News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
Sign In

News Report Shows How Elizabeth Holmes Tricked VP Joe Biden into Endorsing Theranos’ Fake Blood Testing Technology

Former Vice President received an exclusive tour of a completely fake medical testing laboratory within Theranos, which he found “most impressive”

One thing clinical laboratory leaders and pathologists may still be curious about concerning the whole Theranos affair is how the company founder Elizabeth Holmes could fool so many high-ranking individuals—including then Vice President Joe Biden—into endorsing a completely fraudulent medical laboratory test process.

In “The Wild Way Elizabeth Holmes and Theranos Tricked Joe Biden,” MSN attempts to explain how Holmes and her partner, Theranos president Ramesh “Sunny” Balwani, “managed to hoodwink some of the biggest names in the political and investment world, including former President Bill Clinton, News Corp owner Rupert Murdoch, Henry Kissinger, and four-star General James ‘Mad Dog’ Mattis.”

But it was the lengths to which Holmes and Balwani went to “trick” Joe Biden into endorsing Theranos—and subsequently receive the positive press that followed—that MSN found most intriguing.

According to MSN, in July of 2015 Holmes and Balwani procured Biden’s endorsement by giving the VP a tour of a “completely fake, staged lab.”

Joe Biden with Elizabeth Holmes

“What’s most impressive to me is you’re not only making these lab tests more accessible, you’re charging historically low prices, which is a small fraction of what is charged now, while maintaining the highest standards, and empowering people whether they live in the barrio or a mansion, putting them in a position to help take control of their own health,” stated then VP Joe Biden (above with Elizabeth Holmes) in a Theranos press release. Sadly, many clinical laboratory leaders who were skeptical and outspoken about Theranos’ claims were ignored by the press. (Photo copyright: ABC News.) 

Wall Street Journal Reporter Exposes Theranos Fraud

According to a 2018 article by John Carreyrou which was part of his expose´ of Theranos published in The Wall Street Journal, “Ms. Holmes and Mr. Balwani wanted to impress Vice President Biden with a vision of a cutting-edge, automated laboratory. Instead of showing him the actual lab with its commercial analyzers, they created a fake one, according to former employees who worked in Newark. They made the microbiology team vacate a room it occupied, had it repainted, and lined its walls with rows of [Theranos] miniLabs stacked up on metal shelves.”

And the ruse worked. A 2015 Theranos press release outlined the visit at the time and stated that Biden found the facility inspiring and was impressed by the work being done by the company.

“I just had a short tour and I’m glad because you can see first-hand what innovation is all about just walking through this facility. This is the laboratory of the future,” Biden said in the press release.  

Joe Biden and Elizabeth Holmes

In 2015, then Vice President Joe Biden toured the Theranos facility with Elizabeth Holmes, observed their supposedly innovative finger stick test system, and met with several Theranos employees. Later reports exposing the fraud stated that Holmes and Balwani were desperate to obtain Biden’s approval as it would provide positive press for Theranos, a good reputation within the industry, and lure potential investors. Theranos later tweeted a photo (above) of the visit showing Biden and Holmes walking amongst numbered blood-testing machines with a huge Theranos logo banner in the background. (Photo copyright: Connor Radnovich/The Chronicle.)

Biden’s visit occurred just a few months before Carreyrou’s Wall Street Journal report questioned the efficacy of Theranos’ blood testing technology and alleged the lab testing company tried to cover up its failures and mislead investors and patients.

Prior to that hard-hitting exposé, Holmes was heralded by the media as a star in the field of medicine. She was even prominently featured on magazine covers of influential business periodicals such as Fortune, Forbes, and Inc.

Others Who Were Bamboozled by Holmes and Balwani

Biden was not the only high-profile individual who was fooled by Holmes, Balwani and their billion-dollar con job. Other high-profile people included:

Theranos ceased operations in September of 2018 amidst the exposing of the fraud and inability to locate a buyer for the company. The shutdown rendered all investments in the company worthless.   

Holmes to Receive New Hearing in Federal Court

In January of this year, Holmes was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud for lying to investors about Theranos products. She faces up to 20 years in prison and a fine of $250,000 plus restitution for each count.

However her sentencing, originally scheduled for October 17, was delayed due to her request for a new trial based on comments by former Theranos laboratory director Adam Rosendorff, MD, that he regretted his testimony in Holmes’ fraud trial. Dark Daily covered this in “Clinical Pathologist Once Again at the Center of a National News Story as Theranos Founder Elizabeth Holmes Seeks New Trial.”

Holmes was granted her request and will now undergo a new hearing in federal court, which we covered in “Judge Grants Delay in Ex-Theranos’ CEO Elizabeth Holmes’ Sentencing to Consider Alleged Prosecutor Misconduct.”

And so, clinical laboratory leaders and pathologists now have a better idea as to how Joe Biden was hoodwinked and endorsed a completely fake blood testing laboratory at Theranos. Can he be blamed for his ignorance of clinical laboratory test technology? Probably not. But it makes for interesting reading.

—JP Schlingman

Related Information:

The Wild Way Elizabeth Holmes and Theranos Tricked Joe Biden

Theranos Hosts Vice President Biden for Summit on a New Era of Preventive Health Care

Joe Biden Visited Theranos, Called Elizabeth Holmes ‘Inspiring’

Biden Played Big Role in Promoting Convicted Fraudster Elizabeth Holmes and Theranos

Hot Startup Theranos Has Struggled with Its Blood-Test Technology

Clinical Pathologist Once Again at the Center of a National News Story as Theranos Founder Elizabeth Holmes Seeks New Trial

Ex-Theranos CEO Elizabeth Holmes Testifies She Made Mistakes, Shifts Blame for Some of the Now Defunct Clinical Laboratory Testing Startup’s Failures

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

Kissinger, Mattis, and Murdoch Possible Government Witnesses for the Prosecution against Elizabeth Holmes in Theranos Clinical Laboratory Testing Fraud Case

The federal trial, now set to begin in March 2021, could become a media spectacle given the marquee names on the witness list

Clinical laboratories following the federal criminal proceedings against Theranos founder and former CEO Elizabeth Holmes will have to wait until next year for the case to go to trial. When it does, it could become a media spectacle given the list of prominent witnesses who may be called as government witnesses.

The names, according to a letter that prosecutors sent April 3 to Holmes’ defense team, include former US Cabinet Secretaries Henry Kissinger and James “Mad Dog” Mattis, both of whom sat on the board of the ill-fated diagnostics company. Prosecutors may also call media mogul Rupert Murdoch to testify, the (San Jose) Mercury News reported.

To Fingerstick or Not to Fingerstick

As readers of Dark Daily will recall, Holmes claimed that Theranos had developed ground-breaking blood-testing technology that allowed for a range of blood tests using only 25 to 50 microliters of blood drawn by fingerstick rather than conventional venipuncture. Use of capillary specimens for many clinical laboratory tests was regularly touted by Holmes as one of Theranos’ technology secrets and a key to its plans to disrupt the clinical laboratory marketplace.

However, in “Theranos: Many Questions, But Very Few Answers,” published April 20, 2015, our sister publication, The Dark Report, noted that Theranos had ceased using fingerstick collections in the Phoenix market.

Dark Daily covered the company’s first expansion into an existing clinical laboratory testing market in “Theranos Selects Phoenix Metro to Plant Its Flag and Enter the Competitive Market for Clinical Pathology Laboratory Testing,” May 4, 2015. By then, the company had a stock valuation of $9 billion, and Inc. magazine touted Holmes as, “the next Steve Jobs,” The Washington Post reported.

But then a series of articles by The Wall Street Journal (WSJ) in the fall of 2015 revealed serious problems with Theranos’ management and technology, eventually leading to the company’s downfall.

Charges of Fraud

According to documents filed with the US Department of Justice (DOJ) US Attorney’s Office Northern District of California, on June 15, 2018, a federal grand jury indicted Holmes and Theranos president Ramesh Balwani with 11 counts related to wire fraud. The government alleges one scheme to defraud investors and another to defraud doctors and patients. The defendants each face up to 20 years in prison for each count plus fines and restitution. They have pleaded not guilty.

“Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, even though, according to the government, the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests,” the government stated in an announcement of the indictment. “It is further alleged that the tests performed on Theranos technology were likely to contain inaccurate and unreliable results.”

Prosecutors later added a 12th felony charge tied to a patient’s blood-test result, as Dark Daily reported in July. That charge was later withdrawn and then restored amid legal wrangling about the composition of the grand jury.

The start of the trial has been delayed twice due to the COVID-19 pandemic. Jury selection is now set to begin March 9, 2021, the East Bay Times reported.

Elizabeth Holmes, founder and former CEO of Theranos is back in court
Elizabeth Holmes, founder and former CEO of Theranos, is seen above with her attorneys exiting the Robert F. Peckham US Federal Court in San Jose, California. Jury selection for her trial will begin on March 9, 2021. She has been charged with two counts of conspiracy and nine counts of wire fraud, CNBC reported. (Photo copyright: CNBC.)

Witnesses for the Prosecution

Dark Daily has reviewed the April 3 letter sent by prosecutors to the defense team. It lists witnesses and documents that may be used as evidence in the case. The defense attorneys included the letter in a June 30 filing indicating that they will seek to exclude or limit much of the prosecution evidence.

The April 3 letter “did not identify the particular acts Ms. Holmes supposedly committed and continued to rely on vague themes,” they wrote. “It did not disclose what evidence the government would introduce outside its case in chief. And it did not provide any explanation of which particular acts the hundreds of witness statements and the thousands of pages of discovery it identified would support.”

One section, with the heading “False and misleading representations made to Theranos’ Board of Directors,” includes the following former board members as possible witnesses:

  • Riley Bechtel, former chairman of the Bechtel Corporation, a large engineering and construction company.
  • David Boies, a prominent attorney who also served as the company’s legal counsel.
  • William Frist, a former US Senator from Tennessee who also served as CEO of Hospital Corporation of America.
  • Henry Kissinger, US Secretary of State and National Security Advisor in the Nixon and Ford Administrations.
  • James Mattis, former US Secretary of Defense in the Trump Administration and a lieutenant general in the US Marine Corps.
  • Sam Nunn, former US Senator from Georgia.
  • William Perry, US Secretary of Defense in the Clinton Administration.
  • Robert Shapiro, an attorney best known as a member of the defense team in the O.J. Simpson murder trial.
  • George Shultz, US Secretary of State in the Reagan Administration and US Secretary of the Treasury in the Nixon Administration.

The letter also indicates that some of these former board members could be called to testify about alleged efforts by defendants Holmes and Balwani to conceal a romantic relationship, as well as alleged efforts by the defendants to avoid subjecting Theranos technology to “meaningful comparative tests.”

Murdoch, executive chairman of News Corp., is one of six potential witnesses who may be called to testify about “threats, influence, or vilification of journalists in response to negative coverage with Theranos.” News Corp. is the parent company of The Wall Street Journal.

Another section relates to alleged “false and misleading representations made to journalists.” It references articles published in Wired, Fortune, CNN, The Economist, Medscape, and The New Yorker.

Other sections of the letter offer a broader picture of the government’s case against Holmes and Balwani. It lists potential witnesses and documents related to the following subjects, though some names have been redacted:

  • False and misleading representations directed at insured patients.
  • False and misleading representations directed at doctors.
  • False and misleading representations made to Walgreens.
  • False and misleading representations made to Safeway.
  • Fostering culture of secrecy and forcing employees and others to sign non-disclosure agreements.
  • Restricting access to laboratory areas within Theranos.
  • Harassing, threatening, or otherwise influencing doctors or patients who had negative experiences with Theranos.
  • Blaming and vilifying competing companies.
  • Threatening or intimidating employees and former employees.
  • False and misleading representations made to FDA, CMS, CDPH, and other regulatory organizations.
  • Violations of industry standards and government regulations or rules regarding research and development procedures, medical devices, and clinical laboratory practices.
  • Altering or tampering with third-party medical devices.
  • Multiplexing test results and disregarding outliers to mask inconsistency.
  • Improperly setting and altering reference ranges.
  • Withholding critical test results and other important information from doctors and patients.
  • Decommissioning Theranos’ Laboratory Information System (LIS) database.
  • Obtaining personal benefit from position at Theranos.

One interesting aspect to the rise and fall of Elizabeth Holmes and Theranos is that the clinical laboratory and anatomic pathology professions were never fooled by all the publicity and news coverage of the company. Pathologists and clinical laboratory scientists knew that, over the 10-plus years of Theranos’ existence, its scientific team had never published any research findings of significance in a respected, peer-reviewed journal.

That was strong evidence that Theranos had no new break-through, disruptive, diagnostic technologies that would allow it to perform multiple tests on a single drop of blood that was collected by a fingerstick procedure.

Since the collapse of Theranos and the downfall of Elizabeth Holmes, many in the clinical laboratory profession have hoped that federal prosecutors would prosecute her under the full extent of the law.

—Stephen Beale

Related Information:

Theranos Founder Elizabeth Holmes’ Fraud Case: Mattis, Kissinger, Murdoch are Possible Witnesses

Theranos: A Fallen Unicorn

US v. Elizabeth Holmes, et al.

Theranos Founder Elizabeth Holmes’ Twice-delayed Trial To Start in March: Judge

Theranos: Feds Throw Molotov Cocktail Case at Elizabeth Holmes Over Grand Jury Request

Theranos Founder Holmes Hit with 12th Fraud Charge—Again

Theranos: Deadlines Set after Elizabeth Holmes Claims Coronavirus Changes May Have Violated Her Rights

Theranos Destroyed Patient Test Data, Prosecutor Alleges

Theranos Founder Elizabeth Holmes’ Trial Delayed Again by Coronavirus

Theranos Founder Holmes, on Firm’s Reported False-Negative Pregnancy Test: ‘How Did That Happen?’