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The Theranos Trial: Elizabeth Holmes’s Defense Works to Undermine Central Prosecution Witness

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SAN JOSE, Calif.—A lawyer for Theranos Inc. founder

Elizabeth Holmes

tried to undercut a key prosecution witness’s testimony Tuesday, as new clues emerged about her protection technique of shifting blame to her former high deputy and ex-boyfriend.

Former Theranos lab director Adam Rosendorff testified Tuesday in Ms. Holmes’s criminal-fraud trial that each time the corporate fielded a doctor criticism, each time high quality management failed and each time check outcomes fell out of acceptable ranges, “it raised severe and grave considerations for me in regards to the accuracy of the testing course of.” The considerations finally led him to stop, he mentioned.

Lance Wade,

an lawyer for Ms. Holmes, took an aggressive stance throughout his cross-examination, pushing Dr. Rosendorff to say that he was coached by prosecutors on the solutions he gave.

His voice rising, Mr. Wade requested whether or not throughout a number of preparation periods with prosecutors and federal brokers, Dr. Rosendorff went by means of the questions they meant to ask and the solutions he deliberate to present.

“I used to be at all times instructed to be truthful and inform the reality,” Dr. Rosendorff responded.

Requested a second time, he responded, “I used to be merely instructed to inform the reality.”

Mr. Wade’s stance with Dr. Rosendorff differed considerably from his conciliatory tone throughout cross-examination of prosecution witnesses in earlier weeks of Ms. Holmes’s trial. The 37-year-old Stanford College dropout is accused of 10 counts of wire fraud and two counts of conspiracy to commit wire fraud for representations she made to buyers and sufferers about Theranos’s finger-prick blood-testing know-how.

To date, Ms. Holmes’s protection in opposition to allegations that she overstated Theranos’s capabilities has been restricted to cross-examination and Mr. Wade’s opening remarks to jurors. Court docket filings partially unsealed Monday night time supplied hints about what her protection would possibly appear to be when it’s her flip to name witnesses to the stand—and doubtlessly take the stand herself.

Because the long-awaited trial of Theranos founder and former CEO Elizabeth Holmes will get underway, WSJ seems to be again on the scandal’s largest milestones and speaks with authorized reporter Sara Randazzo about what we will anticipate to see within the fraud trial. Photograph Illustration: Adele Morgan/WSJ

The filings, unsealed in response to a movement by The Wall Avenue Journal’s writer, Dow Jones & Co., present how she would possibly place herself in opposition to Ramesh “Sunny” Balwani, her former boyfriend and No. 2 on the firm, who’s accused of the identical crimes. Each have pleaded not responsible.

Ms. Holmes’s attorneys have mentioned in filings that she might argue that she and Mr. Balwani had an emotionally and bodily abusive relationship that left her beneath his management in the course of the interval wherein the federal government alleges the 2 blood-testing executives dedicated a large fraud. Mr. Balwani’s lawyer has mentioned that Mr. Balwani “unequivocally denies that he engaged in any abuse at any time.”

Ms. Holmes’s attorneys defined in a newly unsealed submitting that “she deferred to and relied on what she perceived to be Mr. Balwani’s enterprise acumen. She relied on Mr. Balwani to offer her with correct details about the state of the corporate’s operations.”

With out conceding that any assertion she made was really false, her attorneys mentioned that she will nonetheless argue that, “If Ms. Holmes in good religion believed that what she was saying was true as a result of she relied on and deferred to Mr. Balwani, she didn’t commit wire fraud.”

Ms. Holmes met Mr. Balwani throughout a language-immersion journey to China when she was 18-years-old and he was 37, Ms. Holmes’s lawyer instructed jurors earlier within the trial. In his early years with the corporate, the manager used his private wealth, gained from his work at an earlier tech startup, to assist prop up Theranos.

Weeks of prosecution witnesses stay earlier than Ms. Holmes’s attorneys can current their protection in full.

Dr. Rosendorff is the eighth witness to take the stand up to now.

The previous lab director testified that his considerations culminated in late 2014, when he determined to stop, days after Mr. Balwani mentioned firing him in an e mail to Ms. Holmes that was proven to jurors Tuesday.

Within the weeks main as much as his resignation, Dr. Rosendorff exchanged a collection of heated emails with Mr. Balwani and others, together with Ms. Holmes’s brother, Christian Holmes, a senior Theranos supervisor who fielded buyer complaints.

When instructed by Mr. Holmes how to reply to a health care provider who complained about ldl cholesterol outcomes, Dr. Rosendorff responded that he wouldn’t do it. “For those who’re asking me to defend these values then the reply isn’t any,” he mentioned in a Nov. 14, 2014, e mail.

On Dr. Rosendorff’s final day of labor, he testified, he met with Mr. Balwani and when the Theranos government supplied his hand Dr. Rosendorff declined to shake it.

Dr. Rosendorff testified that after he left Theranos, he spoke to 2 attorneys and to then-Wall Avenue Journal reporter

John Carreyrou

about his expertise on the firm. “I felt obligated from a ethical and moral perspective to alert the general public,” he mentioned.

The Wall Avenue Journal first reported on questions on Theranos’s know-how in 2015, together with that the corporate ran few assessments on its proprietary finger-stick machines and as an alternative used industrial blood analyzers that it typically modified.

Dr. Rosendorff mentioned he spoke off the file to Mr. Carreyrou, and his title by no means appeared as a supply within the Journal’s reporting. Mr. Carreyrou mentioned Tuesday that Dr. Rosendorff “was my first and most necessary supply” and that with out him, “I wouldn’t have been in a position to break the Theranos story.” A Journal spokesman declined to remark.

Throughout cross-examination, Mr. Wade questioned Dr. Rosendorff about his authorized obligations as lab director and whether or not he ever supplied lab assessments for affected person use that weren’t correct.

Dr. Rosendorff responded that no, every time he was alerted {that a} check was inaccurate or unreliable, he ordered the lab to stop doing these assessments.

Theranos and the Elizabeth Holmes Trial

Write to Sara Randazzo at sara.randazzo@wsj.com

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