CA - Elizabeth Holmes (Theranos) Wire Fraud

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Dorothy Atkins@doratki
34m

We're back! Daniel Edlin is back on the stand. Prosecutor John Bostic asks him about WSJ's Joseph Rago Sept 2013 article. Theranos' PR guy Jeff Blickman took issue w/ multiple lines in a draft of the article, including calling Holmes a "30-something chemical engineer."

Dorothy Atkins@doratki
30m

Joseph Rago's article, called "Elizabeth Holmes: the breakthrough of instant diagnosis," ran in WSJ Sept 8 2013.

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Elizabeth Holmes: The Breakthrough of Instant Diagnosis

Dorothy Atkins@doratki
26m

Prosecutor turns to a May 2014 "to do" list w/ roughly two dozen items of info that Theranos planned to provide @rparloff when he was working on a Fortune Mag cover story on Theranos.

Dorothy Atkins@doratki
25m

Edlin says Holmes was responsible for multiple items in the "to do" list. Prosecutor points to the purported Pfizer/Theranos study, which has both company's names and logos. Edlin says he doesn't know who made the study or where the doc came from.

Dorothy Atkins@doratki
18m

Edlin says he communicated with investors and prepared binders for them, which included various docs on the co's bylaws, stock purchase agreements and confidential briefing on Theranos tech. Prosecutor pulls up a copy of the investor binder sent to Rupert Murdoch.

Dorothy Atkins@doratki
14m

Murdoch's investor binder has a "cost savings" section that says Theranos' tech "yields higher integrity data" & "the actionable info you need 1/1k the size of a typical blood draw." It also says Theranos runs "any test available in central labs and processes all sample types."

Dorothy Atkins@doratki
12m

The binder also says "Theranos offers tests with the highest levels of accuracy." Edlin says versions of the same presentation was sent to various investors. Shifting topics now to customer complaints...

Dorothy Atkins@doratki
3m

One complaint from June 2014 involved a patient's inaccurate INR test. Holmes wrote to ex-project manager Max Fosque that "need you to triage this then come to me" and they can figure out what to do. Another complaint was from a Walgreens tech who received inaccurate hcG tests.

Dorothy Atkins@doratki
9m

Daniel Edlin says he helped work on Theranos' proposals to the military. He says the idea was that Theranos would test the devices in multiple phases with the ultimate goal of using Theranos blood-testing devices and services on soldiers in the field.

Dorothy Atkins@doratki
5m

Prosecutor points to a Jan 2012 email chain b/w Theranos project manager Dan Edlin and Major Steven Cook about the military using devices over a 12-month period to evaluate the technology. Edlin says at the time "I didn’t know which test could be performed and which couldn’t."

Dorothy Atkins@doratki
1m

Prosecutor points to a memo given to the military that says "each Theranos device can run every test currently available through the traditional centralized or hospital laboratory infrastructure." Edlin said he assumed the statement was true and had no reason to think it wasn't.

Dorothy Atkins@doratki
58s

Edlin says "everything in this document was reviewed and approved by Elizabeth." "She was highly involved, any substantive communication I had with the military, I either discussed it with her at the time or I sent it to her."

Dorothy Atkins@doratki
1m

Theranos' presentation to the military said the devices could be used in Medevac to test and triage wounded soldiers at the time of impact and they had GPS to enable "full operability in the field." Edlin says he doesn't know what became of the devices sent to the military.

Dorothy Atkins@doratki
1m

The jury is taking a 10 minute break so that the judge can discuss Holmes' objection to introducing Theranos' 2011 presentation to the military. Holmes' atty says it's not relevant to the conspiracy that's alleged in the indictment, which allegedly started 18 months later.
 
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Dorothy Atkins@doratki
25m

Prosecutor John Bostic says Holmes knew she told told the military the devices could do something they could not do in 2011 & that's relevant to what she later told investors re Theranos' partnership w/ the military. But defense counsel says that's multiple levels of inference.

Dorothy Atkins@doratki
22m

Judge Davila overrules the objection, and allows Theranos' presentation to the military in saying it's relevant. He's calling the jury back in.

Dorothy Atkins@doratki
12m

Prosecutor shows slides sent to the military for a burn study in 2012 that says Theranos offers "realtime" fingerstick blood-tests and its analyzers run "any test available in central laboratories." Edlin again says he didn't know if that was true, but had no reason to doubt it.

Dorothy Atkins@doratki
3m

In a July 2013, CENTCOM military Martin Drake wrote Elizabeth Holmes "Regrettably the window of opportunity is closing for me to be able to continue to dedicate resources to this experiment. Funding is expiring and personnel are being re-directed to other ongoing projects."

Dorothy Atkins@doratki
1m

In another email, Drake said the military would need a "firm commitment" from Theranos that it could provide devices in 2014 for testing for the military to request funding for it in the next year. Edlin replied Theranos could send the devices Aug 1 2014 per Holmes' direction.

Dorothy Atkins@doratki
6m

Edlin says to his knowledge, Theranos' devices were never used in the Middle East. Prosecutor points out that Theranos' devices also had be kept under 82 degrees, but it gets hotter than that in the Middle East. Trial is taking a 30 minute break. brb
 
Dorothy Atkins@doratki
1h

Trial's back in session. Prosecutor John Bostic asks Dan Edlin if anything about Sunny Balwani and Elizabeth Holmes' relationship stood out to him. Edlin says no, but he was aware they were romantically involved b/c in 2004 he was introduced as her bf.

Dorothy Atkins@doratki
59m

Edlin says they were "much more relaxed" and social when they were around each other outside work, they had lunch together, and he can't recall an instance in which Balwani overruled Holmes' opinion.

Dorothy Atkins@doratki
54m

Holmes' counsel Kevin Downey is up now on cross. He starts by asking Edlin about Theranos' various different blood-testing models.

Dorothy Atkins@doratki
41m

Downey asks Edlin how many assays he saw "development tests" for. Edlin replies he doesn't remember specifics, but somewhere "north of 40." Edlin also says he doesn't recall any specific problems with the hcG blood tests.

Dorothy Atkins@doratki
32m

Downey gets Edlin to acknowledge that he doesn't recall any of Theranos' programs with Celgene other than the email that was shown to him during direct. He also says he didn't play a large roll in the Celgene partnership.

Dorothy Atkins@doratki
27m

Edlin agrees that he never thought he or Theranos was defrauding journalists or investors and he thought that the information he was providing them was true and accurate.

Dorothy Atkins@doratki
11m

Trial broke for the day. We'll be going until 3 tmr The gov't says they planned to call Pfizer scientist Shane Weber and Lisa Peterson, who's testifying re certain investors, next, but Peterson is unavailable Fri and they have other witnesses lined up so she'll come next week.

Dorothy Atkins@doratki
10m

The judge says the jury has complained someone in the gallery is using a non-silent keyboard and it's bothersome. The judge tells observers he'll call in the court marshal to monitor the gallery if he needs to, but no one can be in the courtroom w/o a silent keyboard.
 
Wednesday, October 20th:
*Trial continues (Day 18) (@ 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 (2 men & 3 women). Juror #7 excused & replaced with alternate #1. Now jurors are 8 men & 4 women. Alternates 1 man & 3 women. 10/6/21: Juror #4 excused & replace with alternate #2. Now jurors are 8 men & 4 women. Alternates 1 man & 2 women.
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; trial dates 10/20, 10/22, 10/29, 11/2, 11/3, 11/5, 11/9, 11/10, 11/12, 11/16, 11/17, 11/19, 11/23, 11/24, 11/30 so far.

Indictment & court info from 4/11/20 thru 8/26/21 & jury selection (Day 1-3) 8/31/21 to 9/2/21 & trial (Day 1-16) 9/8/21 to 10/15/21 & motions hearing on 9/30/21 reference post #677 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud

10/19/21 Tuesday, Trial Day 17: Judge Davila is on the bench. He says 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.
Holmes' counsel asks the judge to bar prosecutors from asking ex-Pfizer scientist Shane Weber about an internal Pfizer document that didn't go to "Holmes or Theranos at all." The doc doesn't evaluate Theranos' tech, but it also doesn't recommend Pfizer do business with the startup. Judge Davila notes that they probably won't get to this witness today, so he held off on ruling about excluding the Pfizer document. Another issue: Holmes' counsel wants to exclude Holmes' presentations to the DOD & military.
for more info see post #678 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Government witnesses: Ex-Theranos project manager Daniel Edlin is back on the stand. Prosecutor John Bostic on direct.
for more info see posts #679 & 680 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Daniel Edlin continued on direct & Holmes' counsel Kevin Downey up on cross.
for more info see posts #681 to 683 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Trial continues on 10/20/21.

*Ramesh “Sunny” Balwani (53/now 56) (CFO & President of Theranos) – Motion hearing on 9/30/21 which was cancelled & trial set to begin on 1/11/22 with jury selection & trial starts on 1/18/22. No update as of 10/20/21.
 
Dorothy Atkins@doratki
3h

I'm back at the federal courthouse in a blustery San Jose for Elizabeth Holmes' criminal fraud trial. It feels like a squall is brewing outside. Judge Davila is on the bench. Holmes is in the courtroom.

Dorothy Atkins@doratki
3h

Replying to @doratki

The parties say they think they'll finish examining Daniel Edlin today, and then the government plans to call ex-Pfizer scientist Shane Weber. Sounds like we'll go until 3 p.m. today.

Dorothy Atkins@doratki
3h

Defense counsel reiterates their objection to an internal doc Weber prepared that concluded Pfizer shouldn't do biz w/ Theranos. Weber's conclusions are fair game, the document itself is not, the atty says. Prosecutors say the doc is relevant and the 'why' here is important.

Dorothy Atkins@doratki
3h

Holmes' counsel says Weber's doc uses "really pejorative terms" (ie. she's "oblique, deflective or evasive") to describe Elizabeth Holmes and it would be "profoundly unfair" to show it to the jury. Prosecutor says that "proves the power of this doc" and why it can't be excluded.

Dorothy Atkins@doratki
3h

Prosecutor notes that part of Holmes' defense is that pharma cos did work w/ Theranos, but "this is the proof that they didn’t validate the tech" and it's evidence of the falsity of the statements. Defense counsel says Weber only had a 1hr conference call w/ Holmes and her team.

Dorothy Atkins@doratki
3h

Holmes' counsel says Weber was involved w/ Theranos for 3 months during a multi-year relationship w/ Pfizer, so he's not qualified to talk about her credibility. Prosecutor says he doesn't think they should "sanitize" the words Weber used to describe Holmes.

Dorothy Atkins@doratki
3h

The judge held off on ruling. The jury is back in the courtroom and Daniel Edlin is on the stand. Holmes' attorney Kevin Downey is up on cross, which is expected to take up most, if not all, of the morning.

Dorothy Atkins@doratki
2h

Downey begins by pointing to a string of emails w/ military officials about Theranos' study with the military in 2012 on deploying devices in Africa. Edlin agrees that the study went forward.

Dorothy Atkins@doratki
2h

Downey brings up emails in which ex-Theranos VP Dan Young tested Theranos' devices to determine if it could withstand temps of 110 degrees in Africa and it could. (This counters the gov't's evidence yesterday that Theranos devices couldn't operate above 82 degrees.)

Dorothy Atkins@doratki
2h

In June 2012, Col. Melissa Givens emailed Edlin and Young stating that Theranos' devices were deployed (but not used on patients) in Cameroon, Uganda and South Sudan. "The machine traveled well and functioned well. My only complaint is the touch screen - very frustrating."
 
Dorothy Atkins@doratki
2h

Givens' email went on stating that b/c the machine "seemed to function well in the environment" she'll write a pre-proposal in hopes of gaining full funding. She also said she would send Theranos the devices that were deployed to be tested for internal quality control.

Dorothy Atkins@doratki
2h

Edlin agrees that Theranos' devices passed the government's security checks, and he showed them to the military, but he says Balwani had the engineering team disable some reports so that the military couldn't do all the tests b/c Balwani said he was concerned about trade secrets.

Dorothy Atkins@doratki
2h

Edlin says the military complained about the large size and weight of Theranos' devices. In a Feb 2013 email, he replied to military officials who asked for an update on the ship date that Theranos had to revalidate & retest new 4s devices in response to the military's feedback.

Dorothy Atkins@doratki
2h

Holmes' counsel shows an Aug 2013 email Dan Edlin sent to Holmes stating that the device deployment to the military would be delayed until Aug 1 2014. Edlin agrees that he and Holmes were working hard, and the environment was "very hectic."

Dorothy Atkins@doratki
2h

Holmes' attorney points out that Edlin asked the military for a list of assays it wanted Theranos' devices to conduct in Jan 2012, but over a year later the military was still modifying the assay list.

Dorothy Atkins@doratki
2h

Shifting topics. Holmes' counsel gets Edlin to acknowledge that there were 10-15 people who worked on the team to do demos for investors and jouros. He also says sometimes they would travel for the demos and they wouldn't be at Theranos' HQ.

Dorothy Atkins@doratki
2h

Holmes' counsel points to an Aug 2012 email in which Balwani wrote that a Walgreens exec told him he had his blood tested by his doctor's central lab after a Theranos demo, and the exec received "identical" results to Theranos' results.

Dorothy Atkins@doratki
2h

Holmes atty tries to get Edlin to concede that demo participants would regularly give Theranos feedback that their Theranos results were the same as central lab results. Edlin says he "rarely" was involved in communications w/ test participants after a demo.

Dorothy Atkins@doratki
2h

Holmes atty says says Edlin and others weren't trying to deceive anyone during demos and there were protocols they needed to follow depending on participants' requests. "None of this was about playing a trick in demos." Edlin says "correct" and "it was very in the moment."

Dorothy Atkins@doratki
1h

Holmes' counsel Kevin Downey asks Dan Edlin about a Theranos patent that names him as a co-inventor for a "gripping" method. Edlin says he doesn't know the status of the patent.

Downey smiles and says he's happy to inform him that "it’s been granted."

Edlin: "Thank you."

Dorothy Atkins@doratki
1h

Holmes' counsel points to Holmes' email to all employees on July 2015 announcing that it received its "First FDA clearance on our system and the first laboratory developed test we filed: HSV-1." Edlin says he didn't work on the FDA approval. Trial is taking a 30 minute break.

Dorothy Atkins@doratki
1h

Before breaking, Judge Davila admonishes a "man in a blue shirt" in the courtroom whose personal device made noise multiple times this am. He said if it happens again he's going to make him leave or call the US Marshalls to turn it off. "They're v good at that," the judge says.
 
Dorothy Atkins@doratki
1h

We're back! The parties are arguing over whether weekly reports with customer feedback should be shown to the jury. Prosecutor John Bostic says they'll give the jury an unbalanced view of customer feedback, especially b/c Holmes wants customer complaint logs excluded from trial.

Dorothy Atkins@doratki
56m

Judge Davila says he hasn't looked at the reports, but he's "not likely" to introduce the info w/o parsing through the info in them and if it's general feedback about a patient's experience in a Walgreens stores getting tested.

Dorothy Atkins@doratki
54m

Judge Davila says the jury has again complained about the noise of typing on keyboards that's coming from folks in the gallery. The judge says he's asked an official from the US Marshall's office to be present and that the CSO will ask people to leave if their keyboards are loud.

Dorothy Atkins@doratki
54m

(I am in the overflow courtroom, so the noise ain't comin' from me!)

Dorothy Atkins@doratki
47m

(Related, the value of the overflow courtroom's real estate is increasing as I type.)

Dorothy Atkins@doratki
37m

Dan Edlin is back on the stand. Holmes' counsel points to a presentation he helped prepared for the investor, Mosley Family Holdings. Edlin agrees the slide was meant to convey that Theranos could process blood-samples more quickly than competitors and that led to better data.

Dorothy Atkins@doratki
32m

Edlin agrees that he didn't compile the data in the slide himself. Holmes' counsel points to an email exchange in which Holmes said they need to qualify a claim in the slides to clarify refrigeration is needed to make sure the claim is accurate.

Dorothy Atkins@doratki
28m

Another slide says Theranos' variance for the Vitamin D test was plus or minus 3.0. But ex-Theranos VP Dan Young wrote Theranos spokesperson Jeff Blickman "Variance is less than 10%, not sure where +/-3.0 came from."

Dorothy Atkins@doratki
23m

Holmes' counsel points to a Dec 2012 meeting in which Theranos met with multiple PR firms and Edlin agrees the firms helped with Theranos' marketing and website. (Guessing this is all to counter evidence on direct that Holmes OK'ed website language despite objections by counsel.)

Dorothy Atkins@doratki
13m

Holmes counsel points out that Grow Marketing Inc. gave Holmes marketing advice on how she should answer questions from journalists before her interview with WSJ writer Joseph Rago.

Dorothy Atkins@doratki
8m

Holmes attorney pulls up an email that Grow Marketing's Tami Anderson wrote to Holmes in Aug 2013 before Rago's story published. The email wished Holmes luck and included an "updated Theranos story document w/ including stats."

Dorothy Atkins@doratki
4m

In Nov 2013, Theranos PR guy Jeff Blickman wrote Holmes suggesting they add language on the website that “instead of a big intimidating needle," certified phlebotomist uses fingerstick. Blickman proposed adding a footnote that “Occasionally, a venipuncture may be required..."

Dorothy Atkins@doratki
3m

Holmes replied that "if we are going to say something like this we need to own it and not contradict ourselves." She suggested removing the footnote and putting the “Occasionally, a venipuncture may be required.." into the graph itself.

Dorothy Atkins@doratki
3m

The full asterisked phrase was "Occasionally, a venipuncture may be required, based on the lab order. This is uncommon, and we aim to eliminate this scenario entirely."

Dorothy Atkins@doratki
1m

Holmes' atty points to a Sept 2013 email that Holmes brother Christian sent saying they should change language in Walgreens' brochure. He said they should replace statements that the devices could do all tests with a drop of blood with it could do "common/most frequent tests."
 
Dorothy Atkins@doratki
44m

Holmes' counsel gets Edlin to acknowledge that Theranos had a valuable patent portfolio. The atty also tries to introduce Theranos' weekly reports on patient feedback, but the judge sustains the DOJ's prior objection and won't let the reports in.

Dorothy Atkins@doratki
39m

Holmes counsel wraps Daniel Edlin's cross, somewhat anticlimactically. John Bostic is back up for the DOJ for some redirect.

Dorothy Atkins@doratki
36m

Bostic asks Edlin if the military ever used Theranos' blood-testing devices on soldiers. Edlin says no. Bostic points out that the Theranos' burn study w/ the military only had 28 participants over four years and was ended due to "low enrollment."

Dorothy Atkins@doratki
31m

Bostic points to Theranos' proposed "Africom" study on deploying the devices w/ the military in Africa. Edlin says "I don’t believe [the device] was capable of conducting all of the assays" that were listed in the study.

Dorothy Atkins@doratki
23m

Edlin says Col. Melissa Givens never conducted individual tests on Theranos' devices and Theranos never provided more devices to the military as a part of the Africom study. We're taking another break. Back in 30!

Dorothy Atkins@doratki
5m

We're back! Judge Davila notes that a juror can't be in court Friday, Nov 12 and Dec 3 and the judge has a conflict in November at some point due to a meeting in the Ninth Circuit committee. The jury is filing in, and prosecutors say they have about 30 min more of redirect.

Dorothy Atkins@doratki
12s

Bostic pulls up the Army's Sept 2012 limited objective experiment (or LOE) partnership with Theranos, which had a goal of comparing Theranos' tech to other tests to see if it could be used on soldiers in the field.

Dorothy Atkins@doratki
10s

Bostic points out that the devices were planned to be sent to the combined joint theater hospital at the Bagram air force base in Afghanistan, but gets Dan Edlin to acknowledge that Theranos never ended up sending testing devices there.

Dorothy Atkins@doratki
21s

Bostic asks Edlin if he had a sense of how Balwani and Holmes split up work at Theranos. He says Balwani's expertise were in software, the clinical lab and "most of the Walgreens operations," and Holmes focused more on science and tech, R&D and marketing and communications

Dorothy Atkins@doratki
49s

Bostic presses Edlin on his testimony that he didn't intend to deceive. Edlin clarifies "I was speaking about both about my intent as well as about other’s people’s intent." Bostic asks Edlin if he has the "ability to read minds" to determine if others intend deceive. He says no

Dorothy Atkins@doratki
40s

Bostic presses Edlin on Theranos' practice of removing results during demos and not giving them to participants. Edlin's tone notably changes: "I think it relies on interpretation of the experts for certain results, and that’s part of the process of demonstrating the technology"

Dorothy Atkins@doratki
1m

Bostic: Do you think that someone might want to know if results have been removed?

Edlin: "I personally don’t know. I can’t speak for them."

Dorothy Atkins@doratki
19s

Bostic points out that Edlin never made the decisions to remove test results during demos or not share them with demo participants. Edlin agrees. (It seems apparent in this line of q that Edlin, who is generally even-keeled, wants to defend the company.)

Dorothy Atkins@doratki
29s

Bostic asks Edlin about Theranos' claims of "superior accuracy" and points out they ended up on Theranos' website and in confidential investor presentations, including one given to Rupert Murdoch. Edlin notes that there was "some nuance" to the statements.

Dorothy Atkins@doratki
29s

Bostic shows slides that Grown Marketing gave during a Theranos "media training." (As a reporter this is triggering) The slides say avoid unwelcome q's that are "needlessly controversial" by either explaining why you can’t answer or responding quickly and moving on or "shut down"

Dorothy Atkins@doratki
22s

Bostic asks Edlin who made decisions about what Holmes could say publicly. He says he doesn't know if she consulted with anyone about those decisions.

Dorothy Atkins@doratki
12s

Redirect wraps with Edlin saying he left Theranos b/c a year after the WSJ articles were published "they had multiple opportunities to disprove the claims.. they all were unsuccessful. I ultimately reached a conclusion... [the tech] couldn’t happen and they never could happen."

Dorothy Atkins@doratki
18s

Kevin Downey is up on recross. Edlin's apparent even-keeled nature seems to be getting strained. His answers are short and at one point his response to a q sounded annoyed. Downey asked a bunch of q's about temp control in transporting devices to Uganda.

Dorothy Atkins@doratki
6s

Both sides seem to be spending way too much time on what temperature Theranos' testing devices could operate in considering the rest of the allegations in this case.
 
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Dorothy Atkins@doratki
52s

Downey wrapped recross. We're not going to make it to the next witness. We'll be back here Friday morning at 9 a.m., and the judge says he "hopes" to go until 4 p.m. Friday. The jury heads out for the day.

Dorothy Atkins@doratki
2m

The government says they'll have a witness Friday, but it may not be ex-Pfizer scientist Shane Weber -- sounds like it'll be a surprise! The judge notes that the jury says the typing sound has improved since the last break.


Dorothy Atkins@doratki
1m

Judge Davila again reiterates his request for observers to use silent keyboards, and he again puts in a plug for folks to use the overflow courtroom. With that, we're out until Friday
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Friday, October 22nd:
*Trial continues (Day 19) (@ 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 (2 men & 3 women). Juror #7 excused & replaced with alternate #1. Now jurors are 8 men & 4 women. Alternates 1 man & 3 women. 10/6/21: Juror #4 excused & replace with alternate #2. Now jurors are 8 men & 4 women. Alternates 1 man & 2 women.
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. Trial dates: 10/22, 10/26, 10/27, 10/29, 11/2, 11/3, 11/4, 11/5, 11/9, 11/10, 11/12, 11/16, 11/17, 11/19, 11/23, 11/24, 11/30, 12/3 so far.

Indictment & court info from 4/11/20 thru 8/26/21 & hearing on 9/30/21 & jury selection (Day 1-3) 8/31/21 to 9/2/21 & trial (Day 1-17) 9/8/21 to 10/20/21 reference post #684 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud

10/20/21 Wednesday, Trial Day 18: The parties say they think they'll finish examining Daniel Edlin today & then the government plans to call ex-Pfizer scientist Shane Weber. Defense counsel reiterates their objection to an internal document Weber prepared that concluded Pfizer shouldn't do business with Theranos. Weber's conclusions are fair game, the document itself is not. Prosecutors say the document is relevant & the 'why' here is important. The judge held off on ruling. The jury is back in the courtroom.
Daniel Edlin back on the stand. Holmes' attorney Kevin Downey up on cross.
for more info see posts #688 & 689 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Back from break. The parties are arguing over whether weekly reports with customer feedback should be shown to the jury.
Daniel Edlin continued on cross & John Bostic back up for the DOJ for redirect.
for more info see posts #690 & 691 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Back from break. Judge Davila notes that a juror can't be in court Friday, Nov 12 & Dec 3 & the judge has a conflict in November at some point due to a meeting in the Ninth Circuit committee. The jury is filing in, & prosecutors say they have about 30 min more of redirect.
Daniel Edlin continued with John Bostic on redirect & Kevin Downey back on re-cross.
Downey wrapped recross. Not going to make it to the next witness. Be back here Friday morning at 9 am & the judge says he "hopes" to go until 4 pm on Friday.
for more info see posts 691 & 692 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Trial continues on Friday, 10/22/21. Added to court site: Motion in Lime hearing on 10/26/21 @ 8am. Added to court site: trial on 11/4/21 striking out 11/5/21 date.

*Ramesh “Sunny” Balwani (53/now 56) (CFO & President of Theranos) – Motion hearing on 9/30/21 which was cancelled & trial set to begin on 1/11/22 with jury selection & trial starts on 1/18/22. No update as of 10/22/21.
 
Added to court site:

Tuesday, Oct 26 2021
08:00AM
5:18-cr-00258-EJD - USA v. Elizabeth Holmes
Motion in Limine

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


Thursday, Nov 4 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Further Jury Trial


link: CALENDAR
 
Dorothy Atkins@doratki
2h

I'm back in court for Elizabeth Holmes' criminal fraud trial. It's pouring rain outside and we have a long day of testimony ahead of us with a surprise witness line up and trial going until 4 p.m. Judge Davila is on the bench. Let's gooooo...

Dorothy Atkins@doratki
2h

Holmes' atty wants the judge to bar prosecutors from mentioning a 2-page email from an investor that repeats allegations in a WSJ article that has already been excluded and it "doesn't add very much." Prosecutors want it in. Sounds like Bryan Tolbert will be called today.

Dorothy Atkins@doratki
2h

Bryan Tolbert is an investor, and the gov't says he would agree to limit some q's depending on where cross examination goes. Defense says Tolbert's testimony isn't relevant to the alleged conspiracy after Dec 2015. Judge Davila: "Alright, well this is a stay tuned type of event."

Dorothy Atkins@doratki
2h

Holmes' counsel says there may be more issues they want to raise related to a fourth witness, but they're not sure if they'll get to that fourth witness today.

Dorothy Atkins@doratki
2h

Holmes' counsel brings up ex-Pfizer scientist Shane Weber's "pejorative" report that called Holmes "evasive." He wants it excluded. The judge says he understands the concern, but he notes "despite those criticisms and those terms, he says he thinks they should engage 6 months."

Dorothy Atkins@doratki
2h

The judge is going to reserve his ruling on the report, but it can be used as a demonstrative for now. Sounds like Shane Weber will also be called to the stand today. Unclear who the third witness today will be...

Dorothy Atkins@doratki
2h

Judge Davila says he has another matter to discuss w/ counsel that's "come up" w/ a juror. He says the court received an email from the juror, and they need to have an attorney from each side go into chambers and they'll speak with the juror "on the record" before trial begins.

Dorothy Atkins@doratki
1h

The jury is back in the courtroom and Judge Ed Davila is on the bench. The judge excused Juror No. 5, moving up the third alternate to replace the juror. Both are women. No word on why the juror was excused.

Dorothy Atkins@doratki
1h

The government calls its next witness, ex-Pfizer scientist Shane Weber. Prosecutor Robert Leach is up for the government on direct.

Dorothy Atkins@doratki
1h

For those keeping score, the Elizabeth Holmes jury panel consists of 8 men and 4 women by my count. The two remaining alternates are men so if any other women on the panel are excused it will shift the gender make up further.
 
Dorothy Atkins@doratki
1h

Weber has a Phd and was working at Pfizer as the director of diagnostics in 2009. He was assigned to review Theranos' tech and "diagnostic capability" in late 2008 and Holmes sent him "final" study reports in October 2008.

Dorothy Atkins@doratki
1h

Prosecutor points out that the ~26 page report has a Theranos logo in the top right corner of the document as well as a "confidential" label and it's titled "Theranos Angiogenesis Study Report."

Dorothy Atkins@doratki
1h

The report's conclusions include that Theranos' system performed w/ "superior performance to reference assays while running in a complex ambulatory environment," "intersystem accuracy is excellent," & "good correlations were seen to various commercially available gold standards."

Dorothy Atkins@doratki
1h

Weber followed up w/ an email in Nov 2008 saying he wants more info and adds "I am interested more broadly as to what this instrument is and planned to be and not just in understanding the performance and utility of the Theranos system in the oncology study."

Dorothy Atkins@doratki
1h

Weber explains he wanted more info, including a list of assays that are currently run on Theranos' devices, b/c he wanted to "make sure we’re both working with the same deck of cards" so there's not confusion and he could make a rec to Pfizer. He also read Theranos' patents.

Dorothy Atkins@doratki
54m

In another Theranos report sent to Pfizer that tested VEGF and PGIF assays, the report concluded that Theranos' system performed in "an extremely rugged environment," "inter-system accuracy is excellent" & VEGF assay accuracy is good for some cancer patients.

Dorothy Atkins@doratki
50m

After he received the reports, ex-Pfizer scientist Shane Weber had an hour-long conference call with Elizabeth Holmes to determine if Theranos’ technology matched Pfizer's clinical trials and then sent due diligence q's to Theranos. After he got answers, he prepared a rec report.

Dorothy Atkins@doratki
44m

Weber's Dec '08 report says "Theranos does not at this time have any diagnostic or clinical interest to Pfizer," and he recommends "no further financial investment or clinical sample resources be extended to Theranos" b/c its tests weren't FDA approved or CLIA lab processed.

Dorothy Atkins@doratki
40m

Weber wrote that going fwd Pfizer should have a phone call update w/ Theranos once every 6 month to see if there's been "a significant improvement to their platform." "The world changes, one never knows what the future might bring so a wait & watch approach seemed to be prudent."

Dorothy Atkins@doratki
38m

Weber's report goes on to criticize Theranos' reports as "poorly prepared" and their conclusions are "not believable," and "Theranos has provided non-informative, tangential, deflective or evasive answers to a written set of technical due diligence questions."
 
Dorothy Atkins@doratki
35m

The report says during Pfizer scientist Shane Weber's 1hr phone call w/ Elizabeth Holmes, "Theranos verbally provided oblique, deflective or evasive non-informative answers to [six] technical due diligence q's." The q's include how much would 100 devices cost for a clinical study

Dorothy Atkins@doratki
30m

Weber wrote an email in Jan 2009 that he spoke with Holmes and explained to her that "Pfizer did not have at this time a foreseeable use for Theranos immunoassay device for at patient self use at home, but she and I agreed to stay in touch every six months..."

Dorothy Atkins@doratki
29m

The email goes on "...I was polite, clear, crisp and patiently firm as she pushed back. She asked for other names at Pfizer to approach and I politely deflected." He explains Pfizer had made its determination and didn't want colleagues to be distracted from their clinical work.

Dorothy Atkins@doratki
27m

The Jan 2009 email also says Shane Weber confirmed with Elizabeth Holmes that Pfizer had paid Theranos "in full" and owed Theranos nothing. He says they planned to check in with Theranos every 6 months, but no other business ever came of Pfizer's interaction w/ Theranos.

Dorothy Atkins@doratki
25m

Prosecutor pulls up an email that Elizabeth Holmes sent to Walgreens execs a year later in April 2010 that includes a copy of Theranos' angiogenesis study, but it has a Pfizer logo on it. Weber says he never approved Theranos' use of Pfizer's logo and didn't endorse its tech.

Dorothy Atkins@doratki
23m

Holmes' email to the Walgreens exec says the report was done was Pfizer's independent "own technical validation" of Theranos' tech and the document was saved as "Pfizer Theranos System Validation Final Report." Weber says he and Pfizer never validated Theranos' technology.

Dorothy Atkins@doratki
21m

Prosecutor points out that the conclusions in the report labeled as a Pfizer and Theranos study and provided to Walgreens execs are identical to the conclusions in the report initially provided to Pfizer. Weber says no one at Pfizer reached those conclusions or OK'ed the report.

Dorothy Atkins@doratki
20m

Ex-Pfizer scientist Shane Weber's direct exam wraps with him saying as far as he knew after Jan 2009 there was "no interaction in a meaningful way" b/w Theranos and Pfizer. Trial is taking a 30 min break before Weber's cross.
 
Dorothy Atkins@doratki
35m

We're back! Holmes' counsel John Cline is up doing ex-Pfizer scientist Shane Weber's cross. He begins by pointing out that Weber only worked with Theranos for three months while he was at Pfizer.

Dorothy Atkins@doratki
31m

Cline also points out that Weber was one member of eight different molecular medicine groups at Pfizer, and he had been hired at Pfizer a "few months" (in May 2008) before he was asked to review Theranos' tech in Nov 2008.

Dorothy Atkins@doratki
28m

Cline gets Weber to acknowledge that Pfizer had been working with Theranos for years before Weber started working at Pfizer, and he thought Theranos' technology was only for in-home patient use.

Dorothy Atkins@doratki
19m

Cline points out Weber didn't send his report to Holmes, Theranos or all of his Pfizer colleagues, and that Weber met w/ prosecutors, federal agents and Pfizer's lawyers early last year.

Dorothy Atkins@doratki
15m

Cline keeps walking away from the mic, so his audio is cutting out and we can't hear all of his questions in the overflow room, which is slightly maddening. But he's focusing on the fact that Weber thought Theranos' devices were solely for home use.

Dorothy Atkins@doratki
11m

Cline pulls up a Feb 2009 email that a Theranos employee sent to Shane Weber about Theranos' preeclampsia tests. Weber replied "Pfizer has no interest in preeclampsia. Best of luck, you are on to something good. Have a nice weekend."

Dorothy Atkins@doratki
10m

Cline notes Weber was "let go" when Pfizer downsized in 2014, and gets Weber to acknowledge that he's not aware any of his colleagues or bosses had with Theranos after Feb 2009. W/ that he wrapped cross.

Dorothy Atkins@doratki
6m

On redirect, prosecutor presses Weber on whether his bosses were aware of his understanding of Theranos' tech when he emailed them about talking to Holmes & ending Pfizer's work w/ Theranos. He agrees they were and "They were silent and they moved on. These are very busy people."

Dorothy Atkins@doratki
4m

Prosecutors also point to a $900k line item in an Excel spreadsheet attributable to Pfizer. The spreadsheet presumably is Theranos' financial earnings from various pharma cos. W/ that Weber's examination wrapped. Hall Group investor Brian Tolbert is up next.

Dorothy Atkins@doratki
3m

Hall Group investor John Bryan* Tolbert said he's worked at the firm since 1999 and he invested $5 million in Theranos. He's currently its VP of finance.
 
Dorothy Atkins@doratki
1m

Tolbert says he first learned of Theranos in the summer of 2006 from his boss Craig Hall, and at the time there wasn't much information available on the company, so he set up a call with Elizabeth Holmes to do due diligence before investing.

Dorothy Atkins@doratki
10m

Tolbert said his firm's preference was to invest directly in Theranos and not a third party, so in 2013 the firm became a direct investor, but in 2006 Hall Group invested in Theranos through Black Diamond Ventures, which is owned by Chris Lucas.

Dorothy Atkins@doratki
7m

During Tolbert's meeting with Elizabeth Holmes, he took notes and his notes say that Theranos raised $16 million in its first round, and a 2nd round is expected to raise $30M "with a 125 million pre-money valuation" before a Q1 2008 IPO valued at $1 billion.

Dorothy Atkins@doratki
4m

Tolbert said at that time (in 2006) he thought Theranos had a "functioning product." His notes say Theranos was spending $1M a month, w/ $3M in revenues for 2 contracts that have already been shipped, and Theranos expects to be "cash flow positive by 4Q of '07."

Dorothy Atkins@doratki
6m

Before investing, Theranos gave Hall Group financial docs w/ revenue projections going from zero in the last quarter of 2006 to $4.6 million in Q1 of 2007; $12.2 in Q3 of '07; and $67M in Q4 of '08. Net income was projected to grow from -$4M in '06 to +$12M by Q4 '08.

Dorothy Atkins@doratki
5m

Tolbert traveled from Texas to Cali. to meet Holmes in 2006, and he took home a cartridge, but he says he doesn't remember being shown Theranos' devices. After, he decided to invest $2 million in 2006 though Black Diamond Ventures.

Dorothy Atkins@doratki
3m

Tolbert says there wasn't much information in the public of Theranos at the time, but he considered it a good thing. "It did feel like a revolutionary technology and you wanted to preserve a competitive advantage."

Dorothy Atkins@doratki
58s

Chris Lucas wrote Tolbert in July 2013 that Theranos has new board members and "She is clearly assembling an impressive group. Hopefully this also means that we will start receiving more communication from the co." Tolbert says they had many convos about the lack of transparency

Dorothy Atkins@doratki
23m

Tolbert says after a Theranos investor conference call in December 2013, Hall Group invested $5 million in Theranos at $75 per share. Tolbert recorded the call, b/c he and his boss "had some frustration we didn’t have the kind of financial info that we would normally have."

Dorothy Atkins@doratki
22m

Tolbert says when he remembered he had a copy of the investor call that he taped, he gave it to his attorney who handed it over to the gov't. Prosecutor asks Tolbert if he recognized Elizabeth Holmes' voice on the call. He says he did. We're going to hear some clips now.

Dorothy Atkins@doratki
17m

The parties are arguing over how the clips are played and the order of questioning. There are eight clips of the investor call that range between 2 mins and 7 minutes.

Dorothy Atkins@doratki
10m

The first clip is of Holmes' deep voice and she says they've been working very hard for a long time to build infrastructure and they have contracts with the military where they can deploy the framework and use it in clinical trials. Trial is taking its 2nd break of the day. BRB.
 
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