The criminal trial of Elizabeth Holmes, the founder and former CEO of Theranos, began with the first full day of witness testimony on Tuesday. Erika Cheung, who reported the company to regulators in 2015, was one of the two former employees who testified.
Cheung, a lab worker, joined Theranos after graduating from college in 2013 and said she was excited to work for the blood-testing startup despite the company’s secrecy about its technology and capabilities during the interview process. She described Holmes as “starstruck,” referring to her as a “rare female founder of a billion-dollar startup” who had been celebrated in the media.
However, the company’s allure was quickly replaced by concerns about the company’s testing practices. Some tests, such as those performed on Cheung’s blood samples and determining a Vitamin D deficiency she claimed she didn’t have, raised questions about their accuracy. She claimed that at the time, the company’s technology could only process a few of the tests it offered, so it relied on a mix of third-party machines and contractors.
Cheung left the company after about six months, claiming that she was “uncomfortable processing patient samples” and that the company’s technology was “inadequate” for the job.
Cheung was the second former employee to testify in Holmes’ long-awaited federal fraud and conspiracy trial on Tuesday. Holmes is accused of knowingly misleading investors, patients, and doctors about the capabilities of her company’s proprietary blood testing technology. Holmes, who has pleaded not guilty, could face a sentence of up to 20 years in prison if convicted.
The trial will take place in a federal courtroom in San Jose on Tuesdays, Wednesdays, and Fridays over the course of several months. The case was postponed last Friday, the anticipated second day of the trial, before the first witness testimony could be heard.
Judge Edward Davila ordered the delay “out of an abundance of caution” after one juror, who is vaccinated and has reported no symptoms, informed the court about possible exposure to someone who tested positive for Covid-19. The juror received two negative tests and was present on Tuesday; another juror was excused due to financial hardship after she was unable to rearrange her work schedule to accommodate jury duty.
The jury deciding Holmes’ fate now consists of eight men and four women. Holmes founded Theranos in 2003 when he was 19 years old. There are four alternates left.
Cheung’s trial is set to resume on Wednesday. She has been outspoken about her experience as a whistleblower, including giving a TED Talk about the experience of alerting regulators. “I was scared, I was terrified, I was anxious .. luckily it triggered an investigation that shone to light that there were huge deficiencies in the lab and it stopped Theranos from processing patient samples,” she said in a TED Talk.
Theranos spent more than $150,000 on a private investigator to spy on Cheung and another whistleblower, according to a court document filed last week.
