Elizabeth Holmes said she was the ‘ultimate decision maker’ at Theranos in 2017 deposition as her defense team argues the opposite in criminal trial


If Elizabeth Holmes testifies in her own criminal trial, videotaped depositions may be a clue of how she’ll fare on the stand.

Twelve days after she was indicted on fraud charges, Holmes, the CEO and founder of Theranos, sat for a nearly four hour deposition in which she hardly answered any questions. But in the depositions, which were part of a lawsuit and an SEC investigation into the company, Holmes did say she was the ultimate decision-maker at Theranos, a theme her legal defense team is trying to downplay in her criminal trial.

The June 27, 2018 videotaped deposition, obtained by CNBC, was in connection with a late stage investor lawsuit against Holmes, her blood-testing firm Theranos and company president Ramesh “Sunny” Balwani.

“I’m going to follow my counsel’s instruction,” Holmes repeatedly told attorney Reed Kathrein, who represented the investors who sued Theranos, in Berkeley, Calif.

“She was one of the calmest witnesses I’ve ever had,” Kathrein told CNBC in an interview earlier this week. “Of course, she didn’t answer any questions, but I’ve never seen someone keep the composure, the steadiness and the eye contact the entire time. Even while I’m making some pretty harsh accusations, she never broke into a sense of anger.”

That investor lawsuit was settled. While the terms were kept confidential, Kathrein said his clients were paid back the money they invested.

In the deposition, Holmes wouldn’t even acknowledge that it’s her when she is shown her October 2015 appearance on CNBC’s “Mad Money.”

As prosecutors wind up their case in the next few weeks, the looming question is whether Holmes will take the stand in her own defense.

Her lawyers have signaled that she intends to accuse Balwani, her former boyfriend and top executive, of controlling and manipulating her. Unsealed court filings allege Holmes claims Balwani sexually and emotionally abused her, which she claims impaired her judgement at Theranos.

Balwani has denied the allegations.

“Ms. Holmes is likely to testify herself to the reasons why she believed, relied on, and deferred to Mr. Balwani,” lawyers for Holmes wrote in a February legal filing that was unsealed.

Taking the stand could help humanize Holmes who sits upright with a notebook in front of her and is sometimes seen whispering to her lawyers inside the courtroom.

She occasionally glances over to the jurors who are on her left and will often look back to her mother, Noel Holmes, and several friends who occasionally sit on the bench behind her. The face mask Holmes is required to wear in court has hidden any public display of her emotion.

But testifying in her own defense could run a major risk.

“Most white collar defendants do not take the stand,” Danny Cevallos, an NBC News legal analyst, said. “That’s because most have at least some credibility issues. A good defense attorney knows that if your client takes the stand and loses credibility, the case is lost.”

Sometimes the best defense is simply a deflection.

“It shouldn’t be a hard lift for Elizabeth Holmes to use the government’s evidence to try and foist blame onto Sunny Balwani,” Cevallos said. “After all, the government’s prosecuting Sunny too. So the judo move for Elizabeth is to use that evidence directed at Sunny herself and essentially say Sunny is the only criminal here.”

Cevallos cautioned at the end of the day the jury will want to hear Holmes’ side of the story.

“There’s no silence louder than the silence of the accused in a criminal case,” Cevallos said. “Everybody in the jury wants to hear from Elizabeth. But that’s why the judge will instruct them that they cannot take the defendants silence either as ambition or hold it against her.”

Balwani’s attorney, Jeffrey Coopersmith, declined to comment. Attorneys for Holmes did not respond to CNBC’s request for comment.

Holmes and Balwani have pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. If convicted, they each face up to 20 years in prison.

Cevallos points to the terabytes of documents, text messages and emails in the case that the defense can attempt to use as a source for evidence rather than Holmes testifying.

Kathrein agreed that Holmes would likely not take the stand in her own defense unless her attorneys think it’s a last resort.

“It would be a disaster for her to testify,” Kathrein said. “She’s charming but she’s kind of all over the place in the SEC deposition. She says she doesn’t remember, she makes admissions and she never blames Sunny. So her whole defense of blaming Sunny would crumble.”

Kathrein referred to another deposition conducted by lawyers for the Securities and Exchange Commission over three days in the summer of 2017.

In that deposition, which was also videotaped and obtained by CNBC, Holmes was more forthcoming answering questions ranging from what she told investors about the capabilities of the blood-testing technology to Theranos’ financial projections. However, she also said she didn’t know the answer when she was pressed about specifics relating to information given to the high-profile investors.

“Did you review projections, financial projections, that were sent to Rupert Murdoch?” SEC attorney Rahul Kolhatkar asked Holmes in the deposition. “I’ve seen them,” Holmes said. “I guess, before they were sent out to Mr. Murdoch, did you review those projections?” Kolhatkar asked. “I don’t remember, but I’ve seen the documents,” Holmes replied.

Holmes settled the SEC lawsuit, agreeing to pay a $500,000 fine and not serve as director or officer of a public company for ten years. As part of the settlement, Holmes neither admitted nor denied the allegations.

A key answer during the SEC deposition came during questioning about the Theranos contract with Walgreens.

Asked if she were the decision maker at Theranos and if she signed the contract, Holmes told SEC lawyers: ”I did. I signed many of the Walgreens agreements. I don’t know if I signed all of them. And yes. I mean, I’m the CEO. I’m the ultimate decision maker for the company.”

Legal experts say that sworn testimony may come back to haunt Holmes if she does testify.

“The risk in calling a defendant is that if the jury finds even a tiny portion of her testimony to be dishonest, they will likely consider her completely dishonest,” Cevallos said.

Referring to the Latin phrase Falsus in uno, falsus in omnibus, Cevallos said “a liar in one thing is a liar in all things.”

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