SAN JOSE, Calif. — Theranos founder Elizabeth Holmes, accused of cheating doctors, patients and investors with false claims about her blood-testing startup, is now charged with 12 counts of fraud, after federal prosecutors added a new charge.
The 12th felony fraud charge was filed Friday in a new criminal indictment against Holmes that was just released in court records. The charge concerns a patient’s blood-test results, according to the indictment filed in U.S. District Court in San Jose, which did not provide specific details.
Holmes, a Stanford University dropout, launched Theranos in 2003, and when the startup came out of “stealth mode” in 2013, began claiming the Palo Alto company’s machines could conduct a wide range of tests using a few drops of blood from a finger-prick.
In reality, the federal government alleges, Holmes and her co-accused, former company president Sunny Balwani, knew there were accuracy and reliability problems with their “analyzer” and that it could only conduct a limited number of tests. The two misled investors about Theranos’s financial health, and misrepresented business relationships with Walgreens and the U.S. Department of Defense, prosecutors claim.
Holmes and Balwani also defrauded doctors and “many hundreds” of patients, the government alleges. Holmes and Balwani have denied the allegations, with lawyers for Holmes arguing in a December court filing that the government’s case was “unconstitutionally vague” and lacked specific claims of misrepresentation.
Lawyers for Holmes did not immediately respond to a request for comment on the new charge. After the prosecution in April declared its intention to add two new charges, her legal team said in a court filing that they could not understand “why it took the government nearly two years post-indictment, and more than five years into its investigation, to bring these new charges.”
Prosecutors did not immediately respond to questions about whether they still intended to file a second new charge.
Holmes’s trial, originally set for this summer, was delayed by the coronavirus pandemic until fall, with jury selection scheduled to start Oct. 27. However, Judge Edward Davila has expressed some doubt about whether that start date will stand, and has set a status hearing for July 20 to consider the matter.
©2020 The Mercury News (San Jose, Calif.)