Reporter who broke Theranos scandal predicts outcome of Elizabeth Holmes trial
- "Bad Blood" author John Carreyrou's new podcast debuts Aug. 26, it follows the upcoming criminal fraud trial of former Theranos CEO Elizabeth Holmes.
- Carreyrou told CNBC he predicts Holmes will be found guilty and her trial will be a "major wake-up call" to entrepreneurs in Silicon Valley.
- He said Holmes has an "incredibly high tolerance for risk" and she is "betting on herself."
- CNBC reached out to attorneys for Holmes and Balwani. They did not immediately return calls for comment.
The author of "Bad Blood" isn't finished telling the Theranos story.
Three years since the release of his bestselling book, John Carreyrou is debuting a new podcast to uncover the final chapter of former Theranos CEO Elizabeth Holmes. "Bad Blood: The Final Chapter" will follow the upcoming trial of Holmes.
In an interview with CNBC, Carreyrou shared his bold predictions on her criminal fraud trial, which is set to begin in August after several delays due to the coronavirus pandemic and her unexpected pregnancy. Despite the postponements, Carreyrou predicts Holmes will be convicted of wire fraud, and said that a guilty verdict in her trial will be a "major shot across the bow to entrepreneurs in Silicon Valley."
"The message will be that you can't really do anything you want, you can't completely ignore rules and regulations. You can't thumb your nose at regulators and authorities," Carreyrou said.
He warns a not guilty verdict will set a dangerous precedent among start-up CEOs. "Young entrepreneurs will say 'look what Elizabeth Holmes got away with, and she didn't go to prison for it.'" Carreyrou adds, "it's going to take a guilty verdict in this case to course-correct."
Holmes and Ramesh "Sunny" Balwani ran the now-defunct blood-testing start-up Theranos together as CEO and president -- and for a time, as girlfriend and boyfriend.
The two will face separate criminal jury trials over charges they lied to patients and doctors while bilking investors out of hundreds of millions of dollars. Holmes and Balwani have both pleaded not guilty.
Carreyrou tells CNBC a large part of Holmes' defense strategy may be to blame Balwani. He predicts Holmes will take the stand and tell the jury that Balwani "held her in his psychological grip, that he was an abusive boyfriend."
CNBC reached out to attorneys for Holmes and Balwani. They did not return calls for comment.
Holmes plans to call a psychologist who specializes in relationship trauma as a witness. Carreyrou, who spent years reporting on Holmes and what went on inside Theranos, says he doesn't buy the defense.
"Based on all the interviews I did for my book and additional ones I've done for the podcast, it's clear they ran this company and allegedly perpetrated this fraud together as a couple," he said.
"When they didn't agree on something she had the final word," Carreyrou said. "So it makes it hard for me to believe she was under his psychological grip and that she had no volition of her own."
Watch the video to hear more from Carreyrou on his trial predictions, new evidence he's obtained and his upcoming podcast.