Coverage: Theranos founder to go on trial in 2020

Elizabeth Holmes, indicted on 11 criminal charges all for wire fraud, and the date of the trial has been set for July 28, 2020.

TechCrunch’s Kate Clark had the news:

Elizabeth Holmes,  the founder of the now-defunct biotech unicorn Theranos,  will face trial in federal court next summer with penalties of up to 20 years in prison and millions of dollars in fines.

Jury selection will begin July 28, 2020, according to U.S. District Judge Edward J. Davila, who announced the trial will commence in August 2020 in a San Jose federal court Friday morning.

Holmes and former Theranos president Ramesh “Sunny” Balwani were indicted by a grand jury last June with 11 criminal charges in total. Two of those charges were conspiracy to commit wire fraud (against investors, and against doctors and patients). The remaining nine are actual wire fraud, with amounts ranging from the cost of a lab test to $100 million.

Joel Rosenblatt had the scoop on Holmes’ defense strategy for Bloomberg:

To defend against criminal fraud charges, Theranos Inc. founder Elizabeth Holmes is trying to put investigative journalism on trial.

Holmes contends Wall Street Journal reporter John Carreyrou had an undue influence on federal regulators who concluded her blood-testing startup’s technology was a threat to patient health and forced the company to shut its labs.

As she prepares for a trial set for July 28, 2020, Holmes is trying to retrace the steps the reporter took to publish his 2015 scoop and subsequent stories that unraveled Theranos, ultimately leading to the collapse of a company once valued at $9 billion and to her indictment almost exactly a year ago.

The charges portray a scheme by Holmes and former company president Ramesh “Sunny” Balwani, her boyfriend at the time, to lie about the startup’s technology and dupe investors out of hundreds of millions of dollars — while also misleading doctors and patients into thinking Theranos provided accurate, fast and cheap blood tests.

Through pretrial information sharing with prosecutors, Holmes has unearthed Carreyrou’s early contacts with New York state regulators and various federal agencies, as well as his interactions and emails with a doctor in Arizona.

Holmes is pushing prosecutors to turn over every such communication they’re aware of because Carreyrou “went beyond reporting the Theranos story,” her lawyers said in a court filing. He prodded sources to lodge complaints about the company with regulators, and then lobbied agencies to pursue the complaints, according to the filing.

CBS had the background:

Holmes has been charged with felony conspiracy and fraud for allegedly misleading investors, corporate partners and patients with claims about her allegedly revolutionary blood testing equipment.

A grand jury indicted she and her former boyfriend and Theranos president Sunny Balwani on 11 criminal counts of wire fraud and conspiracy to commit wire fraud. The pair also could face fines totaling $2.75 million each.

The 35-year-old Holmes dropped out of Stanford to found Theranos in 2003 and soon became the darling of Silicon Valley accumulating a personal wealth once estimated in the billions.

Theranos was a private health care and life sciences company with the stated mission to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing blood and interpreting the resulting patient data.

The indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors.

Specifically, the defendants claimed that Theranos developed a revolutionary and proprietary analyzer that the defendants referred to by various names, including as the TSPU, Edison, or minilab.