Elizabeth Holmes Challenges U.S. Charges Over Theranos Blood Tests
Elizabeth Holmes Challenges U.S. Charges Over Theranos Blood Tests
(Bloomberg) -- Theranos Inc. founder Elizabeth Holmes mounted an attack Monday against charges that she defrauded patients who used her company’s blood tests.
The former chief executive of the blood-test startup that imploded after reaching a $9 billion valuation argues that allegations she misled patients should be dismissed as too vague and because the government can’t prove that people who got inaccurate test results were actually harmed.
Prosecutors say they’ve got plenty of proof that Holmes and ex-Theranos President Sunny Balwani duped patients into relying on technology they knew was faulty, and put some of those people in peril by providing false lab results. A trial is scheduled for August in San Jose, California.
U.S. District Judge Edward Davila is weighing a defense request to dismiss the indictment. He asked during a hearing for more details about the “implicit misrepresentations” Theranos allegedly made to consumers and doctors in marketing its ability to run thousands of medical tests using the blood from a finger-prick instead of traditional needles, and do so quickly and cheaply.
Prosecutor John Bostic pointed to Theranos’s claim that its tests had won approval from the U.S. Food and Drug Administration, saying that was meant to assure patients about the “accuracy of the tests.”
Patients relied on Theranos test results concerning pregnancies and HIV to make clinical treatment decisions, Bostic added. In marketing materials and pitches to doctors, he said, “the things told to patients suggested this was about getting them valuable information that they could use for their health care.”
Amy Saharia, a lawyer for Holmes, contended that under criminal law, “there’s no such thing as an implicit representation.”
“We don’t know what this means,” she said.
Holmes is asking Davila to dismiss the entire 11-count case -- which includes charges that Holmes and Balwani defrauded investors who put $700 million in the company -- claiming that the government’s “bare-bones” indictment is “skimpy” and “paltry.”
To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Anthony Lin
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