Erika Cheung, who took the stand yesterday for her direct testimony, which continued at this time, is understood for being certainly one of John Carreyrou’s sources for his blockbuster article about Theranos. You already know, the article that’s a part of the explanation we are actually witnessing US v. Elizabeth Holmes. (Holmes is on trial for a number of counts of wire fraud and conspiracy to commit wire fraud.)
Cheung is, famously, one of many individuals who blew the whistle on Holmes. She’s even given a TED talk about it. The opposite main supply for Carreyrou was her pal, Tyler Shultz, who additionally labored at Theranos and was the grandson of one of many board members. He’s anticipated to testify later within the trial, since he tried to deliver issues within the lab to Holmes’ consideration.
At Theranos there have been two labs, Cheung testified: the analysis and growth lab and the medical lab. She labored in each, beginning with the R&D lab. Her place in each labs was largely the identical — an entry-level job that concerned operating high quality management assessments to verify the machines had been working correctly. A couple of quarter of the Theranos machines failed the check at any given time, Cheung mentioned. By comparability, the commercially accessible machines failed a lot much less continuously.
Theranos was Cheung’s first job out of school, and she or he labored there solely about six months. Throughout that point, she testified, she noticed issues with the Theranos blood assessments that gave her severe pause about their use on sufferers. In a single e mail we noticed at this time, Cheung wrote that she was glad to do high quality management on a hepatitis C pattern to substantiate the check labored, however “I don’t feel comfortable running the patient sample,” she wrote. She didn’t wish to give outcomes to a affected person from one thing that failed so usually.
Cheung was “stressed and uncomfortable with what was going on,” she mentioned on the stand. “Behind closed doors, we have all these problems and they [patients] think they have accurate results” they’ll use for medical selections.
Cheung’s testimony established what the coverage was for operating VIP samples on the Theranos labs, that some outcomes had been thrown out in order that machines may cross high quality management, and that Cheung raised her issues fairly excessive up the meals chain — although by no means on to Holmes. As a substitute, Cheung talked to each Sunny Balwani, Holmes’ co-defendant who’s being tried individually, and George Shultz, a member of Theranos’ board of administrators.
Balwani informed her she was unqualified to critique Theranos, and that she ought to unquestioningly run the assessments or stop. So she stop.
She finally went to Carreyrou and the Facilities for Medicare and Medicaid Providers, that are the regulators that oversee these labs. In consequence, she was served with threatening authorized papers by Theranos’ legislation agency.
The failures within the lab aren’t actually in query — the protection acknowledged them in opening statements. These failures, argued Lance Wade, Holmes’ lawyer, simply weren’t Holmes’ fault. And so, in his cross, he made a degree of building in tedious element all of the specialists that Cheung labored with, and the existence of their PhDs and medical levels.
And as a substitute of making an attempt to name Cheung’s credibility into query, Wade used Cheung to introduce the individuals in her chain of command — emphasizing her distance from Holmes. He additionally used her to introduce paperwork about lab laws from CMS. There was a 120-page lengthy doc that set out requirements from the lab assistants like Cheung to the very high of the lab. Per these laws, a lab assistant — the lowest-level worker — will need to have a bachelor’s diploma in science. Meaning Holmes wasn’t certified even to do this work.
You possibly can have a look at that two methods. One is that Holmes, unqualified founder, couldn’t have identified how dangerous issues had been within the lab as a result of she didn’t have a level. The opposite is that it’s a giant purple flag that the one who supposedly invented this revolutionary expertise couldn’t work in her personal lab.
Wade additionally went by way of documentation that confirmed that throwing out “outlier” samples was talked about — bolstering his opening argument that nothing Theranos was doing was secret.
We noticed pages of documentation with signatures affirming the procedures. Cheung was requested to learn the signatures aloud. None of them belonged to Holmes.
It’s nonetheless potential Wade will rip Cheung aside on Friday — I’ve seen some gnarly cross-examinations — however this method to this point is like water. He’s agreeing with a few of the damning issues Cheung has to say, however laying the blame elsewhere. For the protection, it’s possibly the neatest transfer on the board.