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US ex-defence secretary James Mattis testifies in Theranos fraud trial

SAN JOSE, UNITED STATES (AFP) – Former US defence secretary James Mattis took the stand on Wednesday (Sept 22) in the high-profile fraud trial of fallen biotech star Elizabeth Holmes, telling a Silicon Valley court he was captivated by the promises she made about her blood testing system.

Mattis served on the board of Holmes’ now defunct startup Theranos, which looked set to revolutionise medical testing before it crashed in a blaze of fraud claims.

“I had been rather taken with the idea that with one drop of blood and remote capability you could basically test for a broad array of problems,” Mattis told the court in California’s San Jose, the city at the heart of Silicon Valley.

He added that he invested nearly US$85,000 (S$115,000) in the startup, noting that was a significant amount of money for him.

Political grandees like Henry Kissinger and Mattis were drawn to Theranos’ board and even media mogul Rupert Murdoch invested his cash in what seemed to be a sure-fire winner.

The bold name backers are potential witness in Holmes’ fraud trial.

When she launched the diagnostics firm Theranos in 2003 at age 19, the charismatic Holmes promised results that were faster and cheaper than traditional laboratories, running an analytical gamut on just a few drops of blood.

Trouble is, prosecutors say, the tests did not do what was promised, and she now faces fraud charges that potentially carry decades in prison.

Holmes was lauded as a visionary, drawing comparisons with Apple founder Steve Jobs, but the company unravelled as fraud allegations stacked up.

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At one point, she had a net worth estimated at US$3.6 billion, according to Forbes magazine. At the time, she was the youngest billionaire not to have inherited her fortune.

In 2018, the Securities and Exchange Commission presented the Theranos case as a lesson for Silicon Valley, a warning against the “fake it till you make it” culture.

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