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Elizabeth Holmes admits giving false information to reporter over Theranos story

SAN JOSE, CALIF. – Theranos founder Elizabeth Holmes admitted on Tuesday that she gave a reporter inaccurate information for a long profile she was using to seduce investors.

After the cross-examination was completed, Holmes made his own defense for a sixth day and was questioned by Federal Attorney Robert Leach about the Fortune 2014 cover story, “This CEO is for Blood,” writes by Roger Parloff.

Leach showed jurors part of Parloff’s reporting on Holmes in which she appears in her trademark black turtleneck: Need a Syringe. “

“Do you agree with me that this was an incorrect statement?” Leach asked.

“I believe it now,” said Holmes.

Prosecutors allege Holmes used the Fortune article to attract investors, including in presentations and filing cabinets.

“Don’t you remember passing the Parloff article on to investors or potential investors?” Leach asked.

“I don’t,” said Holmes.

“Refresh your memory,” Leach said, showing the jury an email Holmes sent to Theranos shareholders on June 12, 2014, which was tied to the story of Fortune.

“I think I could have handled these communications differently,” Holmes told the jury.

Holmes, the once Silicon Valley darling who raised more than $ 945 million from such luminaries as Rupert Murdoch and Don Lucas, faces 11 fraud charges and up to 20 years in prison if convicted. Prosecutors say Holmes has embarked on a decade-long program to deceive investors and patients about his company’s blood testing technology. She pleaded not guilty.

For two days, prosecutors questioned Holmes on cross-examination about the discrepancies in his statements to investors, business partners and employees.

Tuesday’s testimony also covered the alleged US military use of the Theranos devices.

Several witnesses, including former Safeway CEO Steve Burd, as well as Lisa Peterson, who represented the DeVos family as Theranos investors, said Holmes told them the technology was deployed by the U.S. military in Middle East.

But at the helm, Holmes admitted that the Theranos device had never been deployed on the battlefield.

Holmes also admitted that her then second-in-command and boyfriend, Ramesh “Sunny” Balwani, never told her or the investors that the Theranos devices were used in Medevac helicopters or on the battlefield.

Leach also asked Holmes about a projected revenue of nearly $ 1 billion in 2015 when the internal estimate was much lower. Holmes said the number came from a financial model, but she didn’t think she was the one who presented the estimate to investors.

The document also showed expected revenue of $ 40 million from drug companies, but Holmes said the company did not have any contracts with drug companies at the time.

“You can’t identify a single pharmaceutical contract,” Leach said. “Did you have no income from the pharmaceutical companies in 2014? “

“We didn’t do it,” Holmes told the jury.

In his testimony, Holmes said Balwani was responsible for parts of the business, including the financial projections.

“Did you know that you were ultimately responsible for Theranos’ financial situation?” Leach asked.

“I did it,” Holmes said.

His testimony continues on Wednesday. After three months of wide-ranging trials, the defense is expected to conclude its case this week.

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