Blood-testing startup founder ordered to stand trial

LOS ANGELES: Theranos founder Elizabeth Holmes and her former second-in-command at the Silicon Valley blood-testing startup were ordered on Friday to stand trial next year on fraud charges stemming from their claims about the company’s technology, court documents show.

During a hearing in federal court in San Jose, California, U.S. District Judge Edward Davila set jury selection to begin in the trial of Holmes, 35, and former Theranos President Ramesh “Sunny” Balwani, on July 28, 2020, according to minutes of the proceedings.

Davila ordered the trial to begin in August 2020. It was expected to last three months.

Holmes and Balwani, 54, were indicted in June 2018 on 11 counts of conspiracy and wire fraud. They have pleaded not guilty.

Prosecutors say Holmes and Balwani engaged in a pair of schemes to defraud investors, doctors and patients with claims that Theranos had developed a revolutionary new blood testing system.

Holmes and Balwani are accused of using advertising and solicitations to encourage doctors and patients to use the company’s testing laboratory services even though they knew it could not produce accurate and reliable results consistently.

Holmes, a Stanford University dropout who started Theranos at age 19, was celebrated as a rising star of Silicon Valley. In 2015, Forbes magazine anointed her America’s youngest self-made female billionaire.

Balwani joined Theranos in 2009 and ran day-to-day operations until 2016.

Questions were first raised about the accuracy and reliability of her signature blood-testing device in a series of articles in the Wall Street Journal in 2015. This touched off a string of state and federal investigations into the company.

In March of 2018 Holmes settled civil fraud charges brought by the U.S. Securities and Exchange Commission under which she was barred from serving as an officer or director of a public company for 10 years.