Theranos founder Elizabeth Holmes seeks to overturn fraud conviction

SAN FRANCISCO - Lawyers for Theranos founder Elizabeth Holmes and company president Ramesh “Sunny” Balwani on June 11 urged a federal appeals court to overturn convictions for defrauding investors in the failed blood testing start-up, which was once valued at US$9 billion (S$12.1 billion).

Homes’ lawyer, Ms Amy Saharia, told a three-judge panel of the 9th US Circuit Court of Appeals in San Francisco that Holmes believed she was telling the truth when she told investors that Theranos’ miniature blood testing device could accurately run a broad array of medical diagnostic tests on a small amount of blood.

Holmes, who started Theranos in 2003 as a college student and became its public face, was indicted alongside Balwani, her former romantic partner, in 2018. The two were tried separately in 2022. Later that year, Holmes was sentenced to 11 years and three months in jail and Balwani to 12 years and 11 months.

Both of them are currently serving their sentences.

Ms Saharia said the trial judge improperly allowed former Theranos employee Kingshuk Das to testify as a scientific expert about Theranos’ product without making him face cross-examination about his qualifications.

She also said the judge should have allowed Holmes to introduce more evidence attacking another key prosecution witness, Theranos’ former laboratory director Adam Rosendorff. The evidence includes details of a government investigation of his work after leaving Theranos that she said called his competence into question.

Those mistakes could have made the difference in the “close” case, in which jurors were not able to reach a verdict on most counts against Holmes after seven days of deliberation.

Assistant US attorney Kelly Volkar, arguing for the government, disputed that Mr Das had improperly testified as an expert, saying he was called to talk about his personal experience at Theranos. She also said that “it was not really contested that the device did not work”.

The judges had sceptical questions for both sides and did not clearly indicate how they would rule. Circuit judge Ryan Nelson said that, even without the disputed testimony, “there was, it seemed to me, pretty overwhelming evidence”.

Circuit judges Jacqueline Nguyen and Mary Schroeder said that much of Mr Das’ testimony concerned what he observed at the company, not his scientific opinions, as Ms Saharia argued.

Ms Nguyen and Mr Nelson, however, also told Ms Volkar that they had concerns about what opinions Mr Das was allowed to give during the trial.

Mr Jeffrey Coopersmith, Balwani’s lawyer, argued that prosecutors had gone beyond what was in the indictment against his client by introducing evidence that the commercial testing technology Theranos secretly used was not reliable.

The judges appeared to be more sceptical of that argument, but again did not clearly signal how they would rule. REUTERS