Earlier this summer, we highlighted a bombshell revelation concerning the federal fraud case against Theranos founder Elizabeth Holmes. It appears that Theranos set a trap for the Feds that prosecutors walked right into. Here’s what happened.
Back in 2018, Theranos turned over an encrypted copy of a database containing test results for thousands of patients. The database was supposed to serve as critical evidence that Theranos’s tests – which were run on competitors’ equipment that Theranos sometimes modified – provided fraudulent results. But somehow, the Feds never obtained the encryption key allowing them to access the data. Shortly afterwards, Theranos dismantled the original database, leaving the data lost forever.
Because the Feds never got the key, all that data is lost, creating a serious problem for the Feds’ case, which must now depend on anecdotal evidence from patients who were allegedly defrauded. However, medical tests are actually frequently wrong, and the challenge for prosecutors now is there’s no obvious way for them to prove that Theranos’s tests were less accurate than their competitors. Holmes’ defense team complained to the judge that the loss of the database was a critical mistake by prosecutors, erasing proof of millions of accurate tests, exculpatory evidence they will no longer be able to use. The judge presiding over the case has proven sympathetic to this argument.
Well, in its latest piece on Holmes’ trial, which is slated to begin later this month, WSJ lays out the difficult path ahead for prosecutors.
To win conviction, prosecutors with the U.S. attorney’s office in the Northern District of California must persuade the jury that Theranos’s machines didn’t work, that Ms. Holmes knew it and that she lied about the technology to receive money from investors and patients.
With the data, the case would have been a slam dunk. But without it, prosecutors are being forced to resort to the next-best thing: compelling human testimony. And according to WSJ, prosecutors intend to call 11 patients and roughly the same number of medical providers to testify about their experience being defrauded by Theranos.
That’s why these witnesses and their testimony will be the “wild card” as everything will depend on how the jury perceives their testimony.
Most of their stories haven’t been previously reported. So, WSJ obtained a copy of the witness list, and started reaching out for comment, eventually contacting more than 30 witnesses.
The Journal reached out to more than 30 people on the list of potential witnesses for this article, including all of those identifiable as medical providers or patients. The witness list, which consists of more than 200 names but no other details, was proposed by prosecutors to be used in the vetting of prospective jurors.
One witness, nurse practitioner JoEllen Embry, took her problems with the tests directly Theranos after her patients received several terrifying false positivies. She said she recalls “screaming” at Holmes, only to be brushed off by the executive (who probably used her fake deep speaking voice, making the encounter even more surreal).
Ms. Embry, a large Theranos customer, recalled screaming at Mr. Holmes in a call, demanding an explanation for the inaccurate tests, the court records say. Mr. Holmes told her the Theranos machines were “calibrated for finger stick” blood draws, she recalled, to which she responded: “My patients never had finger stick draws,” but rather had blood drawn from their arms. She said Mr. Holmes replied: “We’ll figure this out.”
Unfortunately for Holmes, text messages obtained by prosecutors show Holmes knew about the deficiencies, yet kept offering the tests. In one message to her co-defendant, Ramesh “Sunny” Balwani, Holmes said she was “praying” the Theranos lab passed a federal inspection.
Retired dentist Mehrl Ellsworth, who received a finger prick test that showed alarmingly high cancer markers indicating prostate cancer. In the end, the results were thrown out – but not before Dr. Ellsworth was thoroughly terrified.
Instead of halting, Theranos kept running tests on Dr. Ellsworth, now 73, after his doctor advised him to get retested. The second one was normal for his age, and the third showed another big spike, again over 20.
After that, Dr. Ellsworth recalled, Theranos sent a phlebotomist to his office who drew a full-size vial of blood. That result was normal again.
Dr. Ellsworth, who has a background in microbiology, and his doctor concluded the high results were false positives. Dr. Ellsworth, now retired, said he had always suspected the Theranos test results were wrong.
Finally, as WSJ points out, plenty of the discovery evidence has yet to be heard by the press. And there are plenty of witnesses who have yet to speak out. As jury selection begins, expect both the defense to go on a leaking spree. By the time it’s all over, there will be plenty of material for another round of documentaries and podcasts based on Holmes.
