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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

Federal Prosecutors Signal That Accuracy of Theranos’ Blood Tests Will Be Centerstage in August Fraud Trial

Pregnant former Theranos CEO Elizabeth Holmes makes her first court appearance in 15 months as pre-trial maneuvering continues in court case involving clinical laboratory tests

During pre-trial hearings for the August fraud trial of former Theranos CEO, Elizabeth Holmes, federal prosecutors signaled that the accuracy of Theranos’ blood tests will be center stage in their arguments. This latest installment in the continuing saga of defunct medical laboratory testing company Theranos took place when a now-pregnant Holmes made her first in-person court appearance in 15 months.

Clinical laboratory scientists have watched with interest as the often-delayed fraud trial inched closer to its new August 31 start date. After being delayed multiple times by the COVID-19 pandemic, United States District Court Judge Edward Davila ruled in March that the trial would be postponed from mid-July to late August due to Holmes’ pregnancy. She is due to give birth in July.

Do Prosecutors Lack Proof Theranos’ Blood Testing Technology Is Inaccurate?

As Dark Daily previously reported, Holmes faces 12 counts of wire fraud charges for alleged false claims that Theranos created a revolutionary technology for performing a wide range of clinical laboratory tests using a tiny amount of blood.

In its 2015 investigative report, The Wall Street Journal (WSJ) alleged Theranos had not disclosed publicly that the vast majority of its tests were performed with traditional machines purchased from Siemens AG and other companies, not its so-called breakthrough proprietary technology.

The recent three-day hearing provided Holmes’ attorneys and federal prosecutors with an opportunity to present arguments regarding what evidence can be presented at the upcoming trial.

In a recent article, the WSJ reported that Holmes’ attorneys argued the US Attorney’s Office for the Northern District of California built its case on anecdotal evidence.

According to the WSJ article, Holmes’ defense team is trying to block the government from calling patients and medical professionals to testify about the accuracy of Theranos’ blood test results. At the hearing, attorney Amy Saharia, a Williams and Connolly LLP partner, maintained prosecutors lack scientific proof Theranos tests were inaccurate. She called this lack of scientific evidence a “gigantic hole” in the government’s case.

“This trial is going to be a sprawling mess of irrelevant, prejudicial evidence,” she told the court, the WSJ reported.

Saharia added, “We have all become very familiar with testing this year. Testing involves many different variables,” CNBC reported. “What the government offers is without scientific basis, they have to establish Theranos technology was responsible for erroneous results. Just because it happened doesn’t mean it was because of Theranos technology.”

Pregnant Elizabeth Holmes (above), who is due to give birth in July, is seen entering the courtroom for a pretrial hearing in San Jose, Calif., in the US government’s fraud case against the former Theranos CEO. In the hearing, federal prosecutors indicated the accuracy of Theranos’ clinical laboratory tests will be at the center of their arguments. (Photo copyright: Mercury News.)

Defense Tries to Block Pathologists’ Testimony

During the second day of hearings, federal prosecutors responded to defense attorneys’ efforts to block clinical pathologist Stephen Master, MD, PhD, from testifying. Defense attorneys argued the government is using Master as a “parrot” and argue his views on Theranos’ blood tests are “based on emails and customer complaints” not personal familiarity with the tests, CNBC reported. Master is Division Chief and Director, Metabolic and Advanced Diagnostics at Children’s Hospital of Philadelphia, and an Associate Professor of Pathology and Laboratory at University of Pennsylvania’s Perelman School of Medicine.

Assistant US Attorney Robert Leach, however, said, “Miss Holmes went out, told the world and told investors: we have tests with the highest accuracy rate,” adding that testimony from their expert witness “puts the lie to that,” CNBC reported.

Before Theranos was dissolved in 2018, Holmes rose to rock star status in Silicon Valley. She graced magazine covers, rubbed elbows with VIPs, and became known for her Steve Jobs-like signature black turtleneck.

In his summary of Holmes’ 2016 presentation at the annual meeting of the American Association of Clinical Chemistry (AACC), titled, “After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology,” Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report, wrote, “It would be safe to summarize most reactions as skeptical.”

Holmes’ presentation, Michel noted, was met with suspicion as her credibility with the media and clinical laboratory scientists eroded. “Holmes did not fool many in the audience.”

One clinical chemist who attended the AACC meeting said, “I came to see scientific data about this remarkable technology that could do up to 70 medical laboratory tests on a single drop of capillary blood. Instead, I heard her talk about the new corporate strategy at Theranos, including the details as to how their analyzer works. The data that followed had nothing to do with anything but their new analyzer.”

Prosecutors Claim Fraud Paid for Holmes’ Extravagant Lifestyle

Holmes’ celebrity status helped fuel Theranos’ rapid valuation growth, which reached a high of $10 billion in 2015. But her gold-plated lifestyle became a point of contention during the recent pre-trial hearing. Prosecutors maintained that Theranos’ fraud propelled Holmes’ extravagant spending.

“In addition to her salary, the company provided for her luxurious travel on private jets and expensive lodging,” Assistant US Attorney John Bostic told CNBC. “The point here is the so-called success of Theranos was entirely the product of fraud.”

But according to CNBC, the judge “pushed back” on the government’s argument, stating Holmes’ benefits likely were on par with other CEOs. “What’s the value that she’s at the Four Seasons or a Motel 6?” the judge asked the prosecutors.

CNBC reported the two sides also sparred over whether jurors will learn about Holmes’ private text messages and regulatory reports.

Holmes and former Theranos President and Chief Operating Officer Ramesh Balwani have both pleaded not guilty. Balwani will face a separate trial after Holmes’ court case concludes.

Clinical laboratory scientists will watch with interest as the Holmes and Balwani trials finally get under way, since the accuracy of Theranos’ blood tests will be under the microscope along with Holmes’ participation in the alleged fraud.

Andrea Downing Peck

Related Information:

Elizabeth Holmes Makes First Courtroom Appearance in Over a Year

Hot Startup Theranos Has Struggled with its Blood-Test Technology

Elizabeth Holmes Lavish Lifestyle Looms over Theranos Fraud Case

Accuracy of Theranos Blood Tests at Heart of Elizabeth Holmes’ Criminal Case

Elizabeth Holmes Reappears in Court for First Time in 15 Months Putting Silicon Valley Culture Under Scrutiny

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of its TechnologyFederal Prosecutors Add a 12th Felony Fraud Charge in Latest Criminal Indictment Against Theranos Founder Elizabeth Holmes

Previously High-Flying Theranos Provides Clinical Laboratories and Pathology Groups with Valuable Lesson on How Quickly Consumer Trust Can Be Lost

Affected patients speak about emotional, financial, and medical costs of receiving inaccurate results from the startup’s faulty Edison ‘finger-stick’ blood draw testing device

Healthcare consumers trust America’s clinical laboratories and anatomic pathology groups to provide accurate test results. When those test results are inaccurate, the loss of public trust can trigger a sharp decline in referrals/revenue and draw an avalanche of lawsuits by those harmed by inaccurate results.

The most recent example of this object lesson is disgraced blood testing company Theranos, previously estimated to be worth $9 billion but now struggling to stay afloat. The once high-flying startup has been brought to the edge of bankruptcy in the aftermath of a fraud settlement with the Securities and Exchange Commission (SEC), sanctions from the Centers for Medicare and Medicaid Services (CMS), investor lawsuits, consumer lawsuits, and a settlement with Walgreens over claims about Theranos’ Edison portable blood analyzer.

Theranos first made its unproven finger-stick blood draw device available to consumers in September 2013, when it announced a partnership with drugstore chain Walgreens (NASDAQ:WBA). At its height, Theranos operated 40 “Wellness Centers” in Walgreens stores in Arizona and a single location in California, which were the source of much of its revenue. USA Today reported the metro Phoenix-area centers alone sold more than 1.5 million blood tests, which yielded 7.8 million tests results for nearly 176,000 consumers. Theranos shuttered the wellness centers in 2016 after CMS inspectors found safety issues at Theranos’ laboratories in California and a Wall Street Journal (WSJ) investigation raised questions about the company’s testing procedures and accuracy claims. Ultimately, Theranos voided the results of all blood tests run on its Edison device from 2014 through 2015.

Breast-cancer survivor Sheri Ackert (above) told the WSJ she panicked when blood-test results from Theranos indicated her cancer may have reoccurred or were indicative of a rare type of tumor. After being retested by a different clinical laboratory, her results were found to be normal. Click here to watch a WSJ video about Ackert’s experience. (Photo/video copyright: Mark Peterman/Adya Beasley/Wall Street Journal.)

USA Today outlined the impact Theranos’ supposedly low-cost, cutting-edge technology had on several customers:

  • A woman inaccurately diagnosed with the thyroid condition Hashimoto’s disease changed her lifestyle, made unnecessary medical appointments, and took medication she didn’t need;
  • A woman inaccurately diagnosed with the autoimmune disease Sjögren’s syndrome was checked for food allergies before being retested and found not to have an autoimmune condition; and,
  • An Arizona resident who had heart surgery visited a Theranos clinic five times to monitor the results of blood-thinning drug warfarin and was switched to a different drug. He had to have a second heart surgery to drain blood from the pericardial sac and believes more accurate test results could have averted the follow-up operation.

Arizona resident Steven Hammons visited a Theranos clinic several times to have his blood tested. He’d been placed on blood thinners following heart surgery. He was taken off the blood thinners presumably based on the results of those tests. However, as USA Today reported, one test result was later found to be inaccurate. Hammons, who underwent a second procedure to remove blood that had built up around his heart, told USA Today he was concerned about the safety of his fellow citizens.

“That makes me very concerned and worried for the safety of other Arizonans,” said Hammons, who once worked in the medical services division of a private health insurance company. “Government had a role in patient safety. The powers that be dropped the ball.”

Arizona Attorney General Mark Brnovich spearheaded a lawsuit against Theranos under the state’s Consumer Fraud Act, which led to a $4.65 million settlement covering full refunds for every Arizona customer who used the company’s testing services.

“Theranos may have not only had some erroneous test results, but they may have misread my rising blood pressure level as well,” Brnovich told The Republic in a 2017 article announcing the state’s fraud settlement with Theranos. “They said that about 10% of the results were inaccurate. The problem is, as an Arizona consumer, you don’t know whether you were part of that class or not.”

Downfall of a Once-Vaunted Clinical Laboratory Company

Dark Daily and sister publication The Dark Report have written extensively about these events. Former CEO Elizabeth Holmes founded Theranos in 2003 when she was just 19-years old. By 2013, Holmes had become a media sensation based on her claims that “Theranos had developed a medical technology that could do what seemed to be impossible: Its secret machines could run thousands of medical tests using the blood from a tiny finger-prick, and do so quickly and cheaply,” Bloomberg reported in a recent article outlining Holmes’ fall from grace.

While Holmes continues in the role of Chairman of Theranos’ Board of Directors, she was stripped of control of the company as part of the SEC settlement in 2016. The SEC found Holmes and then-company President Ramesh “Sunny” Balwani had fabricated claims Theranos technology had been validated by the Food and Drug Administration (FDA) and pharmaceutical companies and battle-tested by the US military in Afghanistan.

As a result, the SEC also barred Holmes from serving as an officer or director of any public company for 10 years. In October 2016, Theranos announced it would be closing its laboratory operations and focusing on its effort to create miniature medical testing machines, which it did. Nevertheless, the fallout continues.

As pressures on medical laboratories and pathology groups to cut costs while delivering quality care and value increases, laboratory leaders must not lose sight of the fact that accuracy of results remains the key to maintaining trust with healthcare consumers and a financially viable business.

—Andrea Downing Peck

Related Information:

Theranos, CEO Holmes, and Former President Balwani Charged with Massive Fraud

Theranos Receives Notice of Sanctions from the Centers for Medicare & Medicaid Services

Two More Investors Sue Theranos and Elizabeth Holmes for Fraud

Theranos Hit with Consumer Lawsuit over Faulty Blood Tests

Theranos, Walgreens Reportedly Reach a Deal to Settle Suit for under $30 Million

Theranos Selects Walgreens as a Long-Term Partner Through Which to Offer Its New Clinical Laboratory Service

An Open Letter from Elizabeth Holmes

How Startup Theranos Has Struggled with its Blood-Test Technology

Theranos Reaches $4.65 Million Fraud Settlement with Arizona

As Theranos Drama Unwinds, Former Patients Claim Inaccurate Tests Changed Their Lives

Theranos Statement on CMS 2567 Report

Agony, Alarm and Anger for People Hurt by Theranos’ Botched Blood Tests

Blood, Fraud and Money Led to Theranos CEO’s Fall from Grace

Holmes, Balwani Indicted by Department of Justice

Theranos News Gets Worse for the Former Silicon Valley Hero

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology

Now Theranos Faces Criminal Investigation on Whether the Clinical Laboratory Company Misled Investors, according to Published Reports

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology

Clinical chemists at AACC pointed out that Holmes did not present data as promised. Instead, she did a speech that advertised her company’s latest medical lab analyzer

DATELINE: PHILADELPHIA—By now, the clinical laboratory industry and the world knows that Theranos Founder Elizabeth Holmes took the stage here last Monday at the annual meeting of the American Association of Clinical Chemistry (AACC). The content of her presentation was given wide play by the national press and, in general, Holmes appears to have failed to impress both the medical laboratory scientists in attendance and the journalists representing some of the world’s most prominent news outlets.

Among those in attendance was your Dark Daily editor, and I reported on the key elements of the presentation given by Holmes last week. However, the details contained within Holmes’ speech are only part of this important story. What is of equal or greater interest to medical laboratory professionals and pathologists is how their peers reacted to the invitation to have Holmes speak at the AACC meeting last week (a joint conference with the American Society for Clinical Laboratory Science—ASCLS), along with their reaction to what Holmes decided to present, their assessment of the diagnostic instrument she unveiled, and how they viewed the data she presented about certain assays performed by the Theranos “miniLab” device. (more…)

Journalists Take Home Top National Awards for Their Work Covering Theranos and the Clinical Laboratory Industry

Honors highlight concern among public and press over potential harm to patients of the medical laboratory industry and the need for more transparency in the quality of care delivered by pathologists and lab scientists

John Carreyrou, Investigative Reporter, and Mike Siconolfi, Senior Editor, both with The Wall Street Journal (WSJ), took home the prestigious National Institute for Health Care Management (NIHCM) Foundation Journalism Award on Monday, May 2, for their work covering Theranos, Inc.

This is the third time this year Carreyrou has won the award in the General Circulation Print Journalism category for his work covering Theranos, the embattled clinical laboratory company in Palo Alto, Calif., owned by CEO Elizabeth Holmes.