Cheung, a lab worker, joined Theranos in 2013 after his undergraduate studies and said he was excited to work for the blood testing start-up, although he has kept its technology and methods a secret. capacities during the maintenance process. She said she was “struck” by Holmes, who was touted in the media as one of the few founders of a billion-dollar startup.
But the attractiveness of the business quickly gave way to red flags regarding the company’s testing practices. Those concerns included questions about the accuracy of certain tests, such as those done on Cheung’s blood samples that determined a vitamin D deficiency that she said she did not have. She said the company at the time was only able to handle a few of the tests it offered using its technology and instead used a combination of machines and third-party contractors.
Cheung left the company after about six months, testifying that she was “uncomfortable with processing patient samples” and did not think the company’s technology was “adequate” to accomplish task.
Cheung was the second former employee to take a stand on Tuesday in Holmes’ long-awaited trial, which faces a dozen federal fraud and conspiracy charges over allegations she knowingly misled investors, patients and doctors on the capabilities of his company’s exclusive blood. test the technology. Holmes, who has pleaded not guilty, faces up to 20 years in prison.
The trial is expected to run over several months in a federal courtroom in San Jose on Tuesdays, Wednesdays and Fridays. The case was postponed last Friday – the second scheduled day of the trial – even before it resulted in the first testimony. A juror, who is vaccinated and has not reported any symptoms, informed the court of possible exposure to a person who tested positive for Covid-19, which led Judge Edward Davila to request the postponement “out of excess of caution “. The juror received two negative tests and was present on Tuesday; another juror was excused for financial hardship after being unable to change her work schedule to accommodate jury duty.
The jury tasked with deciding the fate of Holmes, who founded Theranos in 2003 at the age of 19, is now made up of eight men and four women. There are four alternates left.
According to a court document filed last week, Theranos spent more than $ 150,000 on a private investigator to spy on Cheung and another whistleblower.
His testimony followed that of the government’s first witness, So Han Spivey (also known as Danise Yam). Spivey worked as a corporate controller for Theranos from 2006 to 2017 and reported directly to Holmes for much of that time.
According to Spivey’s testimony, the company’s financial situation was so dire in 2009 that it had to choose which suppliers to pay.
There were years after that that Theranos reported no income, and at one point in 2013 the company was burning $ 2 million a week. By 2015, the company had racked up hundreds of millions of dollars in losses. Meanwhile, Holmes’ salary rose from $ 200,000 to $ 400,000 during that time, Spivey said.
In cross-examination, Holmes’ attorney Lance Wade asked if Spivey was aware of other struggling companies around the time of the financial crisis circa 2009; Spivey said she didn’t know but claimed Theranos was. Wade also suggested the company was spending a lot on research and development and asked Spivey if the company was able to do payroll, which it was, she said.
Prior to Yam’s testimony, Holmes ‘attorneys attempted to prevent Yam from paying some of Holmes’ expenses out of company pennies, including a $ 2,000 jewelry purchase and private jet flights. Asked about the purpose of the private jets and who had access to the flights, Spivey couldn’t remember.
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