Elizabeth Holmes arrives at court for Theranos trial

CNBC Special Correspondent Scott Cohn joins Tech Check from outside the California courthouse where Elizabeth Holmes' trial begins today. He details Holmes' possible defense and other new revelations in the case. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Nearly a decade ago, Elizabeth Holmes was proclaimed the golden girl of Silicon Valley, and briefly crowned America’s youngest female self-made billionaire.

This week, she’ll walk into a San Jose federal courthouse with a very different image: a defendant charged with fraud.

Federal prosecutors in the Northern District of California have accused Holmes and Ramesh “Sunny” Balwani, former Theranos president and for a time her romantic partner, of defrauding investors and patients. They each face two counts of conspiracy to commit wire fraud and 10 counts of wire fraud. Holmes, 37, and Balwani, 56, who will be tried separately, pleaded not guilty.

Jury selection in Holmes’ trial will begin Tuesday and is expected to take at least two days, a process that typically takes less than a day in lower-profile cases. Opening statements are scheduled for Sept. 8 and the trial is expected to last 13 weeks.

If convicted, Holmes could face 20 years in prison. Prosecutors say Holmes not only swindled investors of hundreds of millions of dollars, but she also put thousands of lives at risk.

The rise and fall of Theranos

Holmes’ saga began when she had a vision of running hundreds of laboratory tests with just a finger prick of blood. She dropped out of Stanford at age 19 to start Theranos. The idea was to make blood tests cheaper, convenient and accessible to consumers.

The company struck partnerships with Walgreens and the grocery chain Safeway. Her board of directors included luminaries such as former Secretaries of State Henry Kissinger and the late George Shultz and former Secretary of Defense James Mattis.

But Holmes’ vision turned upside down in 2015 after Wall Street Journal reporter John Carreyrou published a series of damning reports exposing the shortcomings and inaccuracies of Theranos’ technology.

Patients were given inaccurate test results relating to conditions such as HIV, cancer and miscarriages.

“She commercialized a medical product that she knew did not work, her machine only did a handful of tests that did not do them well at all,” Carreyrou said in an interview with CNBC last week.

In 2018, Holmes and Balwani were charged with “massive fraud” by the Securities and Exchange Commission. That led to Theranos being dissolved and Holmes settling with the SEC. She agreed to pay $500,000 without admitting or denying the charges. Balwani intends to fight the SEC charges.

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