Dallas company’s recording of Theranos founder Elizabeth Holmes emerges as prosecution ‘jackpot’

The jury in the Theranos trial finally got to hear from Elizabeth Holmes herself – not in person, but a recording in which she spoke in a 2013 conference call with investors about her start-up for blood tests.

For the first time at the San Jose, California trial, Holmes was not described here by others as it has been for six weeks.

Instead, the judges heard the young entrepreneur say in her own voice all the things an investor wants to hear – her company’s extraordinary leaps in technological innovation, a skyrocketing share price, and a closing window of opportunity for investment that would of course make sense to jump in urgently.

The recording was on hold by a manager of a Dallas-based Hall Group who oversaw an early $ 2 million investment in Theranos – and who said in a slow, popular Texas accent on Friday that he agreed to add another $ 5 million – Investing dollars because Holmes was so persuasive call.

“There was limited time to respond and make an investment decision,” said Bryan Tolbert, a vice president of the Hall Group, of the judges. Hall Group is the real estate company of developer Craig Hall.

The Hall Park of the Hall Group is Frisco’s largest office project with more than 2 million square meters of building space.(Reverb group)

Tolbert’s record is a “jackpot” for prosecutors and “some of the most damaging evidence a prosecutor can produce,” said Barbara McQuade, a former US attorney who teaches at the University of Michigan Law School. The jury “can hear the defendants’ own words,” she said, so that they “can judge for themselves whether she intended to defraud investors.”

Tolbert was a little gambler compared to the family of former Secretary of Education Betsy DeVos, Walmart heiress Alice Walton, or the chairman of News Corp. Rupert Murdoch, who took over $ 125 million in Theranos.

Seven years after his first investment in 2006, Tolbert decided to record a conference call that Holmes held to solicit investors for another round of funding that would be completed in late 2013. Long parts of the recording were played in front of the judges on Friday.

You can hear Holmes confidently about the superiority of Theranos’ blood tests over traditional methods, the company’s ongoing work for pharmaceutical companies, the U.S. military’s takeover of its proprietary technology, and most importantly, its launch in Walgreens stores just a few months earlier.

Most enticingly to those who attended the conference call, Holmes described how Theranos’ stock price rose from 82 cents in a funding round years earlier to $ 75 in the 2013 stock offering.

At Walgreens, Theranos “created a national footprint as quickly as possible,” Holmes told investors. “We’re already creating significant value and of course we’re just getting started,” she said. Tolbert and others on the conference call heard from Holmes how the company’s value rose from $ 20 million in 2006 to $ 7 billion in 2013, based on the value of privately held shares.

Investors were wiped out when Theranos collapsed after a series of Wall Street Journal articles and regulatory investigations revealed serious defects in Theranos machines and inaccuracies in test results.

Holmes attorneys have not announced whether she will take a position during the trial, which is expected to last through December. She faces up to 20 years in prison if convicted on charges of deceiving investors and patients.

Tolbert’s recording allowed the Holmes jury to hear the former CEO make claims about their company’s technology that former Theranos employees and a board member have testified to be untrue.

For the government to argue that Holmes lied to raise more than $ 700 million, a collaborative witness with little baggage is preferable to a billionaire media mogul or offspring, said Andrey Spektor, a former federal attorney and criminal defense attorney at Bryan Cave Leighton Paisner in New York.

“Those factors outweigh how famous they are or how much money they lost,” Spektor said. “The jury may feel less swayed by a testimony from a rich person who they think should have known better or who didn’t suffer as much.”

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