Government case against Elizabeth Holmes, the founder of Theranos, provided several key pieces of evidence showing that she deliberately defrauded doctors, patients and investors when launching a blood test project.
In 2010, Theranos compiled a 55-page report that featured prominently the logos of the pharmaceutical companies Pfizer, Schering-Plow and GlaxoSmithKline. Investors such as Lisa Peterson, who manages the wealthy DeVos family’s investments, and Walter Mosley, who has the Walton family among clients, testified that the report helped convince them to invest in Theranos.
This problem? Pfizer, Schering-Plow and GlaxoSmithKline did not prepare or sign the report. Although prosecutors did not establish that Ms Holmes created the report, witnesses such as Daniel Edlin, a former senior product manager for Theranos, testified that she signed all investor submissions.
Theranos has been in discussions with the Department of Defense for years about deploying its technology to the battlefield, but the partnership never materialized.
However, Ms Holmes informed potential investors in a letter that Theranos had signed contracts with the US military – statements that helped convince them to invest, as investors claimed.
“We really relied on the fact that they worked for pharmaceutical companies and government for years,” Ms. Peterson said.
The correspondence between Theranos staff formed the bulk of the prosecution’s evidence. Some of the emails revealed when Theranos covered up device failures, removed abnormal results from test reports, and fake displays of its blood tests.
On one occasion, Mr. Edlin asked a colleague for advice on how to demonstrate Theranos technology to potential investors.
Michael Craig, Software Engineer for Theranos, recommended that Mr. Edlin use a demo app, a special setting on Theranos devices that says “works” or “handles” if an error occurs, rather than displaying an error.
“The app will hide errors from the client,” Craig wrote in an email.
“It’s never bad,” Mr. Edlin replied. “Let’s go with the demo, thanks.”