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Wednesday, June 29, 2022

Elizabeth Holmes defeated charges of patient fraud. Will Ramesh “Sunny” Balwani?

by Joel Rosenblatt | bloomberg

Theranos Inc. Elizabeth Holmes, its founder, may have been convicted of defrauding investors, but Erin Tompkins still believes she escaped a crime.

Tompkins is particularly invested in the outcome of the Theranos saga because she was one of thousands whose blood was tested by the company. But even more so because Tompkins was among a handful of clients who testified against Holmes, only to see the startup’s founder acquitted of all charges that he defrauded patients.

Tompkins returned to the witness stand this week and asked Theranos to tell her story of a poor blood test that falsely indicated she was HIV positive.

But this time she was testifying against Holmes’ alleged co-conspirator, former Theranos President Ramesh “Sunny” Balwani, and she is hoping the government will get a better result in the second trial than in the first.

“I feel like I belong to a group of people who were on the receiving end of a crime,” Tompkins said shortly after he finished his testimony outside federal court in San Jose, Calif.

“Despite prosecutors’ dedication and support, patient witnesses have been considered peripheral compared to investors,” Tompkins said. “We were deceived because we trusted them with our blood and how many dollars were there for the test. But we were not robbed of millions of dollars.”

Whether prosecutors can charge the patient with fraud this time is another matter.

Prosecutors made a special point of exposing patient victims when they convicted Holmes and Balwani in 2018, accusing them of soliciting patients even though they knew Theranos machines could not produce reliable results. The Justice Department said at the time that the misrepresentation “endangered health and life.”

Prior to Holmes’ trial, legal experts predicted patient witnesses, ordinary people suffering from a variety of medical conditions, would pack a greater emotional punch than well-to-do fund managers, suggesting that Holmes did not want to increase investments. lied about the prospects of the startup.

On the stands, a woman cried while she explained receiving a test result, leading her to believe she was going on a fourth failed pregnancy.

But prosecutors came up short in the end because they failed to directly link Holmes to the false test results.

Susanna Stefanek, an editor at Apple Inc., who served on the Holmes jury, said, “They didn’t really prove that these patients were allowed to get these blood tests through anything they said or did, or even advertising. was agreed to.” “The relationship between Elizabeth Holmes and the patients was not as strong for us.”

In Balwani’s trial, which began on March 22, prosecutors are recycling many of the same witnesses – including patients and doctors – from the Holmes trial. But like the first trial, testimony relating to patients is getting small game compared to the investor portion of the case.

Prosecutors are better asking sharp questions and more clearly connecting dots if they expect to prevail on patient fraud charges this time, said Michael Weinstein, a former federal prosecutor at Cole Schottz in New Jersey. Became a white-collar defense attorney.

Weinstein said the government needed to show a link between Balvani’s knowledge of what was happening inside Theranos and his alleged misrepresentation that caused the patient’s suffering.

“The government wants to show that there was a discrepancy between what he was learning internally and what he was saying from outside,” he said.

Read more: The spectacular rise and fall of Elizabeth Holmes and Theranos

Overall, the government may have a stronger hand this time as Balwani, while Holmes’ second in command, was more involved in the day-to-day management of the laboratory in Theranos, where testing technology was developed and later deployed with patient blood. was done. samples.

In Balwani’s trial, jurors listened to a laboratory director, a regulator and a patient who did not testify in the Holmes case.

But Balwani, like Holmes, is making a strong defense. They claim that prosecutors have cherry-picked the few instances in which Theranos tests resulted in error, which occurs to some degree in all laboratories.

His attorney, Jeffrey Coopersmith, testified to that effect on Wednesday from Phoenix doctor Mark Burns, who acknowledged that Theranos, Lab Corp.’s blood test competitor, also makes testing errors, though rarely.

Under cross-examination, Burns also testified that he had used the Theranos tests for a year, before facing the single error he had made.

“There were no other problems for those other patients, is that right?” Coopersmith asked. “I couldn’t find any tests that were related,” replied Burns.

Coopersmith and Abraham Simmons, spokesmen for the US Attorney’s Office in San Francisco, both declined to comment.

More news like this is available on Bloomberg.com

©2022 Bloomberg LP

World Nation News Desk
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