Elizabeth Holmes' Fraud Case Delayed Until October Due to COVID-19 Concerns

Elizabeth Holmes, the founder and former chief executive officer of Theranos, will have to wait a few months longer before she gets her day in court. Her fraud case has been delayed from July until October due to concerns regarding COVID-19.

On Wednesday, U.S. District Judge Edward Davila set a new date of Oct. 27 to hear the criminal fraud case against Holmes and Theranos’ former president and her former boyfriend, Ramesh “Sunny” Balwani. The two have been charged with multiple counts of fraud. With concerns about the devastating impacts of COVID-19, the disease caused by the novel coronavirus pandemic that has swept the globe, Davila said it would be impossible to safely hold a trial in July.

“We’re in unchartered waters and unchartered territories,” Davila said in his Wednesday announcement, according to CNBC. “We need to make sure the environment is safe for all parties, including the jury that’s called to hear the matter.”

If the pandemic continues to rage across California in the fall, Davila said he would consider delaying the trial until 2021.

Davila made his decision following a request by Holmes’ legal team. As CNBC reported, her defense team said Holmes, as well as lawyers, jurors and witnesses, would have to enter the courthouse through onlookers, as has been typical in the past. The team said if anyone in the trial contracted the virus “the risk of a mistrial would be substantial,” CNBC reported.

The pandemic has proven to be a problem for Holmes’ team. Earlier this month Judge Davila denied their request for a special exemption to the California stay-at-home order that would have deemed them “essential” employees. The attorneys said the order prohibited them from interacting and interviewing witnesses for Holmes’ defense, as well as serving subpoenas. Those activities, attorney Lance Wade said, “need to, under existing law, be performed in-person and some need to be performed now to keep the current schedule.

The delay in the trial date will also benefit the prosecution. CNBC noted that the state wants to bring additional charges against Holmes. According to the report, the prosecution is seeking to add to additional wire fraud charges “relating to a patient and doctor who were allegedly defrauded by her company Theranos and broaden the timeframe of her alleged crimes by three years.” Additionally, the prosecution is looking to include Walgreens and Safeway in the trial. Both of those companies had business relationships with Theranos and the prosecution is hoping to bring them in as victims of fraud, CNBC said.

In February Davila dropped some of the fraud charges against Holmes and Balwani. Davila ruled that federal prosecutors cannot pursue charges that claim Holmes Balwani defrauded doctors and customers who did not pay for blood tests. The judge ruled that the testing conducted by Theranos was paid for by insurance companies, therefore the patients themselves were not deprived of any money or property.

Holmes and Balwani are facing multiple counts of fraud related to the blood-testing company Theranos. From 2013 to 2015 Holmes and Balwani raised more than $700 million from investors through what the U.S. Securities and Exchange Commission called “years-long fraud” in which they exaggerated or lied about the efficacy of the company’s proprietary technology and the state of its finances, according to the complaint. The company also made false claims about its relationship with the Department of Defense and its regulatory status with the U.S. Food and Drug Administration during that time period, the complaint, announced in 2018, said.