Government Adds Additional Charges Against Elizabeth Holmes Ahead of October Trial

Legal

Weeks after a federal judge delayed the start of Elizabeth Holmes’ trial, U.S. prosecutors have added additional charges against the founder and chief executive officer of the now-defunct Theranos.

The government has added additional charges of conspiracy, wire fraud, and forfeiture. According to U.K.-based The Register, the additional charges expand the existing wire fraud counts to include patients who paid the company for its testing, and advertisements that the company initially took out to entice people to use its blood-testing services. The latest charges against Holmes and Theranos rely on the company’s own claims about the promise and abilities of the company’s blood-testing device that had been made in media interviews and investor presentations, The Register reported, citing the indictment.

The addition of the latest charges comes three months after U.S. District Judge Edward Davila dropped some of the charges against Holmes and Theranos’ former president and her former boyfriend, Ramesh “Sunny” 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 drove home the point in that ruling when he noted the testing conducted by Theranos was paid for by insurance companies, therefore the patients themselves were not deprived of any money or property.

While those charges were dismissed, the judge refused to dismiss the wire fraud charges against Holmes and Balwani, which are more serious charges. Additionally, Davila’s ruling provided the pathway for the latest charges that Theranos fooled patients into relying on the company’s blood-testing technology that they knew was faulty. There were numerous patients who made medical decisions based on faulty testing, particularly following the company’s voiding of two-years-worth of test results due to inaccuracies.

Holmes and Balwani are facing multiple counts of fraud related to the blood-testing promises of 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 federal indictment. Theranos 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, according to the federal complaint.

Holmes is set to go to trial in October. Her trial, which was originally set for July, has been postponed due to concerns about COVID-19. Because of concerns about social-distancing and the spread of the virus, Davila said it would be impossible to safely hold a trial in July. If the pandemic continues in the fall, Davila could postpone the trial to 2021.

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