The government’s lawsuit against Elizabeth Holmes, founder of Theranos, has some key evidence that she intentionally misled doctors, patients and investors in the blood-testing startup.
A fraud report
In 2010, Theranos produced a 55-page report that prominently displayed the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline. Investors such as Lisa Peterson, who managed investments for the wealthy DeVos family, and Walter Mosley, whose clients include the Walton family, testified that the report helped convince them to invest in Theranos.
Problem? Pfizer, Schering-Plough and GlaxoSmithKline did not prepare or sign the report. While prosecutors did not confirm that Ms Holmes created the report, witnesses such as Daniel Edlin, a former senior product manager for Theranos, testified that she signed all of the company’s documents. Investors.
Theranos spent years discussing with the Department of Defense the possibility of deploying its technology on the battlefield, but no partnership materialized.
However, Ms. Holmes told potential investors in a letter that Theranos had signed contracts with the US military – claims that helped convince them to invest, the investors testified.
“We really rely on the fact that they have worked for pharmaceutical companies and the government for many years,” Ms. Peterson said.
Emails between Theranos employees make up the bulk of the prosecution’s exhibits. Some of the emails show when Theranos hid equipment failures, removed abnormal results from test reports and forged proofs of its blood tests.
In one case, Mr. Edlin consulted a colleague on how to demonstrate Theranos’ technology to potential investors.
Michael Craig, a software engineer at Theranos, recommended Mr. Edlin to use the demo app, a special setting on Theranos devices that says “running” or “working” if there’s an error, instead. because of error display.
Mr. Craig wrote in an email that the app would hide bugs that didn’t happen to customers.
“Never a bad thing,” Mr. Edlin replied. “Let’s go with the demo, thanks.”