CA - Elizabeth Holmes (Theranos) Wire Fraud Thread *Guilty* #2

[UndiscoveredTruth]

Dorothy Atkins@doratki
1m

Holmes' redirect begins w/ Downey asking Holmes about Theranos blood tests. She says ~70 tests could be done on fingerstick draws and before fall 2015 she thought Thernaos' lab was "excellent," and Balwani told her it was "one of the best labs in the world."

Dorothy Atkins@doratki
35s

Holmes says she was never told there were systemic or repeated problems with Theranos' Edison device, and Theranos' R&D stored ebola samples but ex-Theranos lab director Adam Rosendorff wasn't involved in Theranos' R&D.

Dorothy Atkins@doratki
4m

Holmes says Theranos shared with the board, the FDA and the CMS that it was using modified non-Theranos blood-testing devices.

Dorothy Atkins@doratki
1m

Holmes says she never modified Theranos' financial projections that were made by Sunny Balwani and she got the data from Balwani. She "generally" understood some aspects of how it worked, but she never presented the data or changed it, she says.

Dorothy Atkins@doratki
1m

Holmes' counsel pulls up a 2014 email that Holmes' brother sent to Pfizer employee Hakan Sakul w/ the Theranos' validation report that Holmes placed a Pfizer logo on. She says Sakul never asked them to remove Pfizer's logo and she remembers his response "being positive"

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
6m

Holmes says she doesn't know when GlaxoSmithKline logos were added to another Theranos report that was sent to Walgreens executives or who added them.

Dorothy Atkins@doratki
3m

In a March 2009 email, a Theranos employee sent the same study that was sent to Walgreens execs a year later and it had a GSK logo on the report. Holmes says GSK had done the work and never objected to Theranos placing GSK's logo on the report.

Dorothy Atkins@doratki
1m

Theranos also sent a powerpoint to GSK that said "GSK completed a comprehensive validation of Theranos systems in 2008" and nobody from GSK objected to it or took issue with the language, according to Holmes.

Dorothy Atkins@doratki
26s

Holmes says in 2009 Theranos "had a huge amount of invention happening in our laboratory" and a large number of trade secrets and patents being developed "and we needed to figure out how to protect them." She asked HR to create a trade secret policy in April 2012.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
20m

Holmes' counsel is walking through Theranos' trade secret policy, which says the company will "vigorously pursue and enforce patent protection for our IP, wherever it makes sense to do so" and a trade secret is "never" disclosed publicly, which distinguishes it from patents.

Dorothy Atkins@doratki
18m

Holmes says Theranos didn't begin modifying third-party devices until 2013, and not all Walgreens' employees had signed CDAs w/ Theranos.

Dorothy Atkins@doratki
13m

Holmes says she signed a contract with Theranos stating that she wouldn't disclose the company's trade secrets, and it would've been a violation of Theranos' own policy to disclose the info to investors.

Dorothy Atkins@doratki
1m

Holmes' counsel moved on to Tyler Shultz's concerns. Daniel Young wrote Holmes in a long email that Shultz didn't understand coefficient variables and "I don't know that any study was simply repeated with the original data being ignored."

Dorothy Atkins@doratki
31s

Holmes says Theranos hired multiple law firms to review Theranos' website and had multiple teams working on it, because "I wanted to make sure what we were putting up was right." She says there was a "team of project managers" who were responsible for making changes to the site.

Dorothy Atkins@doratki
6m

Holmes says a project manager was ultimately responsible for making changes to language on Theranos' website before it went live, and the manager communicated w/ the marketing, legal and technical teams.

Dorothy Atkins@doratki
4m

Trial is breaking for the day. The jury left, and the judge asks counsel about the schedule, adding "I know that's a really troublesome question." Holmes' atty says he has ~30 mins more of redirect and wants to review the transcript before deciding whether to call more witnesses.

Dorothy Atkins@doratki
3m

That's all for today. We may/may not have more witnesses tomorrow before the defense rests - meaning this could go to the jury as soon as Thursday (hella optimistic) or as late as Dec. 20th (please, god no).

 

[Niner]

Wednesday, December 8th:
*Trial continues (Day 37) (@ 9am PT) - CA – for *Elizabeth A. Holmes (34/now 37) (CEO of Theranos) charged (March, 2018) & indicted (6/14/18) & arraigned (6/15/18) with 9 counts of wire fraud & 2 counts of conspiracy to commit wire fraud and charged & indicted (4/11/20) with fraud relating to a patient's blood test. Another count of wire fraud was added in 2020, bringing the total number of felony charges to 12. Plead not guilty. No bond. Faces a maximum sentence of 20 years in prison & up to $2.75 million in fines, plus restitution, & $250K for each individual count of wire fraud & conspiracy.
Defrauding investors out of $700 million in funding for their blood-testing startup Theranos.
Trial began on 8/31/21 with jury selection. 12 jurors of 7 men & 5 women (6 Caucasians, 4 Hispanics & 2 Asians) with five alternates (3 men & 2 women). Juror #7 excused & replaced with alternate #1. Now jurors are 8 men & 4 women. Alternates 2 men & 2 women. 10/6/21: Juror #4 excused & replace with alternate #2. Now jurors are 8 men & 4 women. Alternates 2 men & 1 woman. 10/22/21: The judge excused Juror #5, moving up the third alternate to replace the juror. Both are women. No word on why the juror was excused. Now jurors are 8 men & 4 women. Alternates 2 men.
Trial began on 9/8/21.
The Court trial days will be Tuesday, Wednesday & Friday, possibly other half days. The Court may modify the trial time & set either 8:30am-2pm or 9am-2pm & possibly 30-minute breaks in between. Judge Edward J. Davila presiding. Jury selection was on 8/31 & 9/1 completed. Judge Davila said the juror whose mother-in-law died suddenly last week wants to travel for a few days next week for the memorial service, so trial won't be in session next Friday, Oct. 29. 10/20/21: Judge Davila notes that a juror can't be in court Friday, 11/12 & 12/3 & the judge has a conflict in November at some point due to a meeting in the Ninth Circuit committee. Motions hearing on 11/2/21, 11/16/21, 11/17/21 & 12/7/21.
Trial dates: 12/8, 12/9, 12/10, 12/13, 12/16, 12/17 so far & no court from 12/21/21 thru 1/6/22.
Indictment & court info from 4/11/20 thru 8/26/21 & on 9/30/21 & on 11/2/21 & jury selection (Day 1-3) 8/31/21 to 9/2/21 & trial (Day 1-36) 9/8/21 to 12/7/21 & motions hearing on 11/8/21, 11/19/21 & 12/7/21 & charging conference on 12/3/21 reference post #6 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
12/7/21 Motions Hearing: Motions hearing: Prosecutor Kelly Volkar says the defense has produced a bunch of docs and the gov't doesn't know where they came from. She says the docs are being admitted too late, and the gov't hasn't had a chance to counter them. "It's a very egregious violation," she says.
For more info see posts #9 & 10 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
12/7/21 Tuesday, Trial Day 36: Defense witness: Elizabeth Holmes continues on cross exam by Prosecutor Robert Leach.
For more info see posts #11 to 18 & 20 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
Elizabeth Holmes continued on re-direct by Kevin Downey.
For more info see posts #21 to 23 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
The jury left, and the judge asks counsel about the schedule, adding "I know that's a really troublesome question." Holmes' attorney says he has ~30 mins more of redirect & wants to review the transcript before deciding whether to call more witnesses. Trial continues on 12/8/21 @ 9am.
*Ramesh “Sunny” Balwani (53/now 56) (CFO & President of Theranos) – Motion in Limine hearing on 1/6/21 & trial set to begin on 1/11/22, 1/12/22 & 1/14/22 with jury selection & trial starts on 1/18/22.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
15h

Elizabeth Holmes' cross examination in her criminal fraud trial wrapped today, with Holmes admitting a lot, but defending her sometimes "aggressive" actions as necessary to protect the startup's trade secrets.

Holmes Defends Theranos' 'Aggressive' IP Protection At Trial - Law360

ETA: (I missed the above tweet that was tweeted 15hrs ago, so had to edit this post, sorry!!!)


Dorothy Atkins@doratki
3h

Good morning! I’m in San Jose where skies are clear and Elizabeth Holmes’ examination in her criminal fraud trial is expected to wrap. It’s unclear who, if anyone, will be called as the next witness. Funny enough, the line to get inside the courthouse isn’t so formidable today.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
2h

The jury is in the courtroom. There's no pre-trial arguments this morning, so we'll be going straight into Holmes' redirect, which is estimated to take about 30 mins.

Dorothy Atkins@doratki
2h

Holmes' counsel Kevin Downey begins Holmes' redirect this morning focusing on Walgreens' partnership w/ Theranos in 2014 and 2015 and an Oct 2014 customer experience survey. Prosecutors objected to some exhibits, so testimony is getting a slow start.

Dorothy Atkins@doratki
1h

After some back and forth, the exhibit is admitted and Downey highlights that the Walgreens customer experience survey from 2014 was sent to Holmes, and it had positive feedback.

Dorothy Atkins@doratki
1h

Holmes says after Balwani texted her "we can't scale with WAG" (ie. walgrees) says she met w/ Walgreens in Dec 2014 and discussed Theranos renting out space in Walgreens' stores to take over the design, which they were amenable to.

Dorothy Atkins@doratki
1h

Holmes also explains her 2014 texts w/ Balwani at the time mentioned CVS, b/c their discussion was about rolling out Theranos devices in Pennsylvania, which Walgreens wasn't interested in doing, "so we were preceding with CVS." Theranos disclosed that to Walgreens, she says.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Holmes says she spoke with Theranos' scientists & engineers before meeting w/ entities about what could be said re its tech. In an Oct 2010 email about a presentation to GSK, Ian Gibbons wrote "I think we have demonstrated capabilities fully equivalent to lab," Downey notes.

Dorothy Atkins@doratki
1h

Holmes' counsel points to various assay validation reports signed by Dr. Adam Rosendorff and Holmes agrees that Theranos never offered blood assays that had not been validated by a lab director.

Dorothy Atkins@doratki
1h

Holmes denies ever telling Roger Parloff that Theranos never bought 3rd-party devices to use.

Holmes: I told him that we were completely vertically integrated, that it was all manufactured in-house.

Atty: And that was referring to Theranos' proprietary analyzer?

Holmes: Yes.

Dorothy Atkins@doratki
1h

Holmes' counsel points to the email that Holmes sent to investors including a link to Parloff's article and highlights a sentence about Theranos' goals to help the world. Holmes says she wanted to show "how our systems could help people."

Dorothy Atkins@doratki
1h

Holmes' counsel points to notes from CMS inspection in 2013. The notes says "the auditor asked if we have any new tests offered since last audit. Adam said yes and spoke about all LDTs," which the attorney points out includes Siemens Avia devices (non-Theranos devices).

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Holmes says she doesn't know if the inspector asked about the non-Theranos devices, but he could have. Holmes' counsel moves on to another topic - Holmes' texts w/ Balwani.

Dorothy Atkins@doratki
1h

In one text exchange, Holmes was repeating "word-for-word" something Balwani had texted her. She explains "Sunny would often blow off steam or vent through texts" so she would repeat what he texted her to show she was listening and paying attention. "I tried not to ignite him"

Dorothy Atkins@doratki
1h

Holmes says when Sunny Balwani would get upset, he would say he wanted to "personally take over whatever he was upset about and that he would own it and he would fix it."

Atty: Did you accept that?

Holmes: I did.

Dorothy Atkins@doratki
1h

Holmes' counsel points to Nov 2014 texts in which

Balwani wrote "Normandy lab is a disaster zone. Glad I came here. Will work on fixing this."

Holmes replied "Meant to be that your there apparently - what happened?"

Holmes says around that time Balwani took over the lab

Dorothy Atkins@doratki
1h

Holmes says she doesn't know if at the time, Balwani was telling her every issue that he saw w/ Theranos.

Atty: Did he tend to be self critical of his management in these areas?

Holmes: He was not.

Dorothy Atkins@doratki
1h

Elizabeth Holmes' attorney notes that she had many board advisors while she was Theranos' CEO, but asks her who was her most important advisor at the time?

Holmes: Sunny was.

Atty: Did you end that relationship in a single moment or was it a process?

Holmes: It was a process.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Elizabeth Holmes says after she ended her relationship with Sunny Balwani, he would show up at her church she would go to at night to see her, and at "the Dish, which is where I would run around Stanford."

Dorothy Atkins@doratki
1h

Over objections, Holmes' attorney asks if she made money off the sale of the home that she lived in with Sunny Balwani. She says when she left him, their LLC dissolved and she didn't get any proceeds from the sale of their house.

Dorothy Atkins@doratki
1h

Holmes counsel asks her if she recognizes that Theranos investors lost money

Holmes: I do.

Atty: Was that a result of your misleading them about Theranos?

Holmes: Of course not

Dorothy Atkins@doratki
1h

Holmes' counsel wraps her redirect highlighting that Theranos had capable biotech experts who are still working in the industry and capable marketing professionals and in-house attorneys. He also gets Holmes to explain that she wanted to change healthcare over the long-term.

Dorothy Atkins@doratki
1h

Prosecutor Robert Leach is up for re-cross. He starts by pointing to Theranos IP policy & getting Holmes to acknowledge Walgreens was a Theranos partner - not competitor.

Holmes: We were worried about getting into the lab business to become a competitor, but they were a partner

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Leach gets Holmes to acknowledge that Theranos' IP policy also "contemplates" sharing confidential information w/ Theranos' contractors and partners, like Walgreens.

Dorothy Atkins@doratki
1h

Leach pulls up a GlaxoSmithKline contract and points out that Holmes was comfortable sharing Theranos' confidential info with GlaxoSmithKline. She agrees that she was.

Dorothy Atkins@doratki
1h

Leach asks Holmes if the LLC that owned her house w/ Balwani was dissolved during the SEC Theranos probe. She says she doesn't know when it was dissolved.

Leach: You don't know if it happened when you were under scrutiny from the SEC?

Holmes: I don’t, I didn’t dissolve it.

Dorothy Atkins@doratki
1h

Elizabeth Holmes' re-cross has wrapped (!). Holmes' counsel has an exhibit he wants to question Holmes about, but the judge wants to talk to the attorneys about it first, so he told the jury to take a quick break.

Dorothy Atkins@doratki
1h

After a brief discussion, Judge Ed Davila sustains objections to exhibits that Holmes' counsel wanted to admit regarding customer feedback reports and phlebotomists reports. But he's allowing in one page of an email - unclear what's in it.

Dorothy Atkins@doratki
1h

Trial is taking a break. It's unclear for how long but probably 20 - 30 mins. When we're back, we'll find out if we've got any more witnesses in Elizabeth Holmes' trial or if this is going straight to closings. Standby...

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
44m

We're back! Judge Ed Davila is on the bench. Prosecutor Robert Leach says the gov't doesn't object to an exhibit about FDA submissions that Holmes' counsel wants to introduce to rebut claims the Edison 4.0 didn't work.

Dorothy Atkins@doratki
39m

The judge called the jury back in. Elizabeth Holmes' counsel Kevin Downey asks the judge to admit the email into evidence. With that, Holmes rested her defense case, and the government is calling no rebuttal witnesses. Evidence closed!

Dorothy Atkins@doratki
37m

Judge Ed Davila says he thinks it's going to take the rest of the week to nail down jury instructions and the court's not available early next week, so closing arguments will take 2-days. He proposes Dec 16 and 17 for closings, and deliberations to start Dec. 20. (I may riot)

Dorothy Atkins@doratki
34m

Judge Davila is breaking for 15 minutes for jurors to make calls about starting jury deliberations Dec. 20, the week of Christmas (come on, man).

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
18m

The judge is back on the bench. He says one juror is unavailable Dec 22, and another one has an appointment Dec 16. "It sounds like the jury is otherwise available," the judge says.

Dorothy Atkins@doratki
16m

Prosecutor Robert Leach says the gov't is going to file a motion asking the court to strike Holmes' testimony on Balwani's alleged abuse, b/c she didn't call an expert.

Dorothy Atkins@doratki
14m

Holmes' counsel Kevin Downey notes there were no objections during trial and "I'm surprised to hear that motion after the close of evidence," particularly since the gov't cross examined Holmes on the topic, but he thinks it should be resolved quickly.

Dorothy Atkins@doratki
11m

The jury is back in the courtroom. Judge Davila asks the jury if they have any other scheduling conflicts other than Dec 22. No one raised their hands, so the judge is adopting the schedule. Closings in Elizabeth Holmes' criminal fraud case will begin Dec 16.

Dorothy Atkins@doratki
8m

Trial is breaking. There'll be another hearing Friday morning outside the presence of the jury on jury instructions. See ya.

 

[Niner]

Docket update:

No trial on 12/9/21


Friday, Dec 10 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Motions Hearing (IN-COURT) [Jury instructions-I added this part]

Thursday, Dec 16 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Jury Trial

Friday, Dec 17 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Jury Trial

link: CALENDAR


Not sure about jury starting deliberations on 12/20 - as the calendar shows that court is close from 12/21 thru 1/5/22.

 

[Seattle1]

What Elizabeth Holmes had to say at her trial: 5 takeaways

 

[Niner]

Seems to me Holmes answered quite a few questions from the Gov't with "I don't recall/remember"....

 

[Seattle1]

Seems to me Holmes answered quite a few questions from the Gov't with "I don't recall/remember"....

No surprise after her deposition!

 

[LinasK]

Elizabeth Holmes was always in control
All the queen’s men
By Elizabeth Lopatto@mslopatto Dec 9, 2021, 8:00am EST
Control and image are important to Elizabeth Holmes. They were important to the PR effort around Theranos when she was portrayed as the second coming of Steve Jobs. They were important when she delegated reprimands to maintain her friendly image. And they are important now — as a jury is about to decide whether she’s guilty of wire fraud and conspiracy to commit wire fraud. more at link: Elizabeth Holmes was always in control

 

[LinasK]

Elizabeth Holmes was always in control
All the queen’s men
By Elizabeth Lopatto@mslopatto Dec 9, 2021, 8:00am EST
Control and image are important to Elizabeth Holmes. They were important to the PR effort around Theranos when she was portrayed as the second coming of Steve Jobs. They were important when she delegated reprimands to maintain her friendly image. And they are important now — as a jury is about to decide whether she’s guilty of wire fraud and conspiracy to commit wire fraud. more at link: Elizabeth Holmes was always in control

From this article:
To emphasize this, the defense had Holmes testify to how what the investors heard was almost true — so maybe the investors had just misunderstood. “I wanted to convey the impact the company could make for people and for healthcare,” Holmes said. “I talked about what we created and what it could do, what was possible.”

Theranos worked with pharma companies, even if drugmakers such as Pfizer and Schering-Plough didn’t independently validate Theranos’ tech, as investors said Holmes claimed. Holmes said she put the drug companies’ logos on documents she gave to investors and business partners to represent the partnership — not to fool anyone. She couldn’t, however, explain away other changes she made to those documents that presented Theranos in a better light.
Theranos did one study with a US Army burn unit. It had started paperwork for other military studies — but didn’t deploy in Iraq, Afghanistan, or on military helicopters. But investors said Holmes told them that the company’s devices were used in Afghanistan and on medevacs. “I don’t think I said that,” Holmes said during her cross-examination.

Holmes claimed she didn’t tell Theranos investors about the company’s modifications to commercially available machines because she wanted to protect trade secrets. But she could have told Walgreens, because it was a business partner that had a confidentiality agreement in place, the prosecution pointed out, citing a document her own lawyers had created about trade secrets at Theranos. Certainly Holmes could have chosen to correct the glowing Fortune article that said Theranos only used its own devices. She did not. Instead, Theranos’ investor relations team sent it to her investors.

 

[LinasK]

From this article:
To emphasize this, the defense had Holmes testify to how what the investors heard was almost true — so maybe the investors had just misunderstood. “I wanted to convey the impact the company could make for people and for healthcare,” Holmes said. “I talked about what we created and what it could do, what was possible.”

Theranos worked with pharma companies, even if drugmakers such as Pfizer and Schering-Plough didn’t independently validate Theranos’ tech, as investors said Holmes claimed. Holmes said she put the drug companies’ logos on documents she gave to investors and business partners to represent the partnership — not to fool anyone. She couldn’t, however, explain away other changes she made to those documents that presented Theranos in a better light.
Theranos did one study with a US Army burn unit. It had started paperwork for other military studies — but didn’t deploy in Iraq, Afghanistan, or on military helicopters. But investors said Holmes told them that the company’s devices were used in Afghanistan and on medevacs. “I don’t think I said that,” Holmes said during her cross-examination.

Holmes claimed she didn’t tell Theranos investors about the company’s modifications to commercially available machines because she wanted to protect trade secrets. But she could have told Walgreens, because it was a business partner that had a confidentiality agreement in place, the prosecution pointed out, citing a document her own lawyers had created about trade secrets at Theranos. Certainly Holmes could have chosen to correct the glowing Fortune article that said Theranos only used its own devices. She did not. Instead, Theranos’ investor relations team sent it to her investors.

Also, you cannot use a "partner's" logo like Pfizer, unless the "partner" agrees that it's a partnership.

 

[mickey2942]

Also, you cannot use a "partner's" logo like Pfizer, unless the "partner" agrees that it's a partnership.

Elizabeth Holmes was always in control

Intent to deceive. I believe that the government has made their case.