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Ex-Theranos CEO Elizabeth Holmes Will Be Free on Bail Until September 26 Sentencing Hearing for Criminal Fraud Conviction

Start of ex-Theranos president and COO Sunny Balwani’s federal trial will be pushed to mid-March due to COVID-19 spike in California

Just when most clinical laboratory managers and pathologists thought the guilty verdict in the Elizabeth Holmes fraud case would bring an end to the saga, we learn her chapter in the Theranos story will instead extend another eight months to September when the former Silicon Valley CEO will be sentenced. However, a brand-new chapter will begin in March when the fraud trial of ex-Theranos president and COO Ramesh “Sunny” Balwani begins.

Holmes’ fraud trial concluded on January 3 with the jury convicting her on one count of conspiracy to defraud investors and three counts of wire fraud after seven days of deliberation and nearly four months of trial proceedings.

Holmes remains free on a $500,000 bond while awaiting sentencing.

Elizabeth Holmes

Elizabeth Holmes is seen above arriving at the US District courthouse in San Jose, Calif. On January 3, the former Theranos CEO was convicted on three counts of wire fraud and one count of conspiracy to defraud investors. US District Judge Edward Davila set Holmes’ sentencing date for September 26. Clinical laboratory directors and pathologists who have closely followed the trial will have to wait eight months for the conclusion of this chapter in the Theranos saga. (Photo copyright: The Guardian.)

“I would be utterly shocked if she wasn’t sentenced to some term of imprisonment,” Amanda Kramer, JD, a former federal prosecutor who is now a partner with New York-based Covington & Burling LLP, told NPR.

“What is the sentence that will deter others who have a failing business from making the choice to commit fraud, rather than owning up to the failings and losing their dream?” she added.

Holmes, 37, faces a possible prison sentence of 20 years in prison as well as a $250,000 fine and possible restitution. But some legal experts expect a much shorter prison sentence for the disgraced CEO, who has no prior criminal history and is a first-time mother of a son born last July.

While sentencing typically takes place within a few months of a verdict being reached in a federal criminal trial, US District Judge Edward Davila set 1:30 p.m. September 26, 2022, as the date for Holmes’ sentencing hearing, according to his order dated January 12.

The Mercury News reported the lengthy delay in sentencing may be due to the start of Balwani’s upcoming trial on identical fraud charges. The delay in Holmes’ sentencing will allow for Balwani’s trial to begin in mid-March after being pushed back one month due to a spike in COVID-19 cases in California, The Mercury News reported.

Judge Davila will preside over Balwani’s trial as well.

Jury Acquits Holmes on Patient-related Charges

Holmes was acquitted of conspiracy to defraud patients of the now-defunct blood-testing laboratory and the jury failed to reach a unanimous decision on three other wire fraud charges.

University of Michigan Law Professor Barbara McQuade, a former US Attorney and an NBC News Legal Analyst, told CNBC she expects prosecutors to rethink their strategy in the Balwani trial based on the jury’s acquittal of Holmes on conspiracy and fraud charges involving Theranos patients.

“Knowing that this jury acquitted on all of the patient counts, I think that strategically, they should look to find a more direct way to explain why that is part of the fraud, that they necessarily knew that ultimately patients would be defrauded. And that although they didn’t know these individual patients by name, they knew that they existed in concept,” McQuade said.

One of the jurors in the Holmes’ trial, Wayne Kaatz, told ABC News he and other jurors were dismayed by their inability to come to a unanimous consensus on the three of the charges. A mistrial was declared on those three counts.

“We were very saddened,” Kaatz said. “We thought we had failed.”

Did Holmes Charm the Jury?

When Holmes dropped out of Stanford at age 19 to form Theranos, her goal, she claimed during testimony, was to transform healthcare by creating a blood-testing device capable of performing hundreds of clinical laboratory tests using a finger-stick of blood. She became a Silicon Valley sensation because of her charisma and charm, which she used to sell her dream to big money investors such as Oracle co-founder Larry Ellison and former US Secretary of State George Shultz.

Kaatz acknowledged Holmes’ personality also impacted the jury.

“It’s tough to convict somebody, especially somebody so likable, with such a positive dream,” Kaatz explained to ABC News, noting, however, that he voted guilty on the three counts on which the jury could not agree. “[We] respected Elizabeth’s belief in her technology, in her dream. [We thought], ‘She still believes in it, and we still believe she believes in it.’”

In the light of Holmes’ conviction, McQuade suggested it would not be shocking to see Balwani consider a plea deal in exchange for a lighter sentence.

“Could we perhaps, enter a guilty plea and get a reduction for acceptance of responsibility?” she said. “It’s certainly something that you have to look at.”

And so, the saga continues. Clinical laboratory directors and pathologists who followed Holmes’ trial with rapt interest should prepare for a new set of twists and turns as Ramesh Balwani prepares to face his own day in court.

Andrea Downing Peck

Related Information:

Exclusive: Jury Speaks Out After Convicting Elizabeth Holmes

Elizabeth Holmes: Theranos Fraudster to Avoid Sentencing for at Least Eight Months

Theranos Ex-President’s Fraud Trial Delayed by COVID Surge

United States v. Elizabeth Holmes, et al.: 18-CR-00258-EJD

Former Theranos CEO Elizabeth Holmes to be Sentenced on Sept. 26

Elizabeth Holmes Verdict Complicates Upcoming Trial of Her Ex-Boyfriend and Former Theranos COO Sunny Balwani

Two Important Aspects for Clinical Laboratories to Consider Following Elizabeth Holmes’ Conviction

Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations

Theranos Whistleblower Tyler Shultz Celebrates Former CEO Elizabeth Holmes’ Guilty Verdict by Popping Champagne with Family Members

Theranos Whistleblower Tyler Shultz Celebrates Former CEO Elizabeth Holmes’ Guilty Verdict by Popping Champagne with Family Members

As a Theranos insider and whistleblower, Tyler Schultz was able to provide information about the ongoing failures in medical laboratory testing at the once-high-flying Theranos to regulators and at least one journalist

What’s it like to be a whistleblower in a high-profile clinical laboratory? Few clinical laboratory workers will ever know. But former Theranos employee Tyler Shultz does know, after helping to expose the Silicon Valley blood-testing startup’s deceptions.

The 31-year-old Shultz reportedly celebrated the news of former Theranos CEO Elizabeth Holmes’ conviction on four charges of defrauding investors with champagne, joy, and a healthy dose of vindication, according to NPR.

Tyler Shultz


“This story has been unfolding for pretty much my entire adult life,” Tyler Shultz (above), whistleblower in the Elizabeth Holmes fraud trial, told NPR from his parents’ home in Silicon Valley. “All of a sudden, it was just a weight was lifted. It’s over. I can’t believe it’s over,” he added. A former employee of now defunct clinical laboratory company Theranos, Shultz is CEO at Flux Biosciences, a company he co-founded. (Photo copyright: Deanne Fitzmaurice/NPR.)

Shultz Interns Briefly at Theranos

In 2011, Shultz was a biology major at Stanford University—where Elizabeth Holmes herself briefly attended—when his grandfather, former US Secretary of State George Shultz, a Theranos board member, introduced him to Holmes.

According to NPR, the younger Shultz was so impressed by the charismatic Holmes that he asked her if he could intern with Theranos after his junior year. Following his internship, he accepted a full-time position as a research engineer with Theranos, a stint that lasted only eight months. Shultz quit Theranos the day after he emailed Holmes in 2014 to alert her to failed quality-control checks and other troubling practices within the company’s clinical laboratory.

According a 2016 profile of Shultz in The Wall Street Journal (WSJ), his email to Holmes resulted in a “blistering” reply from then-Theranos President and COO Ramesh “Sunny” Balwani, who “belittled Shultz’s grasp of basic mathematics and his knowledge of laboratory science.”

Yet, Shultz told NPR, “It was clear that there was an open secret within Theranos that this technology simply didn’t exist.”

After leaving Theranos, Shultz became a key source for the WSJ’s 2015 exposé of Theranos. Using an alias, he also contacted state regulators in New York about the Theranos Edison blood-testing device’s shortcomings. In response, Theranos responded with threats of lawsuits and intimidation, the WSJ reported.

In an interview with CBS News, Shultz said, “I am happy that she was found guilty of these crimes and I feel like I got my vindication from that, and I feel good about that.”

Whistleblowers Were Critical to WSJ’s Investigation

Former WSJ reporter John Carreyrou, who authored the newspaper’s investigative series into Theranos, credits the Theranos whistleblowers for blowing the cover on the clinical lab company’s deceptions.

“I would not have been able to break this story without Rosendorff, Tyler, and Erika,” Carreyrou told NPR, referring to Shultz and two additional Theranos whistleblowers: one-time Theranos Laboratory Director Adam Rosendorff and laboratory associate Erika Cheung. “Tyler and Erika were corroborating sources, and that was absolutely critical.”

Dark Daily reported on trial testimony given by four former Theranos clinical laboratory directors in “Another Former Theranos Clinical Laboratory Director Testifies in Holmes’ Fraud Trial about Irregularities with Proprietary Edison Blood-Testing Technology.”

In the interview with CBS News, Tyler described the damage his role as a Theranos whistleblower caused to his relationship with his grandfather, former Secretary of State and Theranos board member George Shultz. Tyler said the elder Shultz did not believe his claims about Theranos’ regulatory deficiencies and the Edison device’s shortcomings until he neared the end of his life.

“That was extremely tough. This whole saga has taken a financial, emotional, and social toll on my relationships. The toll it took on my grandfather’s relationship was probably the worst. It is tough to explain. I had a few very honest conversations with him,” Shultz told CBS News.

While the elder Shultz never apologized to his grandson, Tyler said his grandfather ultimately acknowledged he was right.

“In one of my last conversations with him he told me a story about how he got Elizabeth invited during fleet week in San Francisco to go give a speech to United States Navy sailors. He said with tears in her eyes, she told the room about how she was so honored and humbled that her life’s work would be saving the lives of United States servicemen and women,” Shultz recalled in the CBS News interview.

“He said he could not believe that anybody could get in front of these men and women who are willing to put their lives in front of our country and lie directly to their face as convincingly as she lied,” he added.

George Shultz died in February 2021.

Jury’s Ruling on Defrauding Patients

In an interview with CNBC, Shultz said his one disappointment with the verdict was that Holmes was not found guilty of defrauding patients. Calling the patients “the real victims,” Shultz said, “I did what I did. I stuck my neck out to protect those patients, not to protect Betsy DeVos’ $100 million investment.” (The jury voted Holmes guilty on three counts of wire fraud and one count of conspiracy to commit fraud against Theranos’ investors, but not guilty on conspiracy to defraud and commit wire fraud against Theranos patients.)

Tyler Shultz was listed as a potential witness in the Holmes trial but was not called to take the stand. He—along with many clinical laboratory directors and pathologists who have closely followed the Holmes trial—will now await news of Holmes’ sentencing. Holmes could face up to 20 years in prison for each guilty verdict, but she’s likely to receive a lighter sentence.

The trail of Ramesh Balwani is expected to begin sometime in March. That trial can be expected to produce additional revelations about the problems of Theranos and how and why management is alleged to have knowingly reported inaccurate clinical laboratory test results to thousands of patients.

—Andrea Downing Peck

Related Information:

Theranos Whistleblower Celebrated Elizabeth Holmes Verdict by ‘Popping Champagne’

Theranos Whistleblower Says He’s ‘Happy’ Elizabeth Holmes Was Found Guilty

I am Proud I Blew Whistle on Theranos, Says Tyler Shultz

‘I Feel Like I Got My Vindication’: Theranos Whistleblower Reacts to Elizabeth Holmes’ Conviction

Prosecutor in Theranos Case Closes by Telling Jury that Elizabeth Holmes ‘Chose Fraud Over Business Failure’

Another Former Theranos Clinical Laboratory Director Testifies in Holmes’ Fraud Trial about Irregularities with Proprietary Edison Blood-Testing Technology

Former Theranos Lab Director and Staff Testify in Ongoing Elizabeth Holmes Fraud Trial That They Voiced Concerns about Reliability and Accuracy of Edison Blood-Testing Device

Ex-Theranos CEO Elizabeth Holmes Takes Witness Stand in Her Own Defense: Admits to Using Pharma Giants’ Logos on Reports to Investors, But Claims No Intent to Deceive

Former CEO also testified that she believed company’s proprietary blood-testing technology could perform ‘any’ clinical laboratory blood test

One relevant question in the federal fraud trial of ex-Theranos CEO Elizabeth Holmes was whether she would testify on her own behalf. That question was answered shortly after the government rested its criminal fraud case against the former Silicon Valley clinical laboratory testing company founder. Holmes took the stand in her own defense, a risk her defense team hopes will pay off in her favor.

During her first three days of testimony leading up to the Thanksgiving holiday break, Holmes—who faces 11 counts of fraud and conspiracy related to her tenure as founder and CEO of Theranos—made headlines by admitting she did personally put the logos of pharmaceutical giants Pfizer and Schering-Plough on reports she sent to Theranos investors and executives at Walgreens and Safeway. She expressed regret for doing so to the jury, but claimed her intent was not to deceive but to give credit to others.

“This work was done in partnership with these companies, and I was trying to convey that,” she testified, according to a trial coverage from Ars Technica.

When asked if she realized that others would assume the pharmaceutical companies—not Theranos—were the authors of the report, Holmes replied, “I’ve heard that testimony in this case, and I wish I’d done it differently.”

If found guilty, Holmes—who once claimed Theranos’ Edison proprietary blood-testing technology would to be able to complete as many as 200 clinical laboratory tests using a single finger-stick of blood—could face maximum penalties of 20 years in prison, a $2.75 million fine, and possible restitution.

Illustration depicting ex-Theranos CEO Elizabeth Holmes testifying in court

The illustration above depicts ex-Theranos CEO Elizabeth Holmes testifying on her own behalf. Former Santa Clara County prosecutor Steven Clark, JD, told The Mercury News, “(T)he best person to say what Elizabeth Holmes’ intent was is Elizabeth Holmes, and that’s why I think she’s taking the stand. … I think the jury will like her.” That remains to be seen. But there’s no doubt that Clinical Laboratory Directors should take a strong interest in the outcome of this trail. (Graphic copyright: Vicki Behringer/Reuters.)

Holmes Testifies She Believed the Edison Device Could Perform “Any” Blood Test

In its trail coverage, NPR described Holmes’ first three days of testimony “as having involved deflecting responsibility, pointing to the expertise of the Theranos board of directors, lab staff, and other company employees whom Holmes has suggested were close to how [Theranos’] blood analyzers worked.”

According to Reuters, Holmes’ defense team is arguing that Holmes’ always-rosy forecasts about her company’s technology and finances were based on her belief the proprietary Edison device worked as advertised, which, in turn, was based on feedback from pharmaceutical companies, her own employees, and the military.

During her testimony, Holmes compared a traditional blood-testing device to Theranos’ “3.0” device, which she said would reduce the human-error rate that can occur during blood sampling.

“If we had the ability to automate much of that process, we could reduce the error associated with traditional lab testing,” she told the court.

Reuters reported that Holmes told jurors her confidence in the Theranos device was in part due to how well the unit had performed in studies completed in 2008 and 2009, including those run by drug companies such as Novartis.

The Mercury News described Holmes as speaking with “confidence—and frequently a small smile”—during her opening day of testimony.

Asked by one of her lawyers, “Did you believe that Theranos had developed technology that was capable of performing any blood test?” Holmes responded, “I did.”

Holmes Testifies about Military’s Alleged Use of Edison Device

Prosecutors maintain that Holmes knew Theranos’ proprietary blood-testing technology had serious accuracy issues yet lied about its capabilities and use to lure investors. One of those false claims included allegedly stating the US military was using the Edison device on the battlefield. Earlier in the trial, CNBC reported, prosecution witness Brian Grossman, Chief Investment Officer at PFM Health Sciences, which invested $96 million into Theranos, testified he was told in a 2013 meeting with Holmes and Balwani that Theranos technology was being used in medical-evacuation helicopters.

Dark Daily covered court testimony on the military’s alleged use of the Theranos blood-testing device in “Prosecutors in Elizabeth Holmes’ Federal Fraud Trial Question Witnesses about Theranos’ Edison Technology and the Inaccurate Medical Laboratory Test Results It Produced.”

However, on the witness stand, Holmes described Theranos’ projects with the US military as much more limited in scope than the descriptions outlined by investors testifying for the prosecution.

According to The Wall Street Journal (WSJ), Holmes told jurors a 2010 partnership between Theranos and a US Army Institute of Surgical Research doctor in Texas looked into using the Theranos device to measure blood markers to detect kidney performance. A second project involved the military’s Africa Command, which was determining whether the device could withstand high temperatures. Holmes testified the devices used in Africa “held up well,” though some modifications were needed, and some issues were revealed with the touchscreen.

Should Holmes Have Testified on Her Own Behalf?

Trial experts maintain Holmes’ decision to testify in her own defense could backfire.

“It’s always a risk to put your client on because if they make a mistake they can sink the whole case,” former Santa Clara County prosecutor Steven Clark, JD, told The Mercury News. He added, “what’s at issue here is Elizabeth Holmes’ intent. And the best person to say what Elizabeth Holmes’ intent was is Elizabeth Holmes, and that’s why I think she’s taking the stand. She’s very charismatic. She’s really good on her feet. And I think the jury will like her.

“This is the pitch meeting of her life,” Clark added. “She’s going to be explaining herself to 12 people as to what was in her mind.”

Judge Drops One Count Due to Prosecution Error, Government Rests Its Case

Holmes is now charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud after the government dropped one count of fraud from the indictment. According to WSJ coverage of the trial, US District Judge Edward Davila blocked a patient named in the indictment as “B.B.” from testifying because of a filing error by the prosecution. The judge’s decision resulted in the government dropping one count.

The government rested its case against Holmes on November 19 following testimony from independent journalist Roger Parloff, who wrote a flattering 2014 Fortune magazine story on Holmes. He later redacted his earlier writing in another Fortune article, titled, “How Theranos Misled Me.”

The government alleged Holmes used media publicity as part of her scheme to defraud investors, patients, and physicians. All totaled, 29 witnesses appeared for the prosecution, the WSJ reported

Former Theranos Chief Operating Officer Ramesh “Sunny” Balwani—Holmes’ one-time boyfriend—faces similar charges of defrauding patients, investors, and physicians. His trial is expected to begin in January 2022.

Clinical laboratory managers and pathologists who have watched the federal court proceedings with keen interest should expect the trial to wrap up at the conclusion of Holmes’ testimony, just in time for the Balwani fraud trial to begin. 

—Andrea Downing Peck

Related Information:

Elizabeth Holmes Claims She Forged Pharma Reports—for All the Right Reasons

Elizabeth Holmes Describes Limited Military Research Partnerships

Government Rest Its Case Against Elizabeth Holmes

Elizabeth Holmes Takes Witness Stand in Theranos Trial after Prosecution Rests its Case

Holmes Defends Belief in Theranos Technology at Her Fraud Trial

Elizabeth Holmes Testifies That Theranos Had ‘Successes’ with Pharmaceutical Companies

Hedge Fund Investor Tells Jurors in Holmes Trial That Theranos Lied about Finger-Prick Tech and Military Use

This CEO Is Out for Blood

How Theranos Misled Me

Another Former Theranos Clinical Laboratory Director Testifies in Holmes’ Fraud Trial about Irregularities with Proprietary Edison Blood-Testing Technology

Corporate Executives and Mega-Rich Investors Testify in Elizabeth Holmes’ Federal Fraud Trial That They Were Misled by Theranos’ Claims about the Edison Blood-Testing Device

Prosecutors in Elizabeth Holmes’ Federal Fraud Trial Question Witnesses about Theranos’ Edison Technology and the Inaccurate Medical Laboratory Test Results It Produced

Have Low-cost Direct-to-Consumer Genetic Tests Changed Census Results in America?

Citizens claiming racial diversity increased by 276% in the 2020 census, leading experts to wonder if racial diversity is increasing or if people are simply electing to identify as such and how this trend will affect healthcare

Once again, we see another unexpected consequence to expanded DNA testing done by consumers for their own interests and needs. As NPR recently reported in “The Census Has Revealed a More Multiracial US. One Reason? Cheaper DNA Tests,” the growing trend of ordering low-cost direct-to-consumer (DTC) genetic testing to identify cultural heritage (where a family came from) and genealogy (to connect with extant family members) has educated healthcare consumers more about their cultural roots.

Such knowledge, NPR speculates, is allowing people to complete their census survey with more accurate “heritage” classifications.

How does this affect clinical laboratories? As Dark Daily covered in “Popularity of Direct-to-Consumer Genetic Tests Still Growing, Regardless of Concerns from Provider and Privacy Organizations,” popularity of at-home testing—including DNA testing—coupled with demand for increasingly personalized medicine (PM) in healthcare, will likely change the types of test orders medical laboratories receive from physicians.

What Did the 2020 Census Show?

The last US census showed an interesting change compared to previous census surveys. More Americans identified themselves as racially diverse than in previous censuses. Scientists in multiple specialty areas—including demographics, sociology, genetics, and more—are asking why.

According to federal Census Bureau data, in the most recent census, people who identify as more than one race rose by 276%! Scientists are only just beginning to hypothesize the reasons for this increase, but three potential factors, NPR reported, have emerged:

  • More children are being born to parents who identify with racial groups that are different from one another.
  • In 2017, the federal government made minor changes to how the census asked questions about race and in how those answers were categorized.
  • People are reconsidering what they want the government to know about their identities, according to Duke University Press.

The increased incidence of DNA testing for cultural heritage may be an additional factor in the different ways people identified themselves during the census, driving its popularity, NPR noted. More people are purchasing at-home DNA tests to learn where their ancestors lived and came from, and their family’s genealogy.

“Exactly how big of an effect these tests had on census results is difficult to pin down,” NPR reported. “But many researchers agree that as the cost of at-home kits fell in recent years, they have helped shape an increasing share of the country’s ever-changing ideas about the social construct that is race.”

How the Census Alters Government Policy

Pew Research noted that, although only about 16% of Americans have taken an ancestry DNA test, the marketing efforts of “companies such as 23andMe and Ancestry.com, which operates the AncestryDNA service, should not be underestimated,” NPR reported.  They have a wide reach, and those efforts could be impacting how people think about race and ethnic identity.

For most of human history, social experience and contemporary family history have been the drivers of how people identified themselves. However, low-cost DTC genetic testing may be changing that.

Jenifer Bratter, PhD

“The public has kind of taken in the notion that you can find out ‘who you are’ with a test that’s supposed to analyze your genes,” Jenifer Bratter, PhD (above), a Professor of Sociology at Rice University who studies multiracial identity, told NPR. “What that does for anyone who does work in racial identity and racial demography is cause us to think through how genetic ideas of race are in public circulation.” Desire by healthcare consumers to know their risk for chronic disease has already driven a marked increase in demand for low-cost DNA testing, which has also affected the types of test orders clinical laboratory are receiving from doctors. (Photo copyright: Rice University.)

One concern that sociologists and demographers have about this trend is that the US census is an important tool in policy, civil rights protections, and even how researchers measure things like healthcare access disparities.

“You’re going to have a lot more people who are not part of marginalized groups in terms of their social experiences claiming to be part of marginalized groups. When it comes to understanding discrimination or inequality, we’re going have very inaccurate estimates,” says Wendy Roth, PhD, Associate Professor of Sociology, University of Pennsylvania, told NPR.

Cherry-picking One’s Racial Identity

In “Genetic Options: The Impact of Genetic Ancestry Testing on Consumers’ Racial and Ethnic Identities,” published in the American Journal of Sociology, Roth and her fellow researchers theorized that DTC at-home DNA test-takers do not accept the results fully, but rather choose based on their identity aspirations and social appraisals.

They developed the “genetic options” theory, “to account for how genetic ancestry tests influence consumers’ ethnic and racial identities.” They wrote, “The rapid growth of genetic ancestry testing has brought concerns that these tests will transform consumers’ racial and ethnic identities, producing “geneticized” identities determined by genetic knowledge.”

However, a more healthcare-related motivation for taking a DTC DNA test is to learn about one’s potential risks for familial chronic health conditions, such as cancer, heart disease, and diabetes, etc.

In “With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies are Investigating Ways to Commercialize the Aggregated Genetics Data They Have Collected,” Dark Daily noted that, faced with lagging sales and employee layoffs, genomics companies in the genealogy DNA testing market are shifting their focus to the healthcare aspects of the consumer genomics data they have already compiled and aggregated.

According to Joe Grzymski, PhD, Chief Scientific Officer at Renown Health and Associate Research Professor of Computational Biology at Desert Research Institute, a research campus of the University of Nevada Reno, the consumer market is going to become more integrated into the healthcare experience.

“Whether that occurs through your primary care doctor, your large integrated health network, or your payor, I think there will be profound changes in society’s tolerance for using genetics for prevention,” he told GenomeWeb.

Regardless, as Dark Daily reported in 2020, sales of genetic tests from Ancestry and 23andMe show the market is cooling. Thus, with less than 20% of the population having taken DNA tests, and with sales slowing, genetics testing may not affect responses on the next US census, which is scheduled for April 1, 2030.

In the meantime, clinical laboratory managers should recognize how and why more consumers are interested in ordering their own medical laboratory tests and incorporate this trend into their lab’s strategic planning.

—Dava Stewart

Related Information:

The Census Has Revealed a More Multiracial US. One Reason? Cheaper DNA Tests

Percentage of Population and Percent Change by Race: 2010 and 2020

Revisions to the Standards for the Classification of Federal Data on Race and Ethnicity

America’s Churning Races: Race and Ethnicity Response Changes Between Census 2000 and the 2010 Census

About Half of Americans Are OK with DNA Testing Companies Sharing User Data with Law Enforcement

Genetic Options: The Impact of Genetic Ancestry Testing on Consumers’ Racial and Ethnic Identities

With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies Are Investigating Ways to Commercialize the Aggregated Genetics Data They Have Collected

Consumer Reports Identifies ‘Potential Pitfalls’ of Direct-to-Consumer Genetic Tests

Popularity of Direct-to-Consumer Genetic Tests Still Growing, Regardless of Concerns from Provider and Privacy Organizations

Theranos Founder and Former CEO Elizabeth Holmes’ Federal Criminal Fraud Trial Finally Is Under Way in California

Court documents show Holmes’ defense strategy includes accusing ex-boyfriend and former COO Balwani of ‘intimate partner abuse’ that impacted her ‘state of mind’

It has started! The long-awaited criminal trial of former Theranos CEO Elizabeth Holmes is underway in a federal courthouse in Silicon Valley. Across the profession of medical laboratory medicine, there is keen interest in the story of Holmes and her now-defunct clinical laboratory company Theranos.

This next chapter in the drama began on September 8 with opening arguments. Federal prosecutors came out strong, claiming Holmes was “a manipulative fraudster who duped investors and patients alike and knew the whole time that she was hoodwinking them,” according to NPR.

“This is a case about fraud, about lying, and cheating to get money,” said Assistant US Attorney Robert Leach, NPR reported. “It’s a crime on Main Street, and it’s a crime in Silicon Valley,” he added.

Not surprisingly, Holmes’ defense team had a different take, claiming Holmes was simply “a hardworking, young startup executive who believed in the mission of the company, only to see it buckle in the face of business obstacles,” NPR reported. “They argued that she placed blind faith in the No. 2 executive at the company [Balwani] and overly trusted lab directors, who the defense team says were legally responsible for how the labs were run.”

Holmes Claims Abuse at the Hands of Former Theranos COO Balwani

Many pathologists and clinical laboratory managers are ready to watch and learn what unfolds in the opening stages of Holmes’ long-delayed federal criminal fraud trial. During the jury selection process, recently unsealed court documents showed that Holmes’ defense planned to include claims she was abused by her then boyfriend, Theranos Chief Operating Officer Ramesh Balwani.

This surprising development adds yet another twist to the tale of the disgraced Silicon Valley executive and her defunct clinical laboratory testing company.

The hype surrounding the once-high flying startup, which in 2015 reached a peak valuation of $9 billion, began unraveling that same year when a Wall Street Journal (WSJ) investigation exposed the company’s alleged deceptions and questionable practices related to its finger-prick blood-testing technology.

Fast-forward six years—Theranos is now gone but its top executive continues to make headlines, not as a laboratory science wunderkind, but as a criminal defendant.

Holmes, 37, has pleaded not guilty to all charges. Her former consort and ex-Theranos COO Ramesh Balwani also pleaded not guilty to all charges. He will be tried separately from Holmes.

Elizabeth Holmes and her husband William Evans

Elizabeth Holmes, founder and former CEO of defunct clinical laboratory testing company Theranos, is seen leaving the Robert F. Peckham US Courthouse with husband William Evans following opening arguments in her federal trial on September 8. (Photo copyright: Reuters/Peter DaSilva.)

Dozens of Potential Jurors Removed for Alleged Bias

On August 31, in-person questioning of prospective jurors began in Holmes’ federal fraud trial in San Jose, California. The process did not go well. As CNBC reported, dozens of potential jurors were removed from the jury pool due to potential bias in the case.

“Thirty to forty of the remaining jurors have consumed substantial, and I mean lengthy extrajudicial material, about the case and about the defendant,” defense attorney Kevin Downey, JD of Washington, D.C.-based Williams and Connolly, LLP, told Judge Edward Davila, CNBC reported. “We’re very vulnerable to any of the jurors commenting in some ways as either the court or lawyers conduct voir dire about the content of the media they’ve seen.”

Voir dire is the legal term for preliminary examinations of jurors, which in this initial screening was done by reviewing potential juror questionnaires.

Holmes’ defense attorneys, according to CNBC, previously expressed concerns about “inflammatory” media coverage of the case. However, Assistant US Attorney Jeffrey Schenk maintained, “Less than half of the individuals that filled out the questionnaire had prior exposure to Holmes and Balwani. One juror saying something during the voir dire process that could be overheard is a risk in every court case,” CNBC reported.

Holmes Claims ‘Mental Condition Bearing on Guilt’

A report by the Independent notes that newly unsealed court documents which were first reported by NPR reveal that Holmes will mount a defense that includes claims of “intimate partner abuse” by Balwani, 56, during their past relationship.

 “The documents show that Ms. Holmes will describe how Mr. Balwani controlled what she ate and drank, how she dressed, and who she spoke to, while also alleging he threw ‘sharp’ objects at her,” the Independent reported.

NPR reported that court documents indicate Holmes is likely to take the stand and testify at her trial. She will not be presenting an insanity defense but will put forth a “defense of a mental condition bearing on guilt” that was the result of partner abuse and that impacted her “state of mind” at the time of the alleged crimes.

Court documents filed by Balwani’s defense attorneys label Holmes’ allegations as “salacious and inflammatory.”

“In truth, Ms. Holmes’ allegations are deeply offensive to Mr. Balwani, devastating personally to him and highly and unfairly prejudicial to his defense of this case,” defense attorney Jeffrey Coopersmith, JD, Principle and founder of Coopersmith Law and Strategy, wrote in the filing.

The Theranos Saga Continues …

In “Former Theranos CEO Elizabeth Holmes Is Pregnant, Causing a Further Delay in Her Trial Date,” Dark Daily reported that Holmes’ trial had been delayed multiple times since she was first was indicted on 11 counts of wire fraud and conspiracy to commit wire fraud in 2018. The COVID-19 pandemic, and more recently Holmes’ pregnancy, delayed the start of her trial until August.

CNBC reported that Holmes gave birth on July 10, 2021, in Redwood, California. The baby’s father is William Evans, heir to the Evans Hotels chain in California, The Sun reported.

Balwani’s criminal fraud trial is scheduled to begin with jury selection on January 11, 2022. Both Holmes and Balwani face maximum penalties of 20 years in jail and a nearly $3 million fine, plus possible restitution if found guilty on all counts.

It is a rare thing for owners of a clinical laboratory company accused of fraud to come to trial and receive so much media attention. In the weeks leading up to the trial, medical laboratory managers and pathologists could read a wide variety of news stories about the impending trial and the legal strategies expected by the attorneys for both the plaintiffs and the defendants.

Thus, everyone interested in this trial and its outcome will likely have the equivalent of a front row seat because so many journalists are covering this trial.

Andrea Downing Peck

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