Unsealed documents in the high-profile case that begins with jury selection Aug. 31 include accusations against Ramesh “Sunny” Balwani of “essentially dominating her and erasing her capacity to make decisions.” Former Theranos chief executive Elizabeth Holmes is likely to argue in her criminal trial that abuse by her ex-boyfriend, who was the company’s president, rendered her incapable of making her own decisions, according to documents unsealed in the case early Saturday morning. Holmes, who started Theranos when she was a 19-year-old student at Stanford University, is charged with 10 counts of wire fraud and two counts of conspiracy to commit wire fraud for allegedly defrauding investors and patients in connection to her failed blood-testing firm. Jury selection is scheduled to begin on Aug. 31, with the trial starting Sept. 8. The unusual defense strategy in one the highest-profile corporate trials in years offers clearer details on how Holmes plans to frame the implosion of a company that was once one of the industry’s start-up darlings. Holmes graced magazine covers and regularly appeared on business television programs while Theranos took in hundreds of millions of dollars from household-name investors such as Rupert Murdoch and Betsy DeVos. But her fall, after a 2015 Wall Street Journal investigation showed the company’s technology was unreliable, led to the many claims of fraud. Several of the newly unsealed documents relate to the successful efforts by Holmes’s ex-boyfriend, Ramesh “Sunny” Balwani, to separate his trial from hers. Holmes’s plans to argue intimate partner violence as a defense would prevent him from receiving a fair trial if the cases were joined, Balwani’s lawyers argued in the documents. One unsealed Balwani filing from February notes the strategy: “Ms. Holmes plans to introduce evidence that Mr. Balwani verbally disparaged her and withdrew ‘affection if she displeased him’; controlled what she ate, how she dressed, how much money she could spend, who she could interact with — essentially dominating her and erasing her capacity to make decisions.” Holmes’s lawyers introduced the possible defense in December, noting that it might call an expert witness to testify about “whether and how Ms. Holmes’ relationship with Mr. Balwani was consistent with intimate partner abuse,” and also attest to “Ms. Holmes’ particular vulnerability to an abusive relationship.” In a separate filing, Holmes’s lawyers note that it is “highly likely” Holmes will introduce evidence of “intimate partner abuse.” Holmes’s filings provide some detail into her allegations of abuse. She alleges that Balwani monitored her calls, texts and email messages, that he threw “hard, sharp objects” at her, and that he restricted her sleep and monitored her movements, among other charges. In his legal response, Balwani’s lawyers disputed Holmes’s abuse claims, arguing they are “deeply offensive to Mr. Balwani, devastating personally to him, and highly and unfairly prejudicial to his defense of this case.” The filings also answer a question about which has been widely speculated, whether Holmes will testify in her own defense, something that often is a perilous legal strategy because it opens a defendant up to cross-examination by prosecutors. The apparent answer is yes. “Ms. Holmes is likely to testify herself to the reasons why she believed, relied on, and deferred to Mr. Balwani,” according to one of her legal filings in February. Court documents had previously indicated that Holmes was evaluated by a psychologist who specializes in violence against women and interpersonal violence, leading to speculation that her attorneys could mount a so-called “mental defect” defense. The government also asked, and was granted, the chance to have Holmes evaluated by medical professionals they appointed. The documents were unsealed after a lawyer for Dow Jones, the parent company of the Wall Street Journal, asked the court to make them public. Balwani’s lawyers opposed the unsealing, and Holmes’s lawyers asked the judge to wait longer before making them public. Balwani was initially charged with Holmes, but the two later had their cases separated. His trial is scheduled to begin in January. The unsealed documents also show that Balwani requested to be tried first. And they show that the government opposed severing the trial. Theranos attempted to develop miniature lab technology, which sometimes was called the “Edison," that could quickly and inexpensively run hundreds of tests from just a couple of drops of blood collected after pricking a finger. But investigations led by reporting from the Journal revealed severe dysfunction within the young company and technology that was erratic and unreliable. Theranos was actually using traditional lab equipment, made by outside companies, to run most tests, the Journal’s reporting showed. And scientists within the company were uneasy about how often the company’s machine seemed to give unreliable results. Holmes launched Theranos in 2003 and grew it to about 800 employees and a valuation of $9 billion before it ultimately collapsed in 2018. In a chaotic period after the Journal’s bombshell reports were published, partners including Safeway and Walgreens dissolved deals with the company. The Centers for Medicare and Medicaid Services, which oversees clinical labs, found deficiencies at the company’s lab. Theranos eventually settled with the agency and agreed not to operate any clinical labs for two years. Holmes also settled with the Securities and Exchange Commission over fraud allegations, and was barred from serving as a director or officer of a public company for a decade. Judge Edward J. Davila, of the federal court in the Northern District of California, said during a hearing Thursday that he thought it wise to unseal the documents before potential jurors are brought in to be questioned next week. That way, lawyers could ask them if they had seen any recent media coverage of the case, he said. Holmes’s lawyers had asked that the unsealing be delayed until after jurors had been chosen and directed not to read media items.
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