Criminal Trial of Theranos Founder May Be Delayed by Pandemic

(CN) — The high-profile trial of disgraced Theranos founder Elizabeth Holmes set for July may be delayed due to the ongoing coronavirus pandemic. 

“I am mindful of the difficulties in assembling a jury pool in July given the terrible scourge we are facing,” said U.S. District Court Judge Edward Davila. 

Davila has long made his preference known — he wants jury selection to start on July 28. 

The defense attorneys for Elizbeth Holmes have consistently advocated for a delay to the start date, saying the depth and breadth of discovery at issue necessitates more time.

On Tuesday during a telephonic conference, Holmes’ attorney Lance Wade pushed again for a delay. He argued serving subpoenas in person, as required by law, is literally impossible due to the shelter-in-place measures being enacted by state and local governments across the nation. 

“Along with the service of subpoenas and meeting with witnesses in person, there are certain core functions that cannot be performed remotely,” Wade said during the hearing. 

While Davila said he understood the challenges faced by both sides during unprecedented times, he took issue with a proposed order by the defense team that sought to have Davila declare all functions related to the case as “essential” so that attorneys could circumvent social distancing measures handed down by state and local officials. 

“I was taken aback candidly about the way the order was phrased,” Davila said, who made it clear he was not going to craft an order that would allow attorneys to contravene public health provisions.

Davila also said attorneys should be able to conduct meetings with witnesses and other key personages with videoconferencing technology. 

“It’s better to have face-to-face interviews with investigators and witnesses, I get that,” Davila said. “But a lot of this can be done electronically.”

Davila noted that Williams and Conley LLP, the firm conducting Holmes’ defense, has talked repeatedly about how it is able to meet the needs of its clients and fellow attorneys by accommodating remote work.

“My sense is that the work continues and can continue,” Davila said. 

Nevertheless, the judge did acknowledge the July 28 start date for the trial could be in jeopardy. 

“I am not going to disturb the trial date during this hearing, but given the circumstances we all face I would ask the parties to meet and confer with each other, look at the trial schedules and see what can be done,” Davila said. 

Attorneys for the prosecution agreed to meet and confer about the date and another hearing is slated for mid-July. In the meantime, Davila wants both parties to proceed as though the July 28 start date remains firm. 

Holmes is on trial with her former right-hand man, Sunny Balwani, both accused of engaging in multiple acts of fraud by misleading investors and customers regarding the effectiveness of a blood-testing technology that could purportedly give individuals lab results from a single drop of blood. 

Holmes’ exploits and fall from grace – Forbes recognized her as the world’s youngest self-made billionaire in 2014 – have fascinated the general public and provided enough fodder for a book, podcast series and two competing documentaries.

Holmes and Balwani face two charges of conspiracy to commit wire fraud and nine separate counts of wire fraud that could carry a maximum of 20 years in prison and $2.7 million in fines. 

Holmes founded Theranos in 2003 and soon attracted a who’s who of investors and backers. Washington heavyweights George Schultz, Henry Kissinger and Jim Mattis served on the company’s board. 

The health technology entrepreneur’s empire began to unravel in 2016 after John Carreyrou of the Wall Street Journal wrote the first of several articles to question the validity of Theranos’ blood-testing technology. 

Holmes, Balwani and others associated with the company proclaimed their blood tests could give reliable results to customers based on a prick of a finger. In fact, the test could only produce results related to a narrow range of health metrics and suffered from reliability issues. 

When Carreyrou wrote his first article in October 2015, Holmes was worth an estimated $4.5 billion. By June 2016, she was virtually bankrupt.

The company has since been liquidated. 

Prosecutors say Holmes and Balwani, who were previously in a romantic relationship, spent years lying about the capability of their blood testing technology, defrauding investors, board members and corporate partners like Safeway, Walgreens and the Cleveland Clinic.

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