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Jury Selection Begins In The Fraud Trial Of Theranos Founder Elizabeth Holmes

LEILA FADEL, HOST:

Jury selection in the fraud trial of Elizabeth Holmes started today. She became famous after founding the blood testing company Theranos. The Silicon Valley startup promised to revolutionize the health care industry. Instead, it collapsed in controversy. NPR's Bobby Allyn was in the San Jose courtroom and joins us now.

Hi, Bobby.

BOBBY ALLYN, BYLINE: Hey.

FADEL: So remind us of Elizabeth Holmes' story and why she's in the courtroom today.

ALLYN: Yeah, Elizabeth Holmes founded Theranos in 2003 at the age of 19 after she dropped out of Stanford. Jump ahead to 2014, and Theranos was worth $9 billion. She wore black turtlenecks like Steve Jobs, who was her personal idol. And she went around Silicon Valley saying she developed a breakthrough blood test that could screen for all sorts of diseases, from diabetes to cancer, with just a tiny pinprick of blood. Well, the company fell apart shortly after, after journalists and government officials scrutinized her claims.

And now, today, prosecutors are saying she deserves to go to prison for defrauding investors of hundreds of millions of dollars and giving false test results to patients who thought they were getting some, you know, miracle blood test at Walgreens. Instead, you know, a pregnant woman was told incorrectly she had a miscarriage. Another patient was falsely told she had - her cancer had returned when it had not. Holmes is facing 12 counts of fraud and conspiracy to commit fraud.

FADEL: OK, so this was day one. What happened in court today?

ALLYN: Yeah, so hundreds of jurors were given a 28-page questionnaire before even coming into the courtroom today. And once inside, the judge and lawyers grilled them with individual follow-ups about how much media exposure they had had and whether, you know, they can put their opinions aside and consider the case against Elizabeth Holmes fairly. And, you know, it's a tricky task, considering the incredible amount of coverage Holmes and Theranos has generated over the years. But, you know, during this process, Holmes sat stoically with a mask on. I can't say what she was thinking, but, you know, a few times she turned around and gazed at the rows of jurors.

FADEL: So what do you know about how Holmes plans to defend herself?

ALLYN: Well, we learned in some newly released court filings this weekend a little bit about her defense strategy. She plans to place the blame on her ex-boyfriend, Sunny Balwani, who was the No. 2 at the company. During the time of the alleged fraud, she plans to say that she was physically and emotionally abused by him. He's also charged, but it will be a separate trial next year. Holmes says, you know, Balwani controlled what she ate, how much she slept, who she spoke to, who she emailed. And she's planning to say the abuse and manipulation clouded her judgment so much that she could not have had the intent to break the law.

FADEL: Now it's been several years since all of this happened. What's the significance of this trial today?

ALLYN: Yeah, some industry observers say if Holmes is convicted and sentenced to prison, this could create a real course correction in the tech industry. You know, there's a real, you know, fake it till you make it kind of ethos here that drives these big thinkers and innovators in Silicon Valley. If she's convicted, they say, you know, it might temper the sort of anything-goes spirit of the tech industry. It could send a signal that, you know, making exaggerated claims about a product could veer into criminal territory. Others, though, you know, are more cynical and say, you know, regardless of what the verdict is in the Holmes trial, it's not likely to change how business operates in the tech world.

FADEL: NPR's Bobby Allyn in San Jose, Calif.

Thank you.

ALLYN: Thanks so much. Transcript provided by NPR, Copyright NPR.