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The prosecution came out swinging on Tuesday in the criminal fraud trial of Elizabeth Holmes after a seven-day break due to the court's calendar.
Holmes, the founder and CEO of the now-defunct company Theranos, is fighting 11 counts of criminal wire fraud based on allegedly false and misleading statements to investors, doctors and patients about the company's malfunctioning blood-testing technology.
On cross-examination by prosecutor Robert Leach, Holmes confirmed that the technology was never used on medevacs, never deployed on the battlefield, and never sent to Afghanistan or the Middle East for military use.
She agreed with Leach that telling investors anything to the contrary "would be wrong."
But when asked whether she in fact told a number of investors that the devices were being used "in medevac units around the world," Holmes demurred. "I don't think I did," she testified, contradicting the testimony of earlier witnesses in the case.
Leach then methodically got Holmes to confirm that she was aware that the Theranos "Edison" machines could only run 12 different blood tests, that the vast majority of tests were run on commercially available analyzers that Theranos had modified, and that "it would be incorrect to say" that Theranos did not buy analyzers from third parties.
Shown a January 2014 email from Theranos investor Bryan Grossman asking about the analyzers used in Walgreens stores, Holmes admitted that she "never told" Grossman that the company was using third-party machines and that the materials she provided to him did not do "a good job describing" when Theranos would be able to perform all of its tests on its own devices.
Leach also asked Holmes about statements in the now-infamous Fortune cover article in June 2014 that gushed over the supposedly revolutionary technology and that she immediately sent to Theranos shareholders. Holmes conceded that she never told the article's author, Roger Parloff, that the company was running most of its tests on modified commercial machines.
"I could have handled those communications differently," Holmes said, smiling.
As to the Fortune article's statement that Theranos "currently offers more than 200 and is ramping up to offer more than 1,000 of the most commonly ordered blood diagnostic tests, all without the need for a syringe," Leach asked Holmes to confirm that this was "not true in June 2014." Holmes responded, "I believe that now," possibly implying that her beliefs were different at the time.
The questioning appeared designed to remind the jury of evidence from earlier in the trial, which is now in its 14th week, and to connect the dots of what Holmes knew, when she knew it and when she said what to whom.
Redirect examination by Holmes' defense attorney, Kevin Downey, began in mid-afternoon on Tuesday and will continue through some portion of Wednesday morning. Downey told Judge Edward Davila that the defense will decide on Wednesday whether to call more witnesses or to rest its case, leaving open the possibility that the case could go to the jury this week.
