Judge delays criminal trial of Theranos founder Elizabeth Holmes

The trial has been pushed back due to the COVID-19 crisis.

April 15, 2020, 7:45 PM

The criminal trial of Theranos founder Elizabeth Holmes has been pushed back.

During a status conference held via telephone on Wednesday, Judge Edward Davila of the United States District Court for the Northern District of California announced that Holmes' trial will be delayed from a July 28 start date to October 27, due to the COVID-19 crisis.

Davila also called for an interim status conference to be scheduled in July to assess whether the new October date is feasible or if it would be necessary to move the trial into 2021.

A joint memorandum filed on Tuesday stated that the government and the defense convened via teleconference last week to discuss a new trial date, almost coming to an agreement for the fall until the government revealed they would be seeking a superseding indictment that would significantly expand the case against Holmes.

“...following the Court’s ruling on the defendants’ motions to dismiss the indictment, the government intends to seek a superseding indictment,” the government stated in the filing, referring to the court’s decision to narrow some of the charges against Holmes back in February.

Holmes is currently charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud, facing up to 20 years in prison, and a fine of $250,000, plus restitution, for each count.

The proposed superseding indictment would increase the length of the conspiracy period in Count One, which currently includes the time period from 2013 through 2015, by adding the years 2010, 2011, 2012. Additionally, it would increase the number of allegedly defrauded investors to include those who invested in Theranos from 2010 to 2013, business partners with whom the company interacted between 2010 and 2016, and individuals who served on the Theranos board of directors from 2010-2016.

PHOTO: Former Theranos founder and CEO Elizabeth Holmes arrives at the Robert F. Peckham U.S. Federal Court, June 28, 2019, in San Jose, Calif.
Former Theranos founder and CEO Elizabeth Holmes arrives at the Robert F. Peckham U.S. Federal Court, June 28, 2019, in San Jose, Calif.
Justin Sullivan/Getty Images, FILE

The government is also seeking to include two new counts of wire fraud relating to patients who paid for Theranos tests, which would bring the number of counts against Holmes to thirteen.

Just a decade ago, Theranos -- with a $9 billion valuation -- was revered as a symbol of the best of Silicon Valley and seemed poised to disrupt the laboratory blood testing business with groundbreaking technology the company claimed could perform any blood test with just a few drops of blood. It also attracted investors such as the media mogul Rupert Murdoch.

The company's fortunes began to unravel after reporting from The Wall Street Journal suggested its devices did not deliver on their promises. The company and Holmes settled fraud charges with the Securities and Exchange Commission in 2018.

The grand jury assigned to the case is suspended until May 1 due to COVID-19 and will need to approve the government’s proposed indictment. If approved by the grand jury, Holmes’ team said in Tuesday’s filing they would not be prepared to proceed with the fall trial schedule date and proposed a February 2021 time frame to which the government did not agree.

“Counsel for Ms. Holmes does 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. Nor does counsel understand why the government disclosed its intention to bring these new charges so late in our collective discussions about a trial schedule,” Holmes’ legal team said in the filing.

The government maintains that the case will not materially change with the proposed superseding indictment.