SAN FRANCISCO — A federal court on Monday heard arguments over when to start the trial of former Theranos CEO Elizabeth Holmes and her former No. 2 Sunny Balwani, who are accused of defrauding investors, patients, and doctors in a blood-testing scandal that has rocked the business world and captivated the public imagination.
A judge proposed a trial start date of July 8, multiple news organizations reported from a status conference in federal court in San Jose on Monday. But the trial will likely start later than that, perhaps even next year. The next status conference for the case is scheduled for July 1. Whenever it happens, the trial is certain to draw attention far beyond the world of health care.
Holmes and Balwani are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. They each face a maximum of 20 years in prison and up to $2.7 million in fines, a figure that doesn’t include any cash the government might demand as restitution for the alleged fraud. Holmes and Balwani have each pleaded not guilty.
According to prosecutors, the former couple presided over a yearslong fraudulent scheme, lying about the capabilities of their blood-testing technology while making grand projections about future profits.
Last year, Holmes and Theranos settled similar fraud charges brought by the Securities and Exchange Commission. Balwani has contested the SEC charges.
Holmes stepped down from the company in June, and Theranos shut down in September.
The impending trial is the latest twist in a saga that began when Holmes dropped out of Stanford as a 19-year-old sophomore to found Theranos. Her company soared to a $9 billion valuation, the largest of any venture-backed health care firm, on the promise that it could diagnose scores of diseases with only the blood from a pin prick. But the story came unstuck in 2015 with a series of damning revelations in The Wall Street Journal, setting in motion a series of lawsuits, layoffs, and regulatory crackdowns that would eventually doom the company.
The saga has since become the subject of a book, a podcast, and competing documentaries.
It’s not clear yet what strategy Holmes’s lawyers will deploy to defend her in the upcoming trial. But a motion they filed last week suggests that it could involve jabbing at John Carreyrou, the Wall Street Journal reporter who broke the story of wrongdoing at Theranos and whose reporting spurred a series of regulatory investigations.
“The jury should be aware that an outside actor, eager to break a story (and portray the story as a work of investigative journalism), was exerting influence on the regulatory process in a way that appears to have warped the agencies’ focus on the company and possibly biased the agencies’ findings against it,” Holmes’s lawyers wrote in their motion. In an apparent effort to bolster that defense, Holmes’s lawyers are also seeking records documenting Carreyrou’s communications with the Food and Drug Administration and the Centers for Medicare and Medicaid Services.
Clarification: An earlier version of this story stated that the trial could begin this summer. It was changed to reflect the likelihood it may not begin until later. The headline was also updated.
I do not believe that either one of them will do any prison time. She is a piece of work, all right. Her hubris should be bottled and sold.
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