Unsealed court filings in the criminal case against Elizabeth Holmes reveal that her lawyers have been preparing a defense that the Theranos Inc. founder suffered “a decade-long campaign of psychological abuse” at the hands of Ramesh “Sunny” Balwani, her former romantic partner and president of the company. Holmes is facing up to 20 years in prison on charges that the blood-testing startup she created and led as chief executive officer was a massive fraud. Her lawyers told the court last year that they expect her to testify in her defense in a trial that’s scheduled to begin with jury selection on Aug. 31. Holmes was charged alongside Balwani, but their trials were separated by a judge, with the reasoning kept under seal until Saturday. Holmes suffered from post-traumatic stress disorder, depression and anxiety as a result of her relationship with Balwani, according to the filings. Her lawyers said they plan “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,” according to one of the filings, unsealed after midnight by a federal judge in California. Among the allegations: Balwani engaged in conduct including “monitoring her calls, text messages and emails; physical violence, such as throwing hard, sharp objects at her; restricting her sleep; monitoring her movements; and insisting that any success she had was because of him.” Balwani adamantly denied these allegations, according to a court document. He asked the court to sever their trials because “Ms. Holmes’s evidence seeking to establish her innocence would require him to defend against not only the government’s case, but to defend against her allegations as well because her allegations are so inflammatory that they cannot be left unrebutted before the jury.” His lawyers argued that “it will be impossible for him to receive a fair trial if this evidence is admitted in a joint trial.” The judge agreed to separate the trials. Mark MacDougall, a former federal prosecutor, now a white-collar criminal defense lawyer in Washington, said Holmes’s narrative “could be pretty powerful” at trial. “I think the defense has the opportunity to point to the empty chair in the courtroom that would’ve been occupied by Sunny,” MacDougall said. Holmes’s lawyers must lay the groundwork to make the case that her behavior implicated in the alleged fraud “was a function of emotional and mental pressures,” he said, noting the circumstances that she was in her twenties, under the enormous stress of running a startup, and living with the much older president of Theranos. The upshot of the argument would be that while suffering from trauma “she didn’t form the fraudulent intent needed to prove the crime,” MacDougall said. ‘Unable to Concentrate’ Holmes’s lawyers told the court that “as a result of Mr. Balwani’s abusive treatment of her she suffers from Intimate Partner Abuse syndrome (“IPA”) and concurrent post-traumatic stress disorder (“PTSD”) such that she cannot be near him without suffering physical distress,” according to a filing. “She argues that if she is tried together with Mr. Balwani, she will likely suffer stress and physical ailments that will manifest visually such that she will not appear to the jury in her true sense. She also asserts that there is a risk she will be unable to concentrate in her case and will thus be unable to assist and participate in her defense.” In the discussion about her mental-health defense, her counsel told the judge it “was highly likely Holmes would testify” about the conduct. According to the judge’s ruling severing the two cases, “Ms. Holmes’s counsel emphasized that it was unusual for a defense attorney to so reveal a client’s intention to testify in a criminal case, but he felt confident in doing so in this case. This statement was quite profound and meaningful to the court.” Holmes is scheduled to start trial Tuesday in San Jose, California, on fraud and conspiracy charges for allegedly lying to doctors, patients and investors about the accuracy and capabilities of her company’s machines to perform hundreds of tests for disease using a small sample of blood. Read More: Theranos Ex-CEO’s Defense Signals She’ll Be Cast as Victim U.S. District Judge Edward Davila on Thursday ordered the filings unsealed over the objections of lawyers for Holmes and Balwani. Holmes’s lawyers sought to delay public disclosure of the documents until after jury selection, arguing the details of the filings will produce a frenzy of news that risks biasing jurors selected for the panel. Lance Wade and Kevin Downey, lawyers representing Holmes, didn’t respond to an email seeking comment. Balwani’s lawyer, Jeffrey Coopersmith, didn’t respond to an e-mailed request for comment. The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Jose).
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