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Elizabeth Holmes' lawyers will take a major risk if they call her to the stand

·4-min read

A big question is on the minds of jurors, prosecutors, and maybe even Elizabeth Holmes and her defense team, as government lawyers come close to wrapping up their fraud case: Will the fallen Silicon Valley entrepreneur take the stand to defend herself?

There’s no easy formula to arrive at a decision, criminal trial attorneys tell Yahoo Finance, though some critical considerations are bound to weigh in.

“The biggest risk that you can take at trial as a defense lawyer is to call your client to the stand,” trial attorney Andrew George told Yahoo Finance. “The safe thing to do as the lawyer is not to, but that can also be a very safe way to lose.”

Watch: Yahoo Finance's documentary Valley of Hype: The culture that build Elizabeth Holmes

Holmes is charged with fraud in connection with her failed blood diagnostics company, Theranos, which raised more than $700 million from investors and was valued at $9 billion before it imploded under regulatory and legal investigations.

Her lawyers made the unusual move of disclosing in closed pretrial hearings that she's likely to take the stand to testify about an allegedly abusive relationship with her co-defendant, former Theranos COO Ramesh “Sunny” Balwani, who will be tried separately. Still, her defense lawyers may base their advice to Holmes on whether to testify on evidence presented by prosecutors, who are expected to wrap up their case in coming days.

Theranos founder Elizabeth Holmes exits Robert F. Peckham U.S. Courthouse after the first day of federal court hearings in San Jose, California, U.S. May 4, 2021.  REUTERS/Kate Munsch
Theranos founder Elizabeth Holmes exits Robert F. Peckham U.S. Courthouse after the first day of federal court hearings in San Jose, California, U.S. May 4, 2021. REUTERS/Kate Munsch

“I can’t imagine going into a trial like this being confident, either way, whether the defendant will testify,” attorney Gregory M. Gilchrist told Yahoo Finance at the start of Holmes’ trial. (Gilchrist previously handled litigation for the law firm Williams & Connolly, which is representing Holmes.). “They’re going to see what the government does and then make their decision.”

If convicted, Holmes and Balwani each face 20 years in prison. Balwani has denied Holmes' claims of abuse, and they have both pleaded not guilty to the charges.

Jurors want to hear from Holmes

In Holmes' case, and every case, George said, lawyers need to carefully calculate the significant risk against the reality that jurors "undoubtably" want to hear the defendant testify. Jurors will put themselves in the defendant’s shoes, he explained, and consider that if they were innocent, they’d shout it from the rooftops, and definitely inside the courtroom.

Trial attorney Brian Klein agrees that jurors do want to hear from the defendant, but can look past a defendant’s decision to stay mute.

“That's what voir dire is for," Klein said, referring to the jury selection process. "You need to question the jury on that very subject to make sure that they could keep an open mind, even if Holmes doesn't testify."

In theory, everybody has a right to take the stand in their own defense — even the innocent. While judges instruct juries on this point, those instructions might be ineffective, according to George.

“Get real! That jury absolutely can hold that decision against her, and will,” George said.

Holmes' testimony unnecessary if government fails to prove its case

Klein points out one instance when it’s entirely unnecessary for a defendant to take the stand: if the prosecution failed to prove the alleged lie — the alleged fraud — plus connect it to Holmes. Then, he said, it would be very risky to have her testify, because she could incriminate herself.

In a fraud case, he explains, the prosecutor has to prove at least one lie. “Many lies are better, but one lie is good enough,” he said, “and they must prove that Holmes either knew them, or used them, or endorsed them in some way.”

Even if Holmes' lawyers conclude that the prosecution has proven its case, they could still decide not to put her on the stand if they believe the jurors would perceive her as disingenuous.

“Any hint of dishonesty and it's over. You've lost the case,” George said. “If you’re perceived to have lied at all during your testimony, then god help you.” 

To make stakes still higher, federal sentencing guidelines permit judges to be tougher on convicted defendants if they’re found to have lied under oath. Moreover, Holmes faces the difficulty of preparing for cross-examination, which could include volumes of statements that she made in depositions, to media, investors, and potential business partners, as well as text and email exchanges with Balwani.

“The body of work becomes too big to possibly have a prepared answer to every single thing,” George said.

Still, Holmes does have a critical characteristic that the lawyers say could make her an effective advocate for herself. “She's very good at persuading people. She persuaded people to give her hundreds of millions of dollars,” Klein said. “So she clearly has a great presence and probably has charisma. People believe her and think she's credible, so she has some personal characteristics that would operate in her favor if she testifies.”

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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