Cheung, a lab worker, joined Theranos in 2013 without students and described being excited to work for the start-up of blood tests even though it was a secret about his technology and capabilities during the interview process. . She said she was “starred” by Holmes, who had been recognized in the media as the rare woman founder of a $ 1 billion startup.
But the company’s appeal soon gave way to red flags over the company’s testing practices. These concerns included questions about the accuracy of some tests, such as those performed on Cheung’s blood samples that determined a vitamin D deficiency he said he did not have. He said the company at the time was only able to process some of the tests it offered using its technology and instead used a combination of third-party machines and contractors.
Cheung left the company after about six months, testifying that he was “uncomfortable processing patient samples” and that he did not believe the company’s technology was “adequate” to carry out the task.
Cheung was the second former employee to take a stand on Tuesday in the long-awaited trial against Holmes, who faces a dozen charges of federal fraud and conspiracy on charges of knowingly misleading investors, patients and doctors about his abilities. the blood owner of your company. technology testing. Holmes, who has pleaded guilty, faces up to 20 years in prison.
The trial is scheduled to take place over several months in a San Jose federal courtroom on Tuesdays, Wednesdays and Fridays. The case was adjourned last Friday, the second scheduled trial day, even until the first of the witnesses’ testimony was passed. A jury, which is vaccinated and has shown no symptoms, informed the court of possible exposure to someone who tested positive for Covid-19, prompting Judge Edward Davila to request the delay “with great caution.” The jury received two negative tests and attended on Tuesday; another jury was excused for financial hardship after being unable to change his work schedule to suit the jury’s duty.
The jury decided to decide the fate of Holmes, who founded Theranos in 2003 at the age of 19, and now consists of eight men and four women. There are four substitutes 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 (who also goes by 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 later during which Theranos reported no revenue and at one point in 2013, the company was burning $ 2 million a week. By 2015, the company had accumulated hundreds of millions of dollars in losses. Meanwhile, Holmes’ salary went from $ 200,000 to $ 400,000 during that time, Spivey said.
In an interrogation, Holmes’ lawyer, Lance Wade, asked if Spivey was aware of other companies struggling at the time of the financial crisis around 2009; Spivey said he didn’t know, but claimed Theranos did. Wade also suggested the company spend a lot on research and development and asked Spivey about whether the company was able to payroll, which it was, he said.
Faced with Yam’s testimony, Holmes ‘attorneys tried to prevent Yam from dealing with certain of Holmes’ spending on company money, including a $ 2,000 jewelry purchase and private jet flights. When asked about the purpose of the private jets and who had access to the flights, Spivey didn’t remember.