Lisa Peterson, a wealth manager for the DeVos family, testified in Elizabeth Holmes's criminal fraud trial Tuesday, as prosecutors continued to highlight allegations about how the Theranos CEO courted investors in the once-high-flying blood-testing startup.
An email presented by the defense revealed that the family committed to doubling their investment in Theranos to $100 million "on the spot" during a 2014 visit to company headquarters.
During cross-examination, Holmes' attorney Lance Wade asked Peterson about the investors' due diligence process in evaluating Theranos. She admitted that the DeVos family investment firm never hired regulatory and medical experts or counsel, because "we didn't think we needed it." Courtroom press reported that in her Tuesday testimony, it also became clear that she didn't know what a unicorn is, explaining, "It's not something we normally invest in." (Wade didn't seem very clear on the common Silicon Valley term for a private startup worth more than $1 billion either, stating in his questioning that he thought it meant an investment that was likely to "pop.")
Peterson's boss, Jerry Tubergen, head of the family's private-equity investment portfolio, RDV Corporation, wrote in a September 2014 email to members of the family: "This morning I had one of the most interesting meetings I can recall with the woman profiled in the attached Fortune magazine article." Tubergen is also a potential witness on the government's list.
Peterson's testimony also revealed that Holmes was "hand-picking" wealthy investors for Theranos, partly to avoid the pressure that larger investment firms would put on her to take the company public. When asked by prosecutor Robert Leach whether Holmes was targeting the DeVos family office as a long-term investor, Peterson said, "Very much so."
During the family's visit to Theranos headquarters in October 2014, Betsy's sister-in-law Cheri DeVos received a finger-stick test, and Peterson testified that, to her knowledge, she received the results. She added that Holmes did not mention issues with Theranos' technology or disclose to her that the company was using third-party machines for blood tests.
Five days after the meeting, Doug DeVos wrote to Tubergen, "Well done! ! Looks like we're there! Exciting to be a part of this tremendous effort to change the world for the better!"
Peterson also said that Theranos presented revenue projections of a $3 million loss in 2014 on $140 million in revenue and a $230 million profit in 2015 on $990 million revenue, which jurors had heard in earlier testimony were fictitious.
The DeVos family fortune came out of Amway, a multilevel marketing company a family member co-founded in the 1950s.
Another revelation that came out of recent proceedings: the shrinking jury pool. Three jurors have been dismissed so far, the latest on Friday after being reported by another juror for playing sudoku while court was in session. The dismissed juror told Judge Edward Davila that the puzzle game helped her focus and didn't interfere with her ability to pay attention to the trial. Kevin Downey, an attorney for Holmes, asked the court to dismiss her anyway. "I think it's difficult for her to evaluate whether she missed testimony or evidence," he said.
There are two alternate jurors left, calling into question whether or not there will be enough jurors to get through the rest of the trial, which is expected to last until at least December.
The first dismissed juror left on the second day due to financial hardship, after being unable to change her work schedule. The second was dismissed after citing her Buddhist religion and how the sentencing might cause her anxiety.
In interviews with CNN Business, legal experts pointed to the risk of a mistrial in cases where there are fewer than 12 jurors. The Holmes trial started with 12 regular jurors and five alternates.
To complicate matters, should there be a mistrial, finding an untapped pool of new jurors would be difficult, considering the high-profile nature of the case and the challenge of identifying an unbiased jury of people who haven't heard of Holmes, who's been the subject of a best-selling book and multiple documentaries. Jury selection in the current trial was fraught.
