Holmes, Prosecutors Trade Blame for Crippled Theranos Database

(Bloomberg) — Elizabeth Holmes is trying to turn the tables on federal prosecutors by arguing they have themselves to blame for the destruction of a critical Theranos Inc. database that would have provided evidence at her upcoming criminal trial.

Lawyers for the founder of the dissolved startup argued in a series of court filings Tuesday that in the absence of the patient information repository, jurors shouldn’t instead be permitted hear from customers and medical professionals testifying about the company’s erroneous test results.

To convict Holmes of fraud, prosecutors must prove she falsely told investors Theranos machines could produce accurate blood test results when she knew otherwise. Without scientific proof of the unreliability of Theranos technology, her lawyers argue, the government is trying to plug a hole in its case by relying on cherry-picked “anecdotal” evidence.

“The reason the government lacks this evidence is because the prosecutors sat on their hands for years before attempting to acquire it,” and stalled again once they got the database, her lawyers argue. “They are entirely to blame.”

Read More: The Spectacular Rise and Fall of Elizabeth Holmes and Theranos

Holmes and prosecutors are in the thick of a fight over what evidence jurors will get to see and hear at a trial scheduled for July in San Jose, California, after it was delayed twice due to the pandemic. U.S. District Judge Edward J. Davila’s decisions will shape the evidence as well as the two sides’ strategies about what arguments lawyers will emphasize or be forced to defend.

There’s no dispute between the two sides about the importance of the Laboratory Information System database, or LIS. It was a repository of at least three years of the company’s blood tests containing detailed information about patients and their doctors. A few keyboard clicks could render how many test errors were flagged for specific Theranos tests, according to a filing.

“Searches of the kind the government describes could have addressed the very question the government seeks to put to the jury — whether Theranos’ technology was systematically inaccurate and unreliable,” Holmes argues in the filing.

Prosecutors say the database was destroyed in about August 2018, three months after a federal grand jury asked for a working copy of its contents. Accuracy problems with Theranos machines was documented by regulatory agencies, the U.S. argues, while promising that whistleblowers will also testify.

The government describes a “double-encrypted” ruse and the dismantling of hardware to thwart its attempt to reconstruct the LIS. Prosecutors put much of the blame on a contractor friend of former Theranos President Ramesh “Sunny” Balwani, who at one time was Holmes’s boyfriend and now faces a separate criminal trial.

Holmes’s lawyers say there’s no evidence she or her defense team had any role in making the data inaccessible.

“The government has insinuated that the loss of the LIS data reflects on Ms. Holmes’ supposed guilt even though she had nothing to do with it,” is how the former CEO’s lawyers describe it.

Her lawyers go so far as to argue that the government’s neglect of the database hinders her ability to defend herself, raising “grave constitutional questions.”

The database might have shown that the test results of customers who prosecutors have lined up to testify at trial were aberrations and statistically insignificant, her lawyers argue.

“The government’s loss of the LIS data has another profound consequence for this case: it has deprived Ms. Holmes of evidence she needs to rebut the government’s misguided allegations,” they said.

The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Francisco).

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