CA - Elizabeth Holmes (Theranos) Wire Fraud

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Dorothy Atkins@doratki
37m

We're back! Wade asks Peterson if she did an "exhausted due diligence in the investment." Peterson said they did all the diligence that they would do at the time. He asks what she means. She says she think the DeVos fam investment firm did "appropriate" due diligence of Theranos.

Dorothy Atkins@doratki
33m

Holmes' counsel Lance Wade asks Peterson if she read Theranos' press release announcing the Walgreens deal in Sept 2013, which mentions Theranos uses "traditional methods" of blood draw as well as fingerstick, in her due diligence. She says she never read the press release.

Dorothy Atkins@doratki
26m

Petereson says she didn't read Theranos' website, which Holmes counsel says mentioned the venous draws. Peterson seems annoyed. She repeatedly says they relied on what they were told and "we went on site for five hours" and "that was a lot of due diligence."

Dorothy Atkins@doratki
20m

Peterson acknowledges that the DeVos family investment firm never hired regulatory experts, counsel, or medical experts in the due diligence process, b/c "we didn't think we needed it." She keeps interrupting Holmes attorney Lance Wade's questions and talking over him.

Dorothy Atkins@doratki
13m

Lance Wade asks Peterson if details in her Theranos memo to the DeVos family investment committee came from a Fortune Magazine article. She says she doesn't remember, but she admits she might have taken some info from the Fortune Mag. "Much of it was in [Theranos'] binder."

Dorothy Atkins@doratki
6m

Wade is picking apart Peterson's Theranos memo and asking her where she got the information in it. She keeps saying she got the info "off the internet" w/o more details (which doesn't inspire much confidence tbh).

Dorothy Atkins@doratki
12m

Peterson concedes that it's common in due diligence to review IP portfolios and a company's contracts w/ its partners, but she says she and the DeVos family didn't do that.

Dorothy Atkins@doratki
6m

Peterson repeatedly has said during cross that the meeting in Palo Alto was apart of Theranos' due diligence, but Wade impeaches her w/ her prior deposition when she said she didn't consider the Palo Alto trip due diligence.

Dorothy Atkins@doratki
5m

With some of the testimony today, it's kind of surprising that Peterson manages wealth as her job. At one point she didn't seem to know what a unicorn is. Overheard in the courtroom: “I wouldn’t let this woman run a car wash for me.”

Dorothy Atkins@doratki
30s

Holmes' counsel points to an Oct 2014 email that Peterson wrote stating her boss Jerry "committed on the spot $100M with Doug and Cheri in complete agreement." (This is to counter her testimony on direct that the DeVos firm doubled their investment to $100M after due diligence.)
 
Dorothy Atkins@doratki
1m

On the stand, Peterson explains "It’s my characterization of what I saw," but she notes that there are still processes that had to occur before the DeVos family invested money into Theranos.

Dorothy Atkins@doratki
31m

Holmes' counsel: "The investment decision was made before the memo was even prepared, correct?" Peterson: "Yes, it looks that way," but she adds, "It still has to go to the investment committee" and they still didn't wire the money until the docs were signed.

Dorothy Atkins@doratki
6m

An issue came up with an exhibit, so the parties are breaking for the day to discuss it outside the presence of the jury. Trial will resume tomorrow with Lisa Peterson on the stand for some more cross.
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Yasmin Khorram@YasminKhorram

“She very much downplayed what had been happening in the press.” An investor at Betsy DeVos’s family office testified today about Elizabeth Holmes’ statements in 2015, including her appearance on CNBC’s “Mad Money.”



cnbc.com
Theranos investor Betsy DeVos was misled by Elizabeth Holmes on the tech and financials, represen...
A rep who manages investments for the family office of Betsy DeVos testified that Elizabeth Holmes was misleading in trying to lure an investment for Theranos.
4:42 PM · Oct 26, 2021·
 
Wednesday, October 27th:
*Trial continues (Day 21) (@ 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. Trial dates: 10/27, 10/29, 11/2, 11/3, 11/4, 11/5, 11/9, 11/10, 11/12, 11/16, 11/17, 11/18 (?), 11/19, 11/23, 11/24 maybe, 11/30, 12/3 so far.
Indictment & court info from 4/11/20 thru 8/26/21 & on 9/30/21 & jury selection (Day 1-3) 8/31/21 to 9/2/21 & trial (Day 1-19) 9/8/21 to 10/22/21 reference post #693 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
10/26/21 Tuesday, Trial Day 20: Judge Ed Davila is on the bench. The parties are arguing over letting the jury see Holmes' Today Show & Mad Money clips.
Judge Davila says he received an email from a juror complaining about the noise from keyboard typing. The judge again says he'll bring in a Marshall to kick out folks who don't use silent keyboards. He adds that if they continue to complain, he'll ban keyboards from the courtroom.
Judge says he wants trial to go until 4pm today & he wants to add Mondays in Nov. A juror says it's getting "very tough" for him to manage his workload with added trial days. The judge says maybe they'll drop some days.
Government witness: RVD Corp private equity group manager Lisa Peterson, who helps manage the DeVos family's estate. Prosecutor Robert Leach on direct.
for more info see post #716 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Lisa Peterson continued. Still on direct. Prosecutor also showed the jury a clip from Holmes' Today Show interview in April 2016. The judge interrupted the clip and told counsel he wants to talk to them in chambers.
for more info see posts #717 & 718 here:
Lisa Peterson continued. Still on direct. Prosecutor re played the clip starting from the top. And defense attorney Lance Wade on cross.
for more info see posts #719 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
Lisa Peterson continued on cross.
for more info see posts #721 to 723 & 725 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
An issue came up with an exhibit, so the parties are breaking for the day to discuss it outside the presence of the jury. Trial will resume tomorrow with Lisa Peterson on the stand for some more cross. Trial continues on 10/27/21.
*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 10/27/21.
 
otto said:
Very uptight people. Like Holmes.

So Holmes falsely claimed that she was endorsed by Phizer when representing her fake blood test to investors? Financial fraud.

I hope she is not released. She is dangerous in terms of convincing others to do her criminal bidding.
Click to expand...
Per the interview of her Stanford Professor in a Sunday Times London podcast, EH has a new startup: Theranos Redux.
Dr. Phyllis Gardner, "I'll only really feel good if she's convicted", ‎Danny In The Valley: Dr Phyllis Gardner, Stanford professor and Theranos critic: "I'll only really feel good if she's convicted" on Apple Podcasts
This podcast approved by mods.
 
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Dorothy Atkins@doratki
4h

Good morning to everyone except the boat that went through a drawbridge and delayed my train by an hour. I'll be late to court this morning.

Dorothy Atkins@doratki
4h

And the rumors are true. The courthouse is closed due to a “water outage.” Court security won’t let anyone inside even though it’s my understanding there are still court proceedings going on currently. Where is my lawyer? #publicaccess

FCt82mxVUAYP-mj


Dorothy Atkins@doratki
3h

The jurors just left the courthouse, along with Elizabeth Holmes, her attorneys and a small group of press who made it inside before they wouldn’t allow anyone into the building (at ~8:35 am) even though proceedings were on going. Trial won’t resume until next week.

Dorothy Atkins@doratki
3h

I feel like every reporter covering Elizabeth Holmes’ trial closely has had or will have a total breakdown/freak out moment over public access issues or just the unpredictability of this trial. I think today may have be my turn.
 
drama_farmer said:
I can't shake the feeling that half of the jury isn't able to follow the jargon, and the other half have mentally checked out!

IMO
Click to expand...
I can't feel bad that the DeVos family didn't do their homework. They made the decision to invest in a conwoman, not their advisor, they could have chosen to reject her suggestion.
 
UndiscoveredTruth said:
Dorothy Atkins@doratki
4h

Good morning to everyone except the boat that went through a drawbridge and delayed my train by an hour. I'll be late to court this morning.

Dorothy Atkins@doratki
4h

And the rumors are true. The courthouse is closed due to a “water outage.” Court security won’t let anyone inside even though it’s my understanding there are still court proceedings going on currently. Where is my lawyer? #publicaccess

FCt82mxVUAYP-mj


Dorothy Atkins@doratki
3h

The jurors just left the courthouse, along with Elizabeth Holmes, her attorneys and a small group of press who made it inside before they wouldn’t allow anyone into the building (at ~8:35 am) even though proceedings were on going. Trial won’t resume until next week.

Dorothy Atkins@doratki
3h

I feel like every reporter covering Elizabeth Holmes’ trial closely has had or will have a total breakdown/freak out moment over public access issues or just the unpredictability of this trial. I think today may have be my turn.
Click to expand...
Oh no! This must be because of the 24 hour storm we had last weekend.
 
Thanks so much to everyone who keeps us up-to-date on this trial, I can't always stay up on it but I come back and reread everything in one big fell swoop. It's fascinating really.

The Pfizer thing was very damning evidence against her. And while the defense did score some points against the DeVos investor, I'm not sure how much of a defense "they didn't do their due diligence" is because it doesn't take away Holmes' intent.
 
Kittybunny said:
Thanks so much to everyone who keeps us up-to-date on this trial, I can't always stay up on it but I come back and reread everything in one big fell swoop. It's fascinating really.

The Pfizer thing was very damning evidence against her. And while the defense did score some points against the DeVos investor, I'm not sure how much of a defense "they didn't do their due diligence" is because it doesn't take away Holmes' intent.
Click to expand...
Same here. It's a "You didn't do your homework, it's your fault- you should have known" type defense. Not Elizabeth's fault that you couldn't see through her con.
 
New dates added to court site:

Monday, Nov 15 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes (NC)
AUSA: Jeffrey Schenk/DEF:Kevin Downey
Jury Trial


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


Monday, Nov 22 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes(NC)
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Jury Trial


Wednesday, Nov 24 2021 - NO COURT

- No Calendar Matters Currently Set


Monday, Nov 29 2021
09:00AM
5:18-cr-00258-EJD-1 - USA v. Elizabeth A. Holmes(NC)
AUSA:Jeffrey Schenk/DEF:Kevin Downey
Jury Trial


link: CALENDAR
 
Tuesday, November 2nd:
*Motions Hearing & Trial continues (Day 22) (Motion @ 8:15am & trial @ 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. Trial dates: 11/2, 11/3, 11/4, 11/5, 11/9, 11/10, 11/12, 11/15, 11/16, 11/17, 11/18, 11/19, 11/22, 11/23, 11/24, 11/29, 11/30, 12/3 so far.
Indictment & court info from 4/11/20 thru 8/26/21 & on 9/30/21 & jury selection (Day 1-3) 8/31/21 to 9/2/21 & trial (Day 1-20) 9/8/21 to 10/26/21 reference post #726 here:
CA - Elizabeth Holmes (Theranos) Wire Fraud
10/27/21 Wednesday, Trial Day 21: The courthouse is closed due to a “water outage.” Court security won’t let anyone inside even though it’s my understanding there are still court proceedings going on currently. No report yet. Motion hearing was added to schedule at 8:15am on 11/2/21. Trial continues on 11/2/21 @ 9am.
*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 11/2/21.
 
Last edited:
Dorothy Atkins@doratki
2h

Good morning from San Jose! My train was on time today and the courthouse has gotten its water back, so it's (hopefully) full-steam ahead in Elizabeth Holmes' criminal fraud trial as we head into the 3rd month of testimony today. Judge Davila is on the bench.

Dorothy Atkins@doratki
2h

The parties are discussing limiting various buckets of testimony, including emails about Theranos' financial projections from ex-Cravath partner Dan Mosley and Fortune writer @rparloff's testimony. The judge is (big surprise here) holding off on ruling on the evidentiary issues.

Dorothy Atkins@doratki
2h

The judge notes that the jurors have told him they have some scheduling conflicts, so tmr we're going until 3 p.m. instead of 4 and starting at 10 a.m. on Nov. 29 instead of 9 a.m. (Reminds us all that we have at least another month of this circus.)

Dorothy Atkins@doratki
2h

It's been a week since we were in court, but last we left off, Elizabeth Holmes' attorney Lance Wade was cross examining Lisa Peterson, a private equity manager for the DeVos family's investment firm. ICYMI, here's my recap of her exam so far.

DeVos Family Gave Theranos $100M 'On The Spot,' Jury Told - Law360

Dorothy Atkins@doratki
2h

The jury is in the courtroom. Judge Ed Davila reminds everybody again that they need use silent keyboards and if they don't, he'll "force" observers to go to the overflow courtroom (where I am and where we can type as loud as our fingers want). Lisa Peterson is back on the stand.

Dorothy Atkins@doratki
2h

Wade resumes Peterson's cross pulling up an Oct 14, 2014 email written by Bob Schierbeek, who was the CFO of the DeVos family investment firm RVD Corp., and another Oct 5 email. Both were written before Peterson prepared a due diligence memo on Theranos.

Dorothy Atkins@doratki
2h

The Oct 14 email says RDV* CEO Jerry Tubergen "is traveling to California today to meet with Theranos founder Elizabeth Holmes. Jerry has been very bullish on this potential relationship/investment. Cheri, Doug and Rick are traveling with him today. Probably a $100M investment."

Dorothy Atkins@doratki
2h

The Oct 5 email says "There are two very ‘active co investments (not in our cash flow model) that will likely take place at or near month end. Theranos-private co-investment $100 million."

Dorothy Atkins@doratki
2h

Lisa Peterson pushes back stating repeatedly that Schierbeek couldn't transfer DeVos' money before she or Tubergen gave him the OK. But Holmes' defense counsel gets her to concede the emails were sent before she spoke to Holmes, traveled to Theranos' HQ & prepared a DD memo.

Dorothy Atkins@doratki
1h

Holmes' counsel pulls up a Sept 2014 letter from Theranos to investors that states "all current resources are focused on commercial lab business, and future growth in pharmaceutical, military, and other business will follow."
 
Dorothy Atkins@doratki
1h

Peterson points out the letter also says Theranos "historically" had pharma and military business, but the judge strikes her comment as non-responsive. Holmes' counsel again notes that the letter went on to say pharma and military deals were on hold. She concedes the point.

Dorothy Atkins@doratki
1h

Holmes' counsel is walking through Theranos slides that Peterson viewed to prep her due diligence memo for the DeVos family. Judge Davila has stricken multiple comments by Peterson, who has added that she didn't know Theranos did venous draws to many of her answers.

Dorothy Atkins@doratki
1h

Holmes' counsel Lance Wade pulls up the Theranos study that had a Pfizer logo at the top (which an ex-Pfizer exec testified wasn't authroized). Wade points out the footer of each page of the report has a Theranos address and Theranos' website. Peterson says she didn't notice it.

Dorothy Atkins@doratki
1h

Wade points to an "RDV approval" doc on a new equity investment into Theranos that was signed by RDV CEO Jerry Tubergen. The doc says "Closed Oct 31, 2014," but there's no date under Tubergen's signature. (The DeVos fam didn't get Peterson's due diligence memo until Nov/Dec 2014)

Dorothy Atkins@doratki
1h

Wade points out that the RDV document pulls a graph that appears to be verbatim from Roger Parloff's Fortune Magazine article on Theranos stating that Theranos' analyzers don't need FDA approval.

Dorothy Atkins@doratki
1h

Wade also notes RDV signed a doc acknowledging that Theranos has “a limited financial and operating history” and it's “highly speculative and involves substantial risks." Peterson says "it did, but we also relied on what we heard." The judge strikes the second part of her answer.

Dorothy Atkins@doratki
1h

Wade points to other provisions in RDV's contract w/ Theranos says RDV is an accredited investor, which Peterson acknowledges means it's sophisticated. But she adds "we weren’t given complete" info. The judge again strikes her added comment.

Dorothy Atkins@doratki
1h

Wade wrapped cross, and Robert Leach is up on redirect for the government. He asks Peterson if she thought the risk provisions in Theranos' docs meant what Holmes and Balwani said weren't true. She says no.

Dorothy Atkins@doratki
1h

Leach notes that Theranos projected in Sept/Oct 2014 that by the end of the year, it's revenues would be $140 million, but it ended the year with zero revenues. He asks Peterson if she thought that revs would be 0 based on what Theranos gave/told her. She says no.

Dorothy Atkins@doratki
2h

Leach is walking through the various Theranos slides that Peterson reviewed to prep the due diligence for the DeVos family. He notes that much of the language is in the present tense, and it says Theranos can do "any test available in central labs and processes all sample types."

Dorothy Atkins@doratki
2h

The judge called a break and let the jury go, but he asks a man in the gallery to come up. He says he was told the man took a pic in the courtroom, which is not allowed. The judge says if it happens again, he'll have U.S. Marshalls "take action." We're on a break. Back in ~30!
 
Dorothy Atkins@doratki
1h

And we're back! Defense counsel has an objection to an email prosecutors want to ask Peterson about, so they're going to have a sidebar about that. After q's about it, the gov't will wrap redirect.

Dorothy Atkins@doratki
1h

After a 20 minute sidebar, the judge sustained the defense's objection, and Lance Wade is up now for a few more q's on recross.

Dorothy Atkins@doratki
1h

Wade points out that Theranos had "deferred revenue" of $169 million in 2014 (to counter the testimony that Theranos had zero revs at the end of 2014). The parties finished with Lisa Peterson's examination.

Dorothy Atkins@doratki
59m

The government calls Dr. Constance Cullen, who worked at Schering Plough - which later was acquired from Merck - from 1996 to 2016. She served as the director of its bioanalytical lab.

Dorothy Atkins@doratki
55m

She said she learned of Theranos in 2009 after her boss and his boss asked her to evaluate Theranos' tech. She said Schering Plough acquired two Theranos devices to do beta testing and she traveled to Theranos' HQ in California as a part of its due diligence.

Dorothy Atkins@doratki
44m

Cullen says Schering Plough also evaluated three Theranos assays - CRP, il-6 and TNF-a multiplex - but she says Schering Plough had "no role other than review of documents." Theranos billed $279k for the cartridges used to run assays on the two devices for beta testing.

Dorothy Atkins@doratki
39m

Cullen says she & other Schering Plough due diligence team members met w/ Elizabeth Holmes at Theranos in May 2009. But "my recollection were the answers to the questions were not necessarily forthcoming. I was disappointed in the answers" b/c there were insufficient details.

Dorothy Atkins@doratki
38m

Cullen says Elizabeth Holmes primarily responded to the q's during the May 2009 meeting, even though she tried to ask other Theranos employees q's b/c they were technical, and she "did not seem to be forthcoming."

Dorothy Atkins@doratki
38m

Cullen says: "There were no direct answers to questions and the questions are fairly technical so the answers should be fairly technical and direct. There were what I would describe as cagey responses or attempts [by Holmes] to redirect to other topics of discussion."

Dorothy Atkins@doratki
36m

Cullen says she shared her thoughts about Theranos privately with some of my colleagues, but didn’t share her concerns at the meeting w/ Holmes at Theranos "because it’s awkward."
 
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