Elizabeth Holmes, founder of the disastrously failed blood testing/scam startup Theranos, is trying to have charges against her and former company president Ramesh “Sunny” Balwani thrown out on the grounds they’re “too vague” and leave prosecutors too much room to cherry pick evidence, Bloomberg reported on Monday.
The two are facing 11 charges, including nine counts of wire fraud and two counts of conspiracy. Prosecutors say the duo defrauded investors of $US700 ($1,049) million and potentially harmed patients with bogus blood-testing technology they claimed delivered accurate results with a pin prick’s worth of blood but never worked at all, despite Theranos’ best efforts to pad out samples with extra fluid. Holmes’ defence team claimed that the fraud charges are too nebulous and that the government cannot prove patients were actually harmed by Theranos’ sham blood tests, Bloomberg wrote. Or to put it another way, the defence thinks the indictment is too diluted to actually identify any specific instances of wrongdoing (cough).
“The indictment is full of ambiguity and fudging language, the government is inserting these phrases so they can shift their theory as they go along in the trial,” Holmes attorney Amy Saharia told U.S. District Judge Edward Davila, according to CNBC. “What are the alleged misstatements we should prepare for?”
SFGate reported that Saharia continued to insist in court that Theranos’ blood tests worked just fine and “incorrect blood tests are a fact of life.” She additionally argued that doctors and insured patients never actually suffered any loss of money or property, or in some cases paid Walgreens for the tests rather than Theranos, so the wire fraud charges shouldn’t apply.
Saharia argued that the indictment stated Holmes and Balwani defrauded investors, patients, and doctors “through their company,” creating a “vast number of potential sources of misleading statements” ranging from ads to press releases for prosecutors to selectively pick from, SFGate wrote. Sahari also argued that even if Theranos did knowingly sell inaccurate blood tests, that should actually be a civil matter over “breach of implied warranty.”
Per CNBC, Assistant U.S. Attorney John Bostick responded by reminding the judge that the “defence has been litigating this case for 20 months now” and that if they “truly didn’t understand the nature of the allegations they would have raised this issue earlier.” One example would be when Theranos misled patients that it had the FDA’s seal of approval to reassure them about the accuracy of results, Bostick added. He said the “The most important evidence will be statements made by Holmes and Balwani themselves.”
As to whether anyone was actually harmed, Bostick said, “It doesn’t matter what ended up actually happening. The scheme was the fraud.”
If Davila doesn’t throw out the case, Holmes’ and Balwani’s trial is scheduled to begin in August in San Jose, California. If convicted, they could face up to 20 years in prison and $US2.75 ($4) million in fines. Holmes already settled with the Securities and Exchange Commission in a civil case in 2018, forfeiting millions of (worthless, obviously) Theranos shares, paying half a million dollars in fines, and agreeing to not hold a role as an officer of a public company for the next decade.
Editor's Note: This article has the US release date. We will update this article as soon as possible with an Australian release date, if available.