Former Theranos CEO Elizabeth Holmes (center) and her lawyer are leaving the court on June 15, 2021. Holmes is due to stand trial later this year on wire fraud and other charges.
The federal judge in the fraud case of former Theranos CEO Elizabeth Holmes is considering unsealing details of her psychological assessment as part of a media request to make parts of her case public.
Dow Jones & Co., the publisher of the Wall Street Journal, petitioned the court to unseal documents in the Holmes case. Dow Jones attorneys said that around 40% of the documents in Holmes’ case are kept under lock and key.
“This is a very significant amount of material, as the court is painfully aware,” said John Cline, a Holmes attorney, during the hearing on Tuesday. “And Ms. Holmes’ view is that a significant portion of it can likely be unsealed at this point, but not all of it.”
The federal prosecutors support the motion to unseal parts of the case, stating that Holmes must be prepared if they are planning a mental health defense.
“The main thing we are dealing with is the continued sealing at the current level, including high-level issues including the defense of Ms. Holmes under Rule 12.2, and that hinders the preparation of the process by the government,” said Kelly Volkar, a US assistant attorney on a mental defense. “The question is how far the seal will go.”
Prosecutors had Holmes examined by a psychological expert after defense lawyers announced that they were planning to hire a clinical psychologist to testify about a “mental illness or defect” related to the guilt issue.
Another set of documents that can potentially be unsealed is why Judge Edward Davila separated the trials of Holmes and her co-defendant Ramesh “Sunny” Balwani. Balwani was her business partner and served as COO at Theranos. The couple had a romantic relationship but never revealed it to their investors.
Holmes and Balwani’s relationship reportedly ended around the same time he left Theranos.
“I will reiterate that Mr. Balwani has never requested that any part of these trial files be filed under lock and key,” said Jeffrey Coopersmith, a Balwani attorney. “Dow Jones has had a sealed filing notification for a year and a half. You are filing this now. I think we understand why, they like to sell newspapers. It is on the eve of the trial of Ms. Holmes.”
Holmes and Balwani both face a dozen criminal wire fraud and conspiracies to bring wire fraud charges. Prosecutors say the two misled patients, doctors and investors about Theranos’ blood testing technology. Neither of them pleaded guilty.
In a July interview with CNBC, former Wall Street Journal reporter who exposed the Theranos scandal, John Carreyrou, said Holmes’ defense strategy may be blamed on her ex-boyfriend.
“A large part of her defense now seems to be blaming Sunny, basically telling the jury that Sunny kept her in his psychological grip,” said Carreyrou. “Your defense plans to take on the case that he was the older friend, 19 years older, who was really the puppeteer here, and she was the puppet. And obviously they’re going to see a psychologist to sort this out.”
Davila ordered Holmes and Balwani’s lawyers to look into which documents could be unsealed and redacted by the end of the week.