Elizabeth Holmes, who has become a symbol of the fake-it-’til-you-make-it, is going on trial. Tuesday, Aug. 31, a trial that has been delayed repeatedly by Covid-19, and by childbirth, will finally begin. Holmes’ new boy, William Holmes Evans, was born on July 10, in Redwood City, Calif.

Elizabeth Holmes faces 12 counts of fraud, all arising out of the birth, much-hyped life, and spectacular death of health-care disruptor Theranos.  

A Life Suited for a Legend

Holmes dropped out of Stanford University, where she had briefly studied chemical engineering, when she was 19 years old, in 2003. This was not long after the “irrational exuberance” of the late 1990s, and the idea of the high-tech entrepreneur who had no time to waste waiting around for a college diploma. 

Holmes started a company that at first she called “Real-Time Cures,” describing its motivation as the democratization of healthcare.

She pitched an idea early on to a professor of medicine at Stanford, Phyllis Gardner, of a device that would develop “vast amounts of data from a few droplets of blood derived from the tip of a finger.” Gardner said it couldn’t be done. 

Later, when the company had become known as Theranos (for “therapy” and “diagnosis”) that conversation would be part of the legend. After all, every great innovator has to have encountered someone who said “it can’t be done.” 

The History of Theranos

The prosecutors claim, though, that Holmes never managed to prove Gardner wrong. She only managed to produce smoke-and-mirrors demonstrations that made it appear that she had done that. The smoke and mirrors allowed her to raise and burn through a lot of money playing the part of a  high-tech hot shot.

The period 2013-15 represent the peak of Theranos, and of Holmes as its founder and public face. In 2013, Walgreens announced plans to use Theranos’  technology to offer affordable and needle-free blood tests in locations across the country. 

A 2014 article in Engadget that focused on the Walgreen’s deal was for the most part enthusiastic, although the reporter, Mariella Moon, observed: “Holmes is pretty secret when it comes to Theranos’ testing process.”

At one point, Forbes estimated the value of Theranos at $9 billion, and Holmes’ personal net worth as half of that.  

In 2015 the company had more than 800 employees. 

A Drumbeat of Whistle Blowers

In 2015, though, The Wall Street Journal ran a series of articles about Theranos that indicated the sky-high evaluations were unjustified. The series revealed that the heart of the alleged technological breakthrough, the small box the company was calling “Edison,” where the “nanocontainers” of fingertip blood were inserted, didn’t work as advertised.

Edison was often displayed but seldom used, and gave unreliable results when it was. Theranos had been surreptitiously using commercially available drug-testing services to get the results it would attribute to Edison.

What followed was a steady drumbeat of whistles blown from inside the company, and investigations launched from outside. Theranos had to lay off 340 employees in October 2016, another 155 in January 2017. By mid-2018 fewer then two dozen employees remained. That September the corporation formally dissolved.

Theranos’ Charges and Speculation

In June 2018, a grand jury indicted both Theranos’ former chief operating officer, Ramesh Balwani, and Holmes, as chief executive officer. A federal grand jury indicted Holmes as chief executive. They were charged with defrauding patients on the one hand and defrauding investors on the other.

The first week, perhaps more, of the trial that begins Tuesday will be devoted to the selection of a jury. The trial as a whole may last through Thanksgiving.

The outlines of the defense Holmes will present are still obscure. There is some speculation that she will assert a rare “trauma defense.” Akin to though distinct from the better known “insanity defense,” a trauma defense would contend that she was under the influence of a domestic partner, suffering from trauma as a consequence, and thus that her judgment was affected. If her judgment was affected, the defense would continue, she could not have formed the necessary intent implicit in a charge of fraud.

The domestic partner at who she would point such a finger? Not William Evans, the father of her baby. Their relationship is entirely post-Theranos. It is possible Holmes would target Balwani. We will just have to wait and see.