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SAN JOSE, California — Erika Cheung, key informant Elizabeth Holmes’ fraud caseFailed blood test startup Theranos founder, completed his expression On Friday, after he said the company prioritized speed over accuracy in blood tests, answering questions from the defense for hours.
After three days of deposition, Ms. Cheung, a former Theranos employee, described how some of the processes the company used to conduct blood tests were problematic. While the defense tries to show that Theranos’ procedures are rigorous and complex, Ms. Cheung said Friday her priority is to run tests as quickly as possible, and her machines often fail quality control checks.
Ms. Cheung said Theranos’ blood tests may be cheaper than other tests, but that doesn’t mean you have to “give people false information about their health status.”
Ms. Cheung was a high-profile witness for the federal government, which tried to claim that Ms. Holmes deliberately misled investors, doctors, and patients about how well Theranos’ blood-testing technology was working. Once seen as a Silicon Valley success story with its shining star Ms. Holmes, the company collapsed in 2018. Ms. Holmes, 37, pleaded not guilty and faced 12 counts of electronic fraud and conspiracy to commit electronic fraud.
Cheung, who worked as a lab assistant at Theranos for several months in 2013 and 2014, expressed concern this week about how the company was erasing outliers in its data, before reporting lab test problems to federal agents in 2015. The devices have passed quality control tests. She said her worries started about a month after she started working.
During the cross-examination, Ms. Holmes’ lawyer, Lance Wade, asked Ms. Cheung about the processes, procedures, and organizational chart of Theranos’ laboratories. The apparent point was to show that the problems Ms. Cheung raised about erroneous lab results only applied to a small area of the company.
While Ms. Cheung responded dutifully by remembering Theranos’ procedures and organizational structure, she said that blood testing machines constantly needed recalibration and failed quality checks. He said it could take days to recalibrate the machines.
“There were people sleeping in the car because it was taking too long,” he said.
On Friday, Mr. Wade also asked Ms. Cheung about a 2015 letter she received from David Boies, Theranos’ attorney at the time. In the letter Ms. Cheung had previously mentioned in her testimony, Mr. Boies threatened Theranos with lawsuits for arguing with Wall Street Journal reporter John Carreyrou. exposed the company’s testing issues that year.
Mr. Wade noted that Ms. Cheung received two calls from Theranos’ human resources director before receiving the letter from Mr. Boies, but did not turn them down.
Ms. Cheung later said she didn’t answer calls because she no longer works at Theranos and the “fear” in the human resources director’s voice reminded her how scared she was at the company.
Ms. Cheung said, “I had the right not to talk to them.”
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