What we learned this week in the trial of Elizabeth Holmes


Holmes, as soon as hailed as the following Steve Jobs, is dealing with a dozen federal fraud fees over allegations that she knowingly misled buyers, medical doctors, and sufferers about her firm’s blood testing capabilities in an effort to take their cash. Holmes has pleaded not responsible and faces as much as 20 years in jail.

Theranos was as soon as valued at $9 billion, with buyers and companions taken by the promise that its know-how may effectively take a look at for circumstances like most cancers and diabetes with only a few drops of blood taken by finger stick. But as soon as Wall Street Journal reporter John Carreyrou started poking holes into the capabilities of its know-how and its blood testing strategies, the corporate started to unravel.

The sixth week of the trial was the longest up to now, with a further day tacked on to the everyday three-day court docket schedule. Here are a number of the key — and most memorable — moments that occurred this week:

In one of many stranger testimonies up to now, jurors heard from Dr. Sunil Dhawan, who served as a lab director for Theranos for lower than a yr. Adam Rosendorff, a pathologist who beforehand served within the function, testified earlier that he departed Theranos feeling “very skeptical” in regards to the accuracy and reliability of its assessments. He was intently concerned in day-to-day operations and questioned over the course of six days earlier within the trial.
What we learned this week in the trial of Elizabeth Holmes

Dhawan, a dermatologist, had a unique, lesser stage of involvement. He testified Thursday that Theranos COO Ramesh “Sunny” Balwani — who had been a affected person of his for roughly 15 years — requested him if he’d prefer to tackle a task at Theranos as “a lab director, or a medical director” across the time Rosendorff was departing. Per an electronic mail change, Balwani instructed Dhawan “the time commitment is very minimal,” and famous that it could “be mostly an on call consulting role.” (Balwani is dealing with the identical fees as Holmes. He has additionally pleaded not responsible and his trial is slated to start early subsequent yr.)

Dhawan mentioned he did some analysis on Google to be taught extra about what Theranos did after which determined to just accept the provide. He did little or no work for the corporate, he testified, working simply “five or 10” hours at Theranos between Nov, 2014 and early summer time of 2015. He mentioned he did not work together with any sufferers, medical doctors or Theranos workers throughout that point, and solely visited Theranos a pair instances. “I believe I went, and then I went again. And that was about it,” he mentioned.

During cross examination Friday, Holmes’ legal professional identified that there was one other contractor lab director on the time named Lynette Sawyer and questioned whether or not Dhawan “hadn’t really done much on an as needed basis” for Theranos as a result of the corporate was counting on Sawyer. Dhawan testified: “I don’t know who they were calling.”

Dhawan’s involvement ramped up barely forward of a September 2015 regulatory inspection. Dhawan testified he signed almost 60 paperwork on the firm’s request on a Saturday forward of the inspection, which occurred days later. He was in attendance for the primary day of the 2 day inspection, he mentioned, which was additionally the primary time he met Holmes. Sometime shortly after, he stopped listening to from the corporate, he testified.

“Haters are everywhere”

Through witness testimonies, the federal government has sought to point out jurors how Holmes charmed subtle enterprise folks however her firm failed to fulfill its guarantees. At least one of many company executives who did enterprise with Theranos continued to point out help to Holmes after the preliminary damning Journal article, some extent the protection tried to determine.

“Haters are everywhere,” former Walgreens’ CFO Wade Miquelon mentioned in an October 2015 electronic mail to Holmes two weeks after the article ran, based on a duplicate proven within the courtroom whereas he was being cross examined Wednesday by an legal professional for Holmes.

Former Safeway CEO testifies in trial of Elizabeth Holmes

Miquelon, who left Walgreens in 2014, first met Holmes in early 2010 and helped champion the partnership, which was struck that yr. Walgreens paid Theranos $100 million as a part of an settlement, and made a $40 million fairness funding. Despite plans to launch nationwide, Theranos testing was solely ever supplied in 41 shops. (In a lawsuit, Walgreens sought to recuperate the funds, alleging a breach of contract. The events settled August, 2017.)

In a followup email days later, he instructed Holmes: “The universe has an odd way of preparing very special people for the even bigger missions ahead… Not always sensical [sic], but that’s how it goes for special people like you.”
In an August 2016 electronic mail — despatched after Theranos had voided two years of blood assessments, Walgreens had ended its partnership, and Holmes had been banned from working a blood testing lab for 2 years — Miquelon recommended Holmes on a current CNN interview in regards to the unveiling of a brand new blood testing machine and firm technique. He wrote: “Don’t stop working to help the world :)”

In court docket, he testified: “I definitely cared about her very much and wanted her to be successful.”

Text message function play

Jurors heard a prosecutor and witnesses recite textual content messages between Holmes and Balwani, who have been romantically concerned, for example how the 2 have been privately corresponding about key moments within the firm’s historical past, comparable to how the 2 felt when regulators have been doing a laboratory audit in September 2015. The private {and professional} relationship between Holmes and Balwani has been a recurring theme within the trial.

Dhawan, Balwani’s dermatologist-turned-Theranos lab director, took turns studying aloud these texts with the prosecutor. One change: “Praying literally non stop,” Holmes wrote. “Going bad so far. Pray.” Balwani mentioned. (This week’s studying aloud additionally included one textual content from Balwani that mentioned: “love you too,” recited by former Walgreens govt Nimesh Jhaveri whereas he was being questioned.)

Safeway spent a whole lot of hundreds of thousands on renovating its shops

Outside the presence of jurors, Holmes’ attorneys had fought to make sure they’d not be taught in regards to the a whole lot of hundreds of thousands of {dollars} that Safeway had spent renovating its shops in anticipation of bringing Theranos blood testing to its shops.

While the choose was in settlement, Holmes’ attorneys didn’t redact a doc they entered as proof, which referred to the retailer’s “275 million dollar remodel investment,” making it truthful sport for the prosecution to introduce throughout questioning of Safeway’s former CEO. This quantity was lower than the greater than $350 million the prosecution referenced Safeway as having spent earlier than the jury was current.

Despite the heavy funding, the Theranos blood testing by no means acquired off the bottom within the retailer’s shops.

‘A win for the press’

Holmes’ attorneys had been pushing to drive one reporter to show over his interview notes, and to maintain one other out of the courtroom. But on Thursday, a choose sided in favor of each journalists: Carreyrou, who broke the Theranos story whereas on the Journal, and Roger Parloff, the reporter who wrote a Fortune cowl story on the corporate and later detailed how he had been misled.

Elizabeth Holmes put the reporter who broke the Theranos story on her witness list. His attorneys are calling it a "ruse"
In a listening to held over Zoom concurrently with the trial, Magistrate Judge Nathanael Cousins dominated that Carreyrou ought to be thought-about an expert witness, not a fact witness and subsequently cannot be barred from the courtroom. Carreyrou’s legal professional mentioned the reporter has but to be subpoenaed. “I’m not sure he’s going to be called,” Cousins mentioned, however stopped in need of saying Holmes was appearing in unhealthy religion by together with him as a witness.

Either approach, it will not forestall Carreyrou from reporting for his podcast, “Bad Blood: The Final Chapter.” Cousins referred to as the First Amendment wants “very high” on this circumstance. “This is a win for the press,” Carreyrou tweeted shortly after.

Cousins additionally denied a movement from Holmes’ attorneys to compel Parloff to show over interview notes in an effort to by some means show that the reporter was biased and blamed his personal errors on Holmes.

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