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Elizabeth Holmes trial: Former Theranos employee describes being starstruck by Holmes, quickly growing concerned over startup’s capabilities


Cheung, a lab employee, joined Theranos in 2013 out of undergrad and described being enthusiastic about working for the blood-testing startup regardless of it being secretive about its expertise and capabilities throughout the interview course of. She mentioned she was “starstruck” by Holmes, who had been upheld within the media as a uncommon feminine founding father of a billion-dollar startup.

But the attract of the corporate quickly gave approach to pink flags concerning the firm’s testing practices. Those issues included questions concerning the accuracy of some checks, equivalent to ones carried out on Cheung’s blood samples that decided a Vitamin D deficiency she mentioned she did not have. She mentioned the corporate at the moment was solely able to processing just a few of the checks it supplied utilizing its expertise, and as a substitute used a mixture of third-party machines and contractors.

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Cheung left the corporate after roughly six months, testifying that she was “uncomfortable processing patient samples” and that she did not really feel the corporate’s expertise was “adequate” to carry out the duty.

Cheung was the second former employee to take the stand Tuesday within the long-awaited trial of Holmes, who faces a dozen counts of federal fraud and conspiracy prices over allegations she knowingly misled traders, sufferers, and docs concerning the capabilities of her firm’s proprietary blood testing expertise. Holmes, who has pleaded not responsible, faces as much as 20 years in jail.

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The trial is slated to happen over the course of a number of months in a San Jose federal courtroom on Tuesdays, Wednesdays and Fridays. The case was postponed final Friday — the anticipated second day of trial — earlier than it even bought by means of the primary witness testimony. One juror, who’s vaccinated and reported no signs, knowledgeable the courtroom about doable publicity to somebody who examined constructive for Covid-19, main Judge Edward Davila to name for the delay “out of an abundance of caution.” The juror obtained two unfavorable checks and was in attendance Tuesday; one other juror was excused for monetary hardship after being unable to modify her schedule at work to accommodate jury obligation.

The jury tasked with deciding the destiny of Holmes, who based Theranos in 2003 at age 19, now consists of eight males and 4 girls. There are 4 remaining alternates.

Cheung’s testimony is slated to proceed Wednesday. She has been vocal about her expertise as a whistleblower, together with giving a TED Talk through which she describes the expertise of tipping off regulators. “I was scared, I was terrified, I was anxious .. luckily it triggered an investigation that shone to light that there were huge deficiencies in the lab and it stopped Theranos from processing patient samples,” she mentioned in a TED Talk.

According to a courtroom doc filed final week, Theranos spent greater than $150,000 on a non-public investigator to spy on Cheung and one other whistleblower.

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Her testimony adopted that of the federal government’s first witness, So Han Spivey (who additionally goes by Danise Yam). Spivey labored as company comptroller for Theranos from 2006 to 2017 and reported on to Holmes for a big portion of that point.

According to Spivey’s testimony, the corporate’s monetary scenario was so dire in 2009 that it needed to decide and select which distributors to pay.

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Elizabeth Holmes' trial is set to begin: Here's what you need to know

There had been years after that in which Theranos reported no income and, at one level in 2013, the corporate was burning $2 million per week. By 2015, the corporate had amassed a whole bunch of thousands and thousands of {dollars} in losses. Meanwhile, Holmes’ wage jumped from $200,000 to $400,000 throughout that point, Spivey testified.

In a cross examination, Holmes’ legal professional, Lance Wade, requested whether or not Spivey was conscious of different firms struggling on the time of the monetary disaster round 2009; Spivey mentioned she did not know however affirmed Theranos was. Wade additionally urged the corporate was spending closely on analysis and growth and questioned Spivey on whether or not the corporate was capable of make payroll, which it was, she mentioned.

Ahead of Yam’s testimony, Holmes’s attorneys tried to dam Yam from addressing sure spending by Holmes on the corporate’s dime, together with a $2,000 jewellery buy and personal jet flights. When questioned concerning the function of the non-public jets and who had entry to the flights, Spivey could not recall.



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