The husband of this embattled CEO is not the father of the soon to be baby.

The news has been broken.

The husband of this embattled CEO is not the father of the soon to be baby.

The CEO wants to keep it under wraps.

Elizabeth Holmes

Theranos

Elizabeth Holmes’ lavish lifestyle looms over Theranos fraud case

Elizabeth Holmes’ jet-setting, lavish lifestyle as CEO of Theranos took center stage on Thursday as her attorneys argued it was irrelevant to her criminal fraud case.

“What she wore, where she stayed, how she flew and what she ate has nothing to do with this trial,” said Holmes’ attorney Kevin Downey, adding that its “inflammatory commentary that could do great damage.”

But the government strongly disagreed, saying Holmes’ opulent way of living was bolstered by the alleged fraud.

“In addition to her salary, the company provided for her luxurious travel on private jets and expensive lodging,” said John Bostic an assistant U.S. attorney. “The point here is the so-called success of Theranos was entirely the product of fraud.”

The judge pushed back on the government’s argument, comparing her benefits to other CEOs and asking “what’s the value that she’s at the Four Seasons or a Motel 6?”

Federal prosecutors cited an email between Holmes and a Theranos-paid assistant where she discusses dinner at an expensive restaurant and purchasing clothes and jewelry.

Defense attorneys argued Holmes chose not to cash in her stock and didn’t ask for a higher salary, adding “there’s no question Miss Holmes was traveling almost exclusively on company business, much of which was not only encouraged but arranged by the board of directors.”

Holmes’ ownership stake in Theranos was valued at up to $4.5 billion. Prosecutors say her spending more than kept pace and she was overtaken by her fame.

Holmes “became a celebrity in Silicon Valley,” said Bostic. “She met dignitaries, politicians and other business leaders as a result, these things truly were benefits, intangible but benefits nonetheless and part of the fraudulent scheme.”

As she walked into the courthouse, Holmes refused to answer questions from CNBC’s Scott Cohn on whether she’s concerned to have her wealth on display.

A former Theranos executive who was close to Holmes told CNBC the embattled CEO didn’t see anything wrong with her spending while running the company on life support.

“Having, at one point, three assistants was not fiscally sound,” says the former Theranos executive who asked not to be named. “It goes to her judgement and decision-making knowing the financial state the company was in.” – Source