SAN JOSE, Calif. (AP) – The Fortune Magazine reporter whose coverage helped make Elizabeth Holmes a Silicon Valley sensation spoke on Thursday of how he ended up feeling like a pawn in the promotion by the entrepreneur of what she called a revolutionary blood test technology.
Roger Parloff’s appearance on the witness stand marked a pivotal moment in Holmes’ 10-week criminal fraud trial. Federal prosecutors are preparing to close their case, which sought to prove that Holmes defrauded sophisticated investors, retailers and patients while she was CEO of Theranos, a startup she founded in 2003 when she did not was only 19 years old.
Once prosecutors have completed their case, Holmes’ lawyers will in turn have to argue that while Holmes made mistakes in pursuing her bold ambitions, she never committed a crime.
Holmes, now 37, could come to her defense; she faces a prison sentence of up to 20 years if the jury finds her guilty. She has already suffered a surprising fall since the publication in June 2014 of Parloff’s story on the cover of Fortune magazine.
Bearing the headline “This CEO is for Blood,” the article propelled fundraising efforts that at one point valued Holmes’ fortune at $ 4.5 billion, just a few years before the collapse scandalous Theranos in 2018.
Parloff said he started working on the story in April 2014, shortly after being approached by a representative for David Boies, a prominent lawyer who worked for Holmes and became a member of the board. of Theranos.
Jurors have already heard and seen evidence that Holmes used the Parloff article to portray herself as a visionary in the mold of Apple co-founder Steve Jobs. Holmes has repeatedly promised her breakthrough will go through a blood testing machine called the Edison, which she compared to a lab in a compact box that could search for hundreds of potential health issues with just a few drops of blood taken with a prick. on your finger.
Prosecutors used Parloff’s testimony to release snippets of about 10 hours of tapes he kept of his interviews with Holmes, in an attempt to support their claim that she was running a sophisticated scam instead of a startup.
The tapes capture Holmes making statements about business relationships and blood test successes that weren’t true at the time she was taking them, based on evidence already presented at the trial. She also emailed documents to Parloff that gave the impression that Theranos ‘technology had been endorsed by large pharmaceutical companies such as Pfizer who had, in fact, already rejected Holmes’ overtures.
The audio clips also illustrate how convincing Holmes could be.
âIt sounds incredible,â Parloff told Holmes during one of the taped conversations about her and Theranos’ progress. âIt’s one of those special things,â Holmes replied.
As she did for most of the trial, Holmes stared stoically ahead for over three hours of Parloff’s testimony.
Filled with complimentary quotes from renowned medical professionals and Theranos supporters such as former US Secretary of State Henry Kissinger, Parloff’s article helped Holmes win over billionaire investors.
“It was a very compelling story,” said Daniel Mosley, an estate planning and trust lawyer who testified earlier about his pivotal role in helping Theranos raise more than $ 400 million a few months after the release of the Fortune article.
Most of that money came from a small group of Mosley customers – the Walton family behind Walmart, the family of former US Secretary of Education Becky DeVos, and family linked to media conglomerate Cox Enterprises – after Kissinger asked. to Mosley in July 2014 to take a closer look. in Theranos.
Shortly after a series of explosive articles in the Wall Street Journal revealed potentially dangerous flaws in Theranos’ blood testing technology, a mortified Parloff published in December 2015 a retraction of his original cover story.
This retraction, framed by the headline “How Theranos Misled Me”, has yet to be presented as evidence at trial.
While Parloff voluntarily cooperated with the government in his case against Holmes, he resisted efforts by Holmes’ lawyers to get him to reveal other information he gathered while writing his 2014 article and during follow-up interviews with Holmes in 2015. Parloff and his lawyers have successfully argued that much of this information does not have to be disclosed under laws protecting the media.
The question of journalist’s privilege was raised again on Thursday when one of Holmes’ attorneys, John Cline, cross-examined Parloff. The reporter told Cline he was limited by what he could provide anyway, as he had rejected most of his handwritten notes from his interviews with Holmes a year after they happened, in accordance with a claim. standard procedure of Fortune magazine.
Parloff is due to return to the stand for more questioning on Friday.
Suggest a correction