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

[UndiscoveredTruth]

Dorothy Atkins@doratki
2h

Schenk moves on to explain knowledge and "intent," which is a key element that prosecutors must prove for Holmes to be found guilty. He says there's a overarching theme in her text messages and emails that allegedly shows her intent, which he'll go through.

Dorothy Atkins@doratki
2h

Here's a breakdown of the counts and how they match w/ investors' losses:

Count 3 Alan Eisenman $99k
Count 4 Black Diamond Chris Lucas $5m
Count 5 Hall Group Bryan Tolbert $4.8m
Count 6 Brian Grossman $38m
Count 7 DeVos family $99m
Count 8 ex-Cravath atty Dan Mosley $6m

Dorothy Atkins@doratki
2h

Schenk says not all investors were told the same things, but there’s a “thread” that runs through the alleged false statements and there are diff categories, including the reliability and accuracy of Theranos' tech, the co's financial stability and misleading demos.

Dorothy Atkins@doratki
2h

Schenk plays a clip of Holmes from a Dec 2013 investor call. She says "the military is a big deal for us," and she goes on to give data on military fatalities in Afghanistan and the importance of medevac. She adds "We’ve been doing a lot of work there." Schenk says that's false.

Dorothy Atkins@doratki
1h

Prosecutor pulls up a slide showing eight categories of alleged false statement and exhibits that purportedly show Holmes' knowledge of their falsity. (IMO this slide is perhaps the only really useful one so far, and could prob make this trial a whole lot quicker.)

 

[GatorFL]

Let's hope she gets every minute of 20 years.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Schenk is going through a bunch of different text messages b/w Holmes and Balwani. He says her various text messages to Balwani are evidence Holmes made knowingly false statements to Walgreens, investors and journalists. (Woo, trial by text message!)

Dorothy Atkins@doratki
47m

Schenk explains some more counts:

Count 10 is a wire fraud count for the patient Erin Tompkins who received bogus HIV results

Count 11 is for patient Mehrl K. Ellsworth who received bogus prostate cancer tests

Count 12 is for ads that Theranos paid in the Arizona market

Dorothy Atkins@doratki
58m

And we're back! Judge Davila says our next break will be at 1:30. Prosecutor Jeff Schenk is back up for the government for some more closing arguments.

Dorothy Atkins@doratki
1h

Schenk says emails b/w Holmes and Fortune writer Roger Parloff shows she was knew there were false statements in his cover story, but she didn't ask him to correct them.

Dorothy Atkins@doratki
42m

Schenk says before a patient received wrong prostate cancer tests, Balwani was texting Holmes there were problems with Theranos' lab and it was "a *advertiser censored**ing disaster zone." Schenk argues Holmes had knowledge about issues from other emails too and as early as Aug 2013.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
50m

Schenk pulls up some emails and says in June 2014, Holmes was informed by her brother about problems with Theranos' pregnancy test. He notes patient Brittany Gould testified in the fall of 2014 she received inaccurate Theranos test that wrongly suggested she had a miscarriage.

Dorothy Atkins@doratki
19m

Schenk says the jury should reject Holmes' defense that she didn't sell Theranos stock, b/c Theranos was a "house of cards," and she didn't have a chance to sell her stock once the problems were publicized.

Dorothy Atkins@doratki
21m

Schenk says the defense has focused on Holmes' age and that she created Theranos when she was 19, but "the truth is, by the time investors invested in 2013 and 2014, she was nearly 30 and had been CEO for nearly a decade."

Dorothy Atkins@doratki
14m

Schenk says Holmes is the most biased witness to testify. He reads her testimony in which she said Balwani "taught me everything I had thought I knew about biz ... I think I didn’t question him in a way I otherwise would have" but that changed in 2016 w/ the CMS report.

Dorothy Atkins@doratki
13m

Schenk says Holmes' testimony isn't true and the emails she received from Balwani, her brother and other employees show she knew the lab had problems before the CMS report.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
12m

Schenk tells the jury repeatedly that the case is about whether patients and investors and they don't need to decide whether Balwani abused Holmes while she was CEO. "Your verdict does not validate her claims of abuse. You do not need to decide if that abuse happened."

Dorothy Atkins@doratki
8m

Schenk wraps the gov't's closing arguments (for now, he'll be back for the final word tmr), depicting Theranos employees Erika Cheunk and Surekha Gangakhedkarf as heros for complaining about Theranos' quality

Dorothy Atkins@doratki
7m

To the CAND press person following me on Twitter. Kevin Downey began the defense's closings but the MIC ISN'T WORKING AND COURT STAFF IS NOT ANSWERING THE PHONE. We can't hear him in the overflow room and people are about to riot.

Dorothy Atkins@doratki
6m

Well, they just got word of the mic problems in the main courtroom and gave Downey a mic, but we missed the first few minutes of his closings, which are usually the most interesting/important, so thanks for that.

Dorothy Atkins@doratki
4m

Downey is in the middle of describing the various contracts that Theranos had with pharmaceutical companies. He has a slide up that says the gov'ts pharma case is misleading.

Dorothy Atkins@doratki
1m

Downey says prosecutors cherry-picked Theranos' pharma contracts and only focused on one Celgene contract, even though there were many that said Theranos could prepare reports and submit the report for assessment. "This is the way a number of contracts worked," he says.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
1h

Downey argues that the two ex-Pfizer and Celgene scientists who testified during trial in the gov't's case had limited knowledge of their company's existing contracts with Theranos.

Dorothy Atkins@doratki
1h

Downey says "there was no negative feedback conveyed" by Pfizer and Celgene to Holmes or Theranos. He adds that jurors would never know Theranos had many contracts w/ pharma cos if the defense didn't present a case, and "the picture can change waiting for the full story."

Dorothy Atkins@doratki
1h

Downey shows a 2006 email that Holmes sent investors w/ drugmakers' contact info, including Pfizer, "Holmes arranged for potential investors to speak w/ pharma partners...Ms. Holmes has no intent to deceive people or hide from people" the info "contrary to the gov’t assertions."

Dorothy Atkins@doratki
1h

Downey points out that Holmes sent GlaxoSmithKline and Pfizer validation reports that Theranos prepared w/ their logos, but the cos never raised concerns about the logos. Downey says Theranos had at least 11 partnerships w/ drugmakers and the partnerships were successful.

Dorothy Atkins@doratki
1h

Downey turns to legal standards. "Holmes is presumed innocent until each and every one of you agrees beyond a reasonable doubt that she’s committed the offenses." He explains reasonable doubt, and shows the jury a pic that looks like this.

Dorothy Atkins@doratki
1h

Downey tells the jury: "This is not a case where you're evaluating, 'Do I think it's more likely than not Ms. Holmes committed an offense.'" He goes on to explain the gov't must show Holmes knowingly intended and willfully committed wire fraud. good faith = no intent to defraud

Dorothy Atkins@doratki
1h

Trial is taking a 30 minute break. In a nice moment, Jeff Schenk just helped Kevin Downey figure out what's going on with his mic.

Dorothy Atkins@doratki
1h

Tyler Shultz showed up today to watch closings.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
57m

And we're back! The judge asks Kevin Downey if he has a new battery in his mic. He says he does. Downey begins by thanking the jury for the time they've spent serving and emphasizes they're being asked to decide criminal charges, which is a significant task.

Dorothy Atkins@doratki
55m

Downey says to understand Holmes' intent, the jury should look at her interactions w/ the FDA, feedback she received from Theranos' R&D and outsiders, her repeated willingness to have 3rd parties review the tech and the reforms she implemented in 2016.

Dorothy Atkins@doratki
51m

Downey says Holmes "made very broad disclosures" about Theranos' biz starting in Sept 2013, and submitted "every assay" she thought Theranos could do w/ its devices, and submitted the Theranos 4-series device for FDA approval in 2014.

Dorothy Atkins@doratki
45m

Downey notes that the only person who worked on the Theranos team that built its blood-testing devices and who testified in the case is Surekha Gangakhedkar, even though more than a dozen scientists and engineers worked on the devices.

Dorothy Atkins@doratki
44m

Downey points to slide presentations Theranos' R&D team prepared starting in Feb 2010 that said Theranos' 4-series would be capable of running any test.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
41m

Downey says Thernaos' R&D team validated hundreds of proprietary assays for the 3.0 device and they thought they could validate the same assays for the 4.0 device "very quickly."

Dorothy Atkins@doratki
36m

Downey says Holmes was also getting positive outside feedback. He notes Stanford engineering prof and Theranos board member Channing Robertson told Brian Grossman "he did not see any technical risk at all, in their core technology" and "there was nothing technology couldn’t do."

Dorothy Atkins@doratki
34m

Downey points out that Holmes sent Theranos devices and data to Johns Hopkins to review it before entering the Walgreens deal, and Johns Hopkins didn't identify any tech issues.

Dorothy Atkins@doratki
32m

Downey says Holmes also hired Dr. Kingshuk Das in 2016 to review the tech after CMS found deficiencies, and "she turned on a dime" agreeing to implement the changes he recommended in the lab.

Dorothy Atkins@doratki
27m

Downey: "At the end of the day, the q you have to ask yourself, 'what was Ms. Holmes intent? Was she trying to defraud people?'" If the evidence doesn't show she intended to defraud people, the jury must find her not guilty on all the charges, he says.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
18m

Downey says Holmes' comments on Theranos' testing capabilities have been consistent, and her understanding of "accuracy" is a technical one. Jurors can see that b/c she commented on an email to Tyler Shultz defining it as the "pre-analytical error rate and variance point."

Dorothy Atkins@doratki
14m

Downey pulls up an Aug 2013 email Holmes wrote telling other Theranos employees not to use certain language b/c "we want to make sure that we’re making an accurate claim."

Dorothy Atkins@doratki
7m

Downey argues that investors knew Theranos was using venous blood-draws b/c it was disclosed on the website and some investors got their blood drawn venously at Walgreens when they took Theranos' tests. He also notes that Holmes wrote in an email Theranos "we need to own it"

Dorothy Atkins@doratki
6m

Downey says if even one ordered test out of 11 required a venous draw, Theranos would have patients get their blood drawn venously, which he says explains Holmes' comments about the volume of tests to Roger Parloff.

Dorothy Atkins@doratki
3m

Downey says Holmes' idea for Theranos started w/ a patent and there were different milestones and challenges during its initial years, but there was an "extraordinary tech breakthrough" in early 2010 that the engineers thought they had invented tech to do any blood test.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
46s

Downey says just as the engineers thought they invented tech in 2010, the government claims Holmes' conspiracy began. He notes that in 2010, Walgreens was a large publicly traded co w/ 8k stores, whil Theranos was a 6 year old startup "with a 26-year-old CEO."

Dorothy Atkins@doratki
27m

Downey says when Holmes met w/ Walgreens in early 2010 "Theranos did not propose an immediate launch" and Holmes suggested they focus rolling out specific tests. "It's hard to know how Walgreens was defrauded," b/c their July 2010 contract was favorable to Walgreens, he says.

Dorothy Atkins@doratki
22m

Oh whoa, Downey has a slide on a q that some reporters have asked ourselves during trial. Where the heck is ex-Theranos CTO Dr. Daniel Young? Downey notes his name is on 200 exhibits, he played a key role in the case, but the gov't hasn't called him as a witness. Cc.
@mslopatto

Dorothy Atkins@doratki
15m

Moving on to trade secrets... he says Holmes was advised that Theranos' modification to third party devices were trade secrets, like "the coca-cola formula," and she couldn't disclose it to outsiders.

Dorothy Atkins@doratki
5m

Downey says prosecutors have repeatedly shown one 2014 text from Balwani about Walgreens slowing its Theranos rollout, but the contracts controlled the relationship and "there is simply not evidence that Ms. Holmes thought in 2014 that there would not be a partnership."

Dorothy Atkins@doratki
4m

Downey asks "If Ms. Holmes were a criminal wouldn’t she appoint her cronies" to her board? Instead, she appointed high-profile, experienced individuals to the board, including Jim Mattis, Henry Kissinger, David Boies and others, he says.

Dorothy Atkins@doratki
3m

Trial is breaking for the day - and just in time, b/c I desperately need coffee. We'll be back here tomorrow morning for the final hours of closings before this months-long trial heads to the jury.

 

[LinasK]

Dorothy Atkins@doratki
46s

Downey says just as the engineers thought they invented tech in 2010, the government claims Holmes' conspiracy began. He notes that in 2010, Walgreens was a large publicly traded co w/ 8k stores, whil Theranos was a 6 year old startup "with a 26-year-old CEO."

Dorothy Atkins@doratki
27m

Downey says when Holmes met w/ Walgreens in early 2010 "Theranos did not propose an immediate launch" and Holmes suggested they focus rolling out specific tests. "It's hard to know how Walgreens was defrauded," b/c their July 2010 contract was favorable to Walgreens, he says.

Dorothy Atkins@doratki
22m

Oh whoa, Downey has a slide on a q that some reporters have asked ourselves during trial. Where the heck is ex-Theranos CTO Dr. Daniel Young? Downey notes his name is on 200 exhibits, he played a key role in the case, but the gov't hasn't called him as a witness. Cc.
@mslopatto

Dorothy Atkins@doratki
15m

Moving on to trade secrets... he says Holmes was advised that Theranos' modification to third party devices were trade secrets, like "the coca-cola formula," and she couldn't disclose it to outsiders.

Dorothy Atkins@doratki
5m

Downey says prosecutors have repeatedly shown one 2014 text from Balwani about Walgreens slowing its Theranos rollout, but the contracts controlled the relationship and "there is simply not evidence that Ms. Holmes thought in 2014 that there would not be a partnership."

Dorothy Atkins@doratki
4m

Downey asks "If Ms. Holmes were a criminal wouldn’t she appoint her cronies" to her board? Instead, she appointed high-profile, experienced individuals to the board, including Jim Mattis, Henry Kissinger, David Boies and others, he says.

Dorothy Atkins@doratki
3m

Trial is breaking for the day - and just in time, b/c I desperately need coffee. We'll be back here tomorrow morning for the final hours of closings before this months-long trial heads to the jury.

She made these old rich guys her cronies. She seduced them with her feminine wiles.

 

[GatorFL]

She made these old rich guys her cronies. She seduced them with her feminine wiles.

Classic honeypot.

 

[Niner]

And all the court site shows is today's hearing - nothing else scheduled. I'll check it out later today - and see what is going on!

Friday, December 17th:
*Trial continues (Day 39)-Closing Arguments continued (@ 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 & completed on 9/1/21. 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.
Trial dates: 12/17-closing arguments, 12/20-Jury was to start deliberations & so far no court from 12/21/21 thru 1/5/22.
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 1-37) 9/8/21 to 12/8/21 & motions hearing on 11/8/21, 11/19/21 & 12/7/21 & charging conference on 12/3/21 & 12/10/21 reference post #41 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
12/16/21 Thursday, Trial Day 38: Judge Ed Davila is on the bench. He wants to clear up some jury instruction issues. One is that he plans to instruct the jury that portions of the CMS' 2016 report is admitted for the limited purpose of speaking to Holmes' state of mind but not for its truth.
The government's closings will take most of today. The defense's closings are expected to be split between today & tomorrow.
for more info see post #57 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
Prosecutor Jeff Schenk does closing for government.
for more info see posts #58 to 60 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
Prosecutor Jeff Schenk continued.
Here's a breakdown of the counts & how they match with investors' losses:
Count 3 Alan Eisenman $99K
Count 4 Black Diamond Chris Lucas $5M
Count 5 Hall Group Bryan Tolbert $4.8M
Count 6 Brian Grossman $38M
Count 7 DeVos family $99M
Count 8 ex-Cravath attorney Dan Mosley $6M
Count 10 is a wire fraud count for the patient Erin Tompkins who received bogus HIV results
Count 11 is for patient Mehrl K. Ellsworth who received bogus prostate cancer tests
Count 12 is for ads that Theranos paid in the Arizona market
for more info see posts #61, 63 to 65 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
Defense attorney Kevin Downey on closing arguments.
for more info see poss #65 to 70 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud Thread #2
Back here tomorrow morning for the final hours of closing arguments continue on 12/17/21 for Day 39.
*Ramesh “Sunny” Balwani (53/now 56) (CFO & President of Theranos) – Pretrial conference hearing (Motion in Limine) on 1/14/22 & status conference hearing on 1/25/22. Trial was set to begin on 1/11/22 with jury selection & trial on 1/18/22 have been cancelled.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
5h

Yesterday, a prosecutor depicted Elizabeth Holmes as a mature liar who "chose to go down the path of fraud" to prop up her "house of cards" startup, while her defense argued she never intended to defraud anybody. My recap of the penultimate day of trial:

Feds Portray Holmes As Mature Liar As Fraud Trial Nears End - Law360

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
5h

Good morning from San Jose! After nearly 4 months of testimony and legal arguments, Elizabeth Holmes’ criminal fraud trial will head to a jury this afternoon. There’s a long line to get inside the courthouse - hopefully for the last time! There were 50+ people waiting at 5 am

Dorothy Atkins@doratki
4h

Everybody in line seems to be in a cheery mood this morning despite the frigid temperatures. It’s mostly press. (I’d tweet more but I can’t feel my fingers rn.)

Dorothy Atkins@doratki
4h

“I’m smiling, am I not smiling?”

Dorothy Atkins@doratki
3h

Overheard in the overflow courtroom by a frustrated spectator who didn't make it into the main courtroom this morning: "This wouldn't be so bad, if we were allowed to drink in here. Could you imagine watching this drunk? It'd kind of be funny."

Dorothy Atkins@doratki
3h

The woman who asked yesterday if Elizabeth Holmes wore stockings to court is back in the overflow courtroom this morning debating to herself aloud about whether the jacket Holmes is wearing today is "periwinkle blue." On another topic, she says Emily in Paris was "really good."

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
3h

Judge Ed Davila is on the bench. He wants to talk about "a couple of things that came to my attention yesterday." One is on Downey's mention of trade secrets and that Holmes acted on the advice of counsel - an arg he barred in pretrial order. "It seems like we're close to that."

Dorothy Atkins@doratki
3h

The judge says the defense withdrew Holmes' proposed trade secret jury instruction, but it may confuse the jury not to have one in light of closings. The judge adds he reviewed the transcript, b/c "I couldn’t recall if you raised the ‘advice of counsel’ phrase and you didn’t."

Dorothy Atkins@doratki
3h

Downey says the trade secret args speak to Holmes' intent and it isn't an asserted defense. He also doesn't think the judge needs to single out the issue w/ an instruction. The judge says "I'm not trying to interject myself in either case" but he's concerned about jury confusion.

Dorothy Atkins@doratki
3h

The judge asks prosecutors for a response, "Maybe they’ll tell me I’m counting too many angels on pinheads." Robert Leach says he thinks the judge shouldn't instruct the jury on trade secrets b/c "it could cut either way" for the parties.

Dorothy Atkins@doratki
3h

But Leach adds that he thinks the judge should instruct the jury Holmes is not asserting an advice-of-counsel defense. One correction - the judge's pretrial order (true to form) said it was too early to exclude the advice-of-counsel defense and he needed to wait and see.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
3h

Downey says he doesn't think it's necessary to instruct the jury on the advice-of-counsel defense. But Judge Davila notes that he granted Holmes' request to give a good faith and a willfulness instruction and "Mr. Leach was red in the face" arguing against both of those.

Dorothy Atkins@doratki
3h

Downey says he doesn't plan to go back into the topic, and Leach says he plans to address it on rebuttal. The judge says "I raised this issue, b/c I get to, I suppose" and he was concerned Downey went too far, but writing a new instruction at the 11th hour would be disruptive.

Dorothy Atkins@doratki
3h

Kevin Downey plans to wrap Holmes' closings by 11:30 and the government's rebuttal is expected to last hour to and hour-and-a-half, so jury instructions should begin around 1 p.m.

Dorothy Atkins@doratki
3h

The jury's in the courtroom. Kevin Downey is back up for the final hours of Elizabeth Holmes' defense. He explains that the clear and convincing standard is the "firm belief" it's "highly probably" the charges are true, while beyond reasonable doubt is "firmly convinced" of guilt

Dorothy Atkins@doratki
3h

Downey argues that the gov't's case narrowly focuses on the Edison 3.5 device and its CLIA lab, but Holmes was focused on the "broad point-of-care use" and the 4.0-series. That's the "fundamental disconnect" in the gov't's case, he says.

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
3h

Downey says "People lost money... Ms Holmes certainly did not intend for that. That was a bad event." But the case isn't about losses, it's about whether Holmes intentionally and knowingly lied to investors to defraud them, and there's no evidence she did, he says.

Dorothy Atkins@doratki
2h

Downey argues the investors' relationship to Theranos wasn't governed by news articles, it was governed by the terms of their stock purchase contracts, which specifically said the investments were highly speculative and investor statements weren't thorough descriptions of the biz

Dorothy Atkins@doratki
2h

Downey turns to alleged victim investor Alan Eisenman, who invested in 2006 and again in 2016. Downey notes he was an experienced investor, but initially gave Theranos money after a 5 min convo. ICYMI, here's my coverage of his testimony.

Theranos Investor Emailed Prosecutors During Trial, Jury Told - Law360


Dorothy Atkins@doratki
2h

Downey points out that Eisenman testified that he relied on current info when he invested a second time in 2013* (correcting that previous tweet, which said 2016 and would be outside the alleged fraud period) and not Holmes prior statements.

Dorothy Atkins@doratki
2h

Downey notes that Balwani repeatedly told Eisenman in 2013 that he would not receive additional information before his investment, but he invested again in Theranos anyway. (Alan Eisenman was probably the least convincing alleged investor victim who testified in the DOJ's case)

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
2h

Downey moves on to investor Chris Lucas, and points out that Lucas testified he invested in Theranos b/c of Holmes' "vision" but not necessarily the state of the tech at the time. ICYMI here's my story on his testimony.

Holmes Cited Walgreens Deal In Rushing Investors, Jury Told - Law360


Dorothy Atkins@doratki
2h

Downey argues that in 2013-14 investors invested b/c they knew Theranos had made a deal w/ Walgreens to roll out its services in pharmacies, and not b/c of any specific statement about fingerstick tests.

Dorothy Atkins@doratki
2h

Turning to investor Bryan Tolbert now. Downey notes Tolbert had no direct contact with Holmes after his initial investment and the gov't only focuses on a recording Tolbert made of Holmes' 2013 investor call.

Dorothy Atkins@doratki
2h

Downey is "breaking down" Holmes' investor call and "what she actually says." He shows the jury a transcript of the call, which is the first time they're reading the call as opposed to just listening to it.

Dorothy Atkins@doratki
2h

Downey highlights portions of the transcript and notes she describes potentially using the devices in Afghanistan and medevacs - she used the word "could" and opposed to "is." She also mentions work w/ special ops command. Downey says that's the contract to test devices in Africa

 

[UndiscoveredTruth]

Dorothy Atkins@doratki
2h

Downey says "this tape is the best evidence," showing how Holmes talked about Theranos' work with the military. He notes that Theranos' projects with the military "were real projects" and went on for years, and in during the 2013 call Holmes knew the projects were "mid-stream."

Dorothy Atkins@doratki
2h

Downey points out that Holmes never says on the call that Theranos was deploying devices on military medevac helicopters, and she said Theranos' priority at the time was retail.

Dorothy Atkins@doratki
2h

Downey says the investor call wasn't the only time Holmes talked about "the medevac issue and it was captured on tape." During her convo w/ Fortune writer Roger Parloff she said "there are military-specific applications too, that are quite promising" and they "could be" broad.

Dorothy Atkins@doratki
2h

"Her words track the contract language quite closely," Downey says, and in every recorded convo Holmes says Theranos' focus was retail and not the military.

Dorothy Atkins@doratki
2h

Downey says it's "odd" that Fortune writer Roger Parloff testified Holmes told him Theranos devices were being used in Afghanistan, but never recorded the convo. Downey notes Parloff admitted under cross "I'm not certain" about what she said, but they have recordings.