SAN JOSE, California. A key whistleblower against Theranos, the blood test start-up that collapsed under scandal in 2018, testified Tuesday in the trial against the fraud of the company’s founder, Elizabeth Holmes.
The complainant, Erika Cheung, worked as a laboratory assistant at Theranos for six months in 2013 and 2014 before reporting laboratory testing issues in the company to federal agents at the Medicare and Medicaid Service Centers in 2015. His first day of testimony revealed to a jury what those who followed the Theranos saga probably already knew: the company’s famous blood testing technology didn’t work.
In a crowded courtroom, Ms. Cheung said she had turned down other job offers outside of college to join Theranos because she was dazzled by Ms. Holmes’ charisma and inspired by her success as a woman in technology. . Holmes said Theranos machines, called Edison, would be able to discern quickly and economically if people had various health ailments with just a few drops of blood.
“She was very articulate and had a strong sense of conviction about her mission,” Ms. Cheung said of Ms. Holmes.
But Ms. Cheung’s excitement faded after she witnessed actions she disagreed with at Theranos’ lab, she said. In some cases, the blood test results were suppressed to ensure that Theranos technology passed quality control tests. Ms. Cheung was also alarmed when she donated her own blood to Theranos and tests on the company’s machines said she was deficient in vitamin D, but traditional tests did not, she said.
Ms. Cheung, who saw a menu of about 90 blood tests offered by Theranos, said that despite Ms. Holmes’ promises about Edison machines, they could only process a handful of the tests listed. The rest had to be done using traditional blood analyzers or sent to a diagnostic company, he said.
Ultimately, Ms. Cheung relinquished her suspicions about Theranos’ testing services.
“I felt uncomfortable processing patient samples,” he said. “I didn’t think the technology we were using was adequate enough to engage in this behavior.”
During the testimony of Mrs. Cheung, Ms.’s attorneys. Holmes objected to a wide variety of emails and other internal communications filed by the prosecution as evidence. The two sides discussed the rules of the arguments that could be used and the relevance of Ms. Cheung’s testimony.
“The CEO is not responsible for all communications that occur within a company,” said Lance Wade, a lawyer representing Ms. Holmes.
John Bostic, a U.S. prosecutor and deputy attorney, argued that documents showing Theranos ‘internal problems were relevant to the case, regardless of whether Mrs. Holmes’ name was on it.
Mr. Wade replied that Ms. Cheung had been an incoming employee and had virtually no interaction with Ms. Holmes.
“As far as we know, the interview you just heard was the longest conversation you’ve ever had with our client,” he said.
Through it all, Mrs. Holmes sat quietly in a gray blazer and black dress, watching the performances from behind a medical mask.
Ms. Cheung’s 2015 letter to the Centers for Medicare & Medicaid Services explaining the problems with Theranos testing triggered a surprise inspection by the agency that led the company to close its labs. Tyler Schultz, another young employee of Theranos ’lab, also shared details about lab issues with The Wall Street Journal, which published exhibits of the company. Mr. Schultz also appears as a potential witness to the trial.
Since her role in the demise of Theranos, Ms. Cheung has become an advocate of ethics in technology. He has given a TED talk on Truth in Power and helped found Ethics in Entrepreneurship, a non-profit organization that offers ethics training and workshops to start-up founders, workers and investors.