SAN JOSE (KPIX) -- Testimony in the Elizabeth Holmes fraud trial on Tuesday, gave a glimpse into how the billionaire Devos family was enticed into a major investment with Theranos, the biotech company Holmes founded in 2003.
The DeVos family -- who made a fortune with Amway -- were part of an exclusive group of billionaire investors who were hand-picked by Holmes to back her startup, according to testimony.
Lisa Peterson, who manages investments for the DeVos family corporation RDV, testified that in 2014, Elizabeth Holmes offered the family an exclusive opportunity to privately invest in Theranos. Peterson said the family was ready to put down $50 million, but after a meeting with Holmes in which she claimed her device could do hundreds of blood tests, was being used by the military and Walgreens, and was validated by 10 major pharmaceuticals, the family doubled its investment to $100 million.
"Elizabeth Holmes knew those statements would be persuasive," said Santa Clara University Law Professor Ellen Kreitzberg, who says the prosecution has to prove fraud. "They will always have to go back and show she made these statements with the intent to defraud them, to get their money."
The prosecutor then showed the jury two TV clips of Holmes defending Theranos, including one from CNBC which aired on the same day the Wall Street Journal published a scathing article on the company.
'This is what happens. First, they think you're crazy, then they fight you and then all of a sudden you change the world," Holmes said on the clip.
"It could get the jury to see that this woman with a very straight face and impassioned argument can make statements that she knows are false," Kreitzberg said.
On cross-examination, the defense lawyer pressed Peterson on why the DeVos's did not do more due diligence before they invested. Peterson said they were afraid of being uninvited to invest if they asked too many questions.
"We relied on what they told us," she said.
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