Elizabeth Holmes knew machines weren’t working, former Theranos lab director testifies

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  • Former Theranos Lab director, Adam Rosendorff, took the stand on the fourth day in the trial of beleaguered CEO Elizabeth Holmes.
  • Holmes’ defense attorney, Lance Wade, tried to poke holes in Rosendorff’s previous testimony, asking “No lab right?”
  • Rosendorff testified that he was becoming frustrated at his “inability to explain discrepant results to clinicians”.

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San Jose, Calif. — A former Theranos lab director admitted Friday that he had plenty of opportunities to address his concerns about the company’s technology with former CEO Elizabeth Holmes.

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Adam Rosendorff joined Theranos in 2013 as a laboratory director. He testified that he thought the healthcare start-up would become the next Apple. A year later, Rosendorff left after becoming uneasy and concerned by the high failure rate of the company’s blood-testing technology.

Rosendorff has emerged as the government’s most important witness yet. He said Holmes was aware the lab machines weren’t working as he had advertised, but went ahead with the launch. Under cross-examination on Friday, he told jurors that when he stepped down he was “being frustrated by my inability to explain the inconsistent results”.

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It was the fourth week of the trial for Holmes, who is facing 12 charges of wire fraud and conspiracy. Prosecutors allege that Holmes and Balwani were involved in a decades-long, multimillion-dollar scheme to defraud investors and patients. Holmes and Balwani have pleaded not guilty. Balwani will be tried separately next year.

A defense attorney for Holmes, Lance Wade, has been cross-examining Rosendorff for three days trying to poke holes in the replay of events when he was the laboratory director. Wade cited several emails from physicians who complained of their patients receiving incorrect test results and that Rosendorff was slow to respond.

In an October 2014 email, a doctor wrote to Theranos customer service complaining about his patient who had received the relevant test result. The doctor asked to speak to Rosendorff.

Rosendorff replied that he would call. But Wade reports that a week has passed and Rosendorff forgot to return the doctor’s call.

“Everybody makes mistakes,” Wade said.

“Sure,” answered Rosendorff.

Wade also submitted internal emails between Rosendorff, Holmes, and their top executive, Ramesh “Sunny” Balwani, that showed officials were addressing their concerns.

Balwani wrote a lengthy email in October 2014 addressed to a doctor who was inquiring about his patient’s incorrect test results. “Despite all our best efforts, there will be unforeseen consequences,” Balwani wrote to Rosendorff and Holmes.

“No lab right?” Wade asked.

“Yes,” answered Rosendorff.

“Every lab makes some errors,” Wade said.

Wade also pointed to a May 2014 meeting in which Rosendorff spoke with Holmes about the wide range of hCG results he could get from the tests. “She seemed so calm about the whole thing, she didn’t share my level of alarm,” Rosendorff said.

Wade, however, pointed to an email that Holmes had sent to Balwani about the suspicious hCG test results. “How did this happened?” Holmes asked.

According to testimony earlier in the trial, Rosendorf was a primary source for former Wall Street Journal reporter John Carrerou. Carreyrou broke down the Theranos scandal, revealing major accuracy problems with the company in 2015.

In a court filing Friday, Carrerou’s attorney argued that he should not be excluded from participating in the trial. Carreyrou appears on Holmes’ witness list but is not summoned. Witnesses are generally prohibited from hearing the testimony of other witnesses in the case.

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