo by Justin Sullivan/Getty Images)

Holmes’ trial started this week with opening arguments, but a hearing Friday was delayed until Tuesday “out of an abundance of caution,” according to the court, after a juror said he may have been in contact with someone with COVID. “The juror is vaccinated, is not showing symptoms, and has worn a mask and maintained social distancing throughout jury selection and trial proceedings,” a court notice said. “The juror is awaiting COVID-19 test results.”

The text messages show Holmes and Balwani identifying three people they believed were leaking information, including employees Tyler Shultz — the grandson of the late U.S. Secretary of State George Shultz — and Erika Cheung, both of whom were later revealed to be whistleblower sources for Carreyrou. Prosecutors also filed documents indicating Theranos made $150,000 in payments to private investigators soon after the messages about Shultz and Cheung, to pay for what Theranos called the “E. Cheung & T. Shultz project.”

Carreyrou’s reporting would lead to the demise of the startup and criminal charges against Holmes and Balwani, but Balwani at the time expressed optimism. “This one is fairly easy to get ahead of,” he wrote in one message to Holmes. “So easy to knock legs off of. And we will also take legal action once this is behind us.” Holmes appeared to agree, responding, “Legal likely.”

The messages also touch on a contentious issue in the case, of Holmes’ lifestyle as a high-flying technology CEO. In response to defense-team concerns that detailed information about Holmes’ spending could prejudice the jury against her, Judge Edward Davila banned prosecutors from telling the jury about “specific purchases or details reflecting branding of clothing, hotels, or other personal items.” Balwani in a message to Holmes informed her that his flight had been delayed, and he said he should have taken a private jet. “Always do in future,” Holmes responded.

Holmes, who recently gave birth, is expected to be on trial for three months. She faces up to 20 years in prison if convicted.

 

Startups News