Theranos founder Elizabeth Holmes’ criminal trial set for summer 2020

Posted at 12:18 AM, Jun 29, 2019

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    SAN JOSE (Bay Area News Group) — Disgraced Theranos founder Elizabeth Holmes will go to trial July 28 next year, a judge ruled Friday as Holmes sat with her lawyers in federal court in San Jose.

Jury selection will start on that date with the court to begin hearing evidence Aug. 4, 2020, U.S. District Court Judge Edward Davila ruled, noting that choosing a jury would probably take at least part of a second day.

Davila said he would schedule the trial for three months, per a joint request by federal prosecutors and Holmes’ legal team. That request had also included a September 2020 start date for the trial, but Davila said that would “put us perilously close to the holiday season” and potentially cause problems for jurors.

Holmes is charged with felony conspiracy and fraud for allegedly misleading patients, doctors and investors about her now-defunct Silicon Valley blood-testing startup. A grand jury indicted Holmes and former company president Sunny Balwani in June. They are charged with 11 criminal counts of wire fraud and conspiracy to commit wire fraud.

Federal prosecutors allege Holmes and Balwani claimed their purportedly revolutionary “miniLab” system could use a few drops of blood from a finger-prick to quickly conduct a full range of tests, when in reality it had accuracy and reliability problems, performed limited tests, and was slower than some competing devices. Theranos’ machines had been available for patient use at Walgreens stores in Palo Alto and Arizona.

The FBI has alleged that Holmes and Balwani endangered health and lives. The two have pleaded not guilty to the criminal charges.

During Friday’s hearing, a lawyer for Holmes complained that federal agencies were failing to produce documents relevant to her defense, which her legal team had requested via federal prosecutors. The Food and Drug Administration and Centers for Medicare & Medicaid Services were refusing to hand over the documents despite “no indication of any resistance to any requests made by the government,” Holmes’ lawyer Lance Wade said. For U.S. attorneys, “the doors were wide open and the shelves were full and they could take whatever they wanted,” Wade said. With defense requests, “they’re not willing to provide the same level of cooperation,” Wade said. He asked Davila to order the agencies to produce the documents.

Prosecutor John Bostic countered that the fact that the agencies did not provide the documents, when the request came through the prosecution, showed that U.S. attorneys weren’t getting everything they were asking for either. “The defense is simply wrong when it implies we had carte blanche,” Bostic said. He said prosecutors had given Holmes’ team 20 million pages of documents, and added, “it is not a goal of ours to keep the defense from having the documents” from the agencies. “We’ve done everything we can,” Bostic said.

Bostic told Davila that the defense should subpoena the agencies in pursuit of the documents.

Davila pondered issuing an order to compel lawyers from the Washington, D.C.-based agencies to “come and enjoy San Jose” and explain their reasons for denying documents to the defense. But instead he directed prosecutors to tell the agencies within two weeks “to tell us what they’re going to do or why they’re not going to do it.” Davila said that if the explanation does not satisfy him, “it probably will be tempting the court to issue an order.”

Holmes — who dropped out of Stanford University at 19 to found Theranos — and Balwani face maximum penalties of 20 years in prison and a $2.75 million fine, plus possible restitution, the Department of Justice has said. Although Holmes had, while Theranos was still operating, adopted a black turtleneck as her signature garment a la the late Apple co-founder Steve Jobs, she has been appearing in court in traditional business attire, such as the light gray pantsuit and white blouse she wore Friday.

Last year, the Securities and Exchange Commission hit Holmes with a $500,000 fine. The agency alleged she had committed a “massive fraud” that saw investors pour $700 million into the firm. Before Theranos’ troubles began, it was at one point valued at $9 billion and in 2015, Holmes topped Forbes’ list of America’s richest self-made women with a net worth of $4.5 billion. A year later, Forbes cut her estimated net worth to zero. Theranos shut down in September.

Judge Davila on Friday set the next court date in the case for July 17.

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Ethan Baron