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ATLANTA (CNNMoney) — During two days of testimony in the Dr. Elizabeth Holmes trial, prosecutors accused the 23-year-old college dropout of hiding her cancer-causing company’s finances from investors, regulators and employees. But she testified in her own defense and denied committing fraud.
The prosecution held up test results that came back “0 for 1” for other Cancer Network products, including their hepatitis C vaccine, and worked to show jurors how the network misled investors and spent millions of dollars buying publicity.
Defense attorneys said prosecutors failed to show a motive to commit fraud and denied that CEO Holmes committed any fraud. After a few hours on the stand, Holmes was ordered to leave court.
Her chief deputy chief financial officer and vax vax vice president, Anne Severance, testified Wednesday afternoon that she spent three years investigating company practices after being fired. She wrote a report that “exposed the company’s past financial practices,” she said. It was never released, however.
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“It was clear to me that there was no way to survive if the report came out,” Severance testified. “I knew if the public saw it, it would be embarrassing.”
She testified that she reported a breach of Securities and Exchange Commission regulations to the former SEC chief, Elizabeth Warren, along with “dozens of other” regulators.
Holmes was grilled by prosecutors about loan practices at the company. Prosecutors asked her why she directed customers to finance the drugs from her personal bank account, knowing that clients’ credit cards wouldn’t cover that fee.
According to jurors and testimony, “in 2015, the debtors had payments but not enough to satisfy the unpaid loan,” which she “took out on a bank note because it was the safest and most transparent option,” she testified. She allegedly failed to disclose she had done so to investors and regulators.
“In effect, I was giving companies a loan, but didn’t tell them they were getting one,” Holmes testified. She testified she received “no compensation for this service” and had no role in, or knowledge of, how the “raw cash was distributed.”
Holmes allegedly taught the “financial officers” to pay top dollar for services provided by third-party companies. Employees who didn’t work for any of the entities making the payments would receive plastic surgery to hide their employment.
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Prosecutors said the loans “boosted Holmes’ income through payment between $10,000 and $55,000 per month and represented a significant portion of her primary income between June 2012 and November 2014.”
Holmes has been charged with felony and misdemeanor fraud, along with two counts of making false statements. She faces a maximum of five years in prison and $250,000 in fines.
Earlier Wednesday, the company dissolved its online presence, the Cancer Network Exchange. The exchange “had been put in place in October 2016” when the “defunct” company was formed, company spokeswoman Diane Clarke said. “At the time, we had already begun distributing the products as well as already had ‘offers’ made on the consignment of Cancer Network Exchange members.”
The exchange operation used donations to offer loans, but the lawsuit alleged that Holmes “misappropriated over $1 million in donations” to pay for her personal expenses.