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She joined Theranos fresh out of the University of California, Berkeley, a self-described “starry-eyed’’ 22-year-old chemist and biologist who saw Elizabeth Holmes as a role model: the CEO who would revolutionize the blood testing industry.

Seven months later, Erika Cheung quit her job as a lab associate at the company and became a disillusioned whistleblower, her life now enveloped by one of the biggest business scandals in American history. She was among those who had made clear to federal regulators that she viewed Holmes as a liar who had put patients at risk. (Holmes, and her company’s former president, Ramesh Balwani, have been indicted on charges of defrauding investors out of hundreds of millions of dollars as well as deceiving hundreds of patients and doctors.)

In an interview with STAT, Cheung reflected on how she was duped by Holmes, why she believes the disgraced CEO should spend at least five years in prison and how the rifts between her fellow whistleblower Tyler Shultz, and his famous grandfather, George Shultz, went on longer than people know.


Shultz and Cheung, both close friends, have turned their attention since they left Theranos to creating an organization called Ethics in Entrepreneurship in the hope of offering advice for people in the world of technology to sniff out bad players early on. Cheung, now 28, lives in Hong Kong, but was in Boston this week to appear at the Atlantic magazine’s Pulse Summit on Health Care, which was co-sponsored by STAT.

Here is a transcript of the interview, which was edited for length and clarity.


Do you think Elizabeth Holmes should go to jail?

Yes. I’m not the type of person to want to serially punish someone for something that they’ve done. I think people can be forgiven for mistakes that they’ve made. But at the same time, to set that example, to say that you have lied to your investors, you have lied to your employees, you endangered the lives of tens of thousands of patients. And now, you’re going to just get away with that? What kind of example does that set for other people within this industry? That it’s OK to raise a whole bunch of money, put on this theatrical show and now walk away scot-free, versus the Fyre Festival guy. On a much smaller scale, all these partygoers ended up going to this festival; they were in FEMA tents and everything, he got five to six years. (She was referring to Billy McFarland, the founder of the Fyre Festival, who was recently sentenced to six years in prison for promoting a “luxury music festival’’ that bilked its backers.)

How long do you want to see her locked up? What would make you feel like she’s paying …

Her dues? For me, honestly, my only agenda in all of this was for them to stop processing patient samples. Everything beyond that I’m going to leave it up to the justice system. I just wish that she would have the common sense to come forward and apologize. In terms of number of years in prison? Definitely more, I suppose, than the Fyre Festival guy.

What do you make of her being very public these days, out with her reported fiance and her dog?

It’s just weird. It’s just a bit surreal. When you see someone have this situation and pretend that everything is normal. It’s so bizarre.

Elizabeth Holmes interviewed you to get the job. Did you think anything was off at the beginning?

Initially I came in starry-eyed. I admired Elizabeth Holmes. She was this female entrepreneur in biotech. Really what she represented to me was that you could work really hard and get to a position of running your own company. There was something very powerful about the mission she was trying to put forward: making health care accessible, affordable, allowing for price transparency when you get your blood diagnostics. It’s not until you look at her as a character in retrospect that you realize the red flags and warning signs of her behavior and her personality and the kind of act that she put on to be the front face of Theranos.

When did things turn for you?

Things started to turn for me about a month, two months in. Initially I started in research and development. When things fail in R&D, that’s fine. That’s expected. But about a month in we were starting to get patients that were rolling in from our Walgreens center in Palo Alto. And I had run this patient sample and before I’d run the patient sample, I was running all these quality controls and they kept failing. And failing. Over and over. I was up until 3 a.m. trying to get quality controls to work and they weren’t working. Things weren’t working all the time. They were deleting data as outliers. Untrained staff were making decisions. Upper level management was saying, “Just get the results out,” at any cost. And get it out quickly.

The better-known whistleblower, your friend Tyler Shultz, knew Holmes much better through his grandfather. (George Shultz was a former secretary of state and investor and champion of Holmes, who sided with her when his grandson started raising doubts.)

Tyler was a good contact for me to have because he had direct contact with Elizabeth Holmes because of his grandfather. He was eating Thanksgiving dinner with Elizabeth Holmes.

Are things OK with Tyler and his grandfather?

Yes. It took a while. A lot longer than I think people realize. It took quite a while. Until seven months ago. I think his grandfather finally realized the truth. They’re finally getting dinner together.

But it’s not what it was. It’s hard, right? For George Shultz, this was a legacy investment in a way. This was one of those last final projects that he was investing in.

It must have been very painful for Tyler.

Oh, yeah. Can you imagine? Tyler’s dad too. Tyler’s dad had to be put between his own father and his son. Tyler’s dad supported Tyler but really wanted it to end, all the legal battles.

Are you surprised by all the sustained publicity over Theranos, the major movie projects?

Yes. It’s blown up into this big story, this big case. One, she got hyped up to this large degree. She was on Fortune, she was considered the youngest billionaire in the United States. And I think rising to the height of everyone treating her as this celebrity and realizing it was on a basis of lies, and not only that it was a company that was around health care. This was people’s lives. It wasn’t developing an app that was like janky you couldn’t get your pizza delivered on time.

What’s your sense of whether Elizabeth Holmes knowingly committed fraud or deluded herself about her actions?

It’s hard when you’re dealing with someone who was clearly delusional to really understand what is going on in their head and what they perceive as reality versus what they’ve sort of imagined. Do I think she was out to scam everybody from the very beginning? At lot of people disagree with me, but I don’t think that was the case. I think she went in, at least initially, with good intentions. But she let her ego get in the way. She was more focused on being the next Steve Jobs of health care.

People have called her a “psychopath.’’

I don’t know her well enough. But clearly there’s something not right with her. She’s never made an apology. She’s never come forward to the patients and said, “Hey, I’m sorry.”

When you say she’s “not right,’’ do you look back at any clues that you didn’t pick up on?

The secrecy. The extreme amount of paranoia of these big medical diagnostic companies going to come after her and destroy her technology. The fact that before you even go in there and interview you have to sign an NDA. Responding to questions, “Well, until you work for the company, that’s trade secrets.”

Did you see that during your interview with Holmes?

She just dodged a lot of questions. Like, “Oh, so what kind of technology are you guys using to run the blood samples?” It would always be the case, “Until you work for the company, those are trade secrets — you’ll be able to find out what we’re working on.”

What’s the most off-the-wall thing you saw Holmes do?

The lying. Watching her do an article with Fortune or with Forbes, and it would just be such a different picture, just a wildly different picture of what was going on internally in the company versus what was being portrayed in the media. It was so disparate to the reality: Sitting at your lab bench and going, “What is she talking about?”

What are you doing now?

I founded a nonprofit basically focused on preventing major scandals from happening, like Theranos.

We’re focused on three different stakeholders: providing resources and tools for entrepreneurs, so that at every stage of development they understand the ethical considerations in building a business and in running a business, from hiring to the culture you implement to building your product. We’re working with ethics departments and seasoned lawyers and compliance officers to basically build out the tools to help entrepreneurs.

How big is your staff?

We launched six weeks ago. At the moment we have six people. I’m the only full-time. Tyler is coming on board; he helps with introductions and the strategy of the organization. At this point, we’re self-funded and we’re talking to a few investors.

What are long-standing consequences of the Theranos saga?

Investors are very cautious. Is this the next Theranos? A lot of people are very discouraged by this whole scenario. What are the implications of having a strong female founder in biotech being associated with the largest and biggest scandal in Silicon Valley to date? What are the unconscious biases that may go against female founders who are very charismatic, who are very good at selling, in terms of approaching investors or selling to customers?

Do you think this could happen again?

Yeah. Maybe not in the same style. A lot of people have been very skeptical of the fireworks and show that Silicon Valley puts on about how they’re going to change the world and make an impact in this very grandiose way without necessarily having the evidence to back up how they’re going to do that.

As software in general starts to integrate more into regulated industries, we’re going to have to be on high alert of these types of scenarios happening again.

Now that Holmes is out of the picture, is there a woman founder in the sciences you admire?

I like Anne Wojcicki from 23andMe. She’s a very kind, strong female leader. She’s very pragmatic. She’s been able to confront these different challenges of building a tech company in a highly regulated space with a certain level of sensibility about her. It’s not that she gets defeated when regulatory challenges come up.

Your advice to entrepreneurs to do good in the health space?

There still is a lot of opportunity to solve a lot of problems in health care. And even though Theranos was how not to do things, there are many good ways to do things well and we’re at an exciting period in this convergence between software and computing power and biology and synthetic biology that really we’re going to start seeing a lot of innovation in the health care space.

  • “could this happen again?” – of course, it can and it will. People love a fantasy story and a get rich quick scheme. Holmes is a con that believed in her own con game and suckered a lot of people. The real question is who are these suckers and why didn’t they do their due diligence before jumping in with both feet? These are the same people, the “savvy” investors and corporate leaders that will invest in the next over-hyped, unscientific and unproven product.

  • Not buying the fact that these two smug, self absorbed millenials are being hyped as so honorable. They were just as complicit as every other employee of this disgraceful group of people and only rolled over on the two top criminals after it became apparent that they would personally benefit by doing so.

    • I suggest you listen to the podcast documentary “The Dropout” by ABC News. These “millenials” were two of the few willing to speak out when things were going sideways and their consciences overruled what they were being told to do and think. They did so at great personal cost, initially.

    • Thanks for the suggestion, Syd, however I have already viewed the HBO documentary which clearly documents how the lawyered-up Theranos owners were successful in keeping the scam going for well over a year. This was only possible by the very opposite of what has been portrayed as heroic “whistle blowing” by these two. In addition, the HBO show clearly documents additional after-the-fact “denouncers” of this chicks fake business. All kept their collective mouths shut, while continuing to be well compensated even though their workplace was obviously shrouded in secrecy, dysfunction and paranoia. Only the grandson of the former cabinet member, after admitting he’d been in awe of the flake Holmes upon landing such a prized internship then job, “grew a pair” after collecting a check from such a hostile workplace for more than a year.
      I call BS and stand by the denouncement of ALL those who allowed this farce to go on for over 6 years.

    • Both Tyler and Erika were beginning scientists in their first job out of college – most likely Research Assistants who had no power at Theranos. Both were concerned about the lab practices at Theranos and both raised their concerns to the highest levels of upper management (Holmes and Balwani). Erika was told she was not qualified to judge the technology and Tyler was threatened. When it was clear to them that the practices at Theranos were illegal, both contacted sources outside the company to reveal this. How is that complicit? At the time they did this they were risking their careers by being blacklisted and risking financial ruin from the Theranos lawyers. There was no upside for them to do what they did at the time.

  • People are so gullible. I simply cannot understand how the industries leaders in blood testing didn’t expose this fraud.
    Surely they knew through their own research and development that it simply wasn’t possible given the technology to date.

  • I really enjoyed this article. Ericka Cheung responses are thoughtful, insightful, honest and real. Her answers were direct and she did not hold back. Quite often l read interviews and they are full of standard boring responses, but l felt like she gave a very accurate depiction of what was happening in that company. It’s unfortunate that is went on so long. I agree Elizabeth should serve time. She seems to still be living the high life almost as if she thinks she’s untouchable.

  • The way, and when, Elizabeth Holmes did not blink is a big clue about her intentions. A man I met who had been a major player in Stephen Covey’s organisation, owned an NFL-style football team in England that went bust, and was the co-owner of a MLM health supplement also never blinked. He also claimed to be an expert in NLP. I have been in B-to-B sales for 40 years and I can tell you that this “not blinking” is a willful, conscious attempt at auto-suggestion. You will notice, when she is on talk-shows speaking casually almost socially she blinks normally. But when she’s pitching her business, the “change the future” pitch, the “say goodbye too soon” pitch, she stops blinking. It was the same with the MLM man. Shaking my hand, looking through my pupils to the back of my skull, I knew he was a confidence artist. On stage, he roo told a heart-rending story about how antioxidants saved his disabled daughter; a story I was to learn he told every time he pitched his product. This is a symptom of what happens when eccentrics and nerd geniuses start trying to apply 90 year old knowledge of salesmanship. They pervert it. They need guidance, from people like me or Jordan Belfort, on how to handle the dynamite.
    ~ W. Clay Langhorne

  • Elizabeth Holmes lied as soon as it was obvious none of Theranos equipment performed as designed, failing to produce quality results of blood analysis. She and Balwani are co conspirators to continue the deception as long as possible to build a house of cards. Holmes dropping out of college without any degree in business, finance, medical technology, simply used her connections to bankroll another ponzi like scheme knowing full well investors have to wait until Theranos begins operations in clinics, hospitals and everywhere blood analysis in performed before realizing a return on their investment. The monies gone and Theranos is defunct. Disillusioned and very skilled workers have nothing to be ashamed about as sometimes idealism gets in the way of learning. Fortunately most are skilled to work elsewhere. Holmes is still ignoring her failure as a person with zero remorse.

  • Yes, I’m her father. While we can easily point to the leadership of this company and say how horrible they were and the consequences they should face, what of all those people who saw the fraud but said nothing? What of the Board of Directors who turned a blind eye and allowed this to happen over the course of 10+ years? What about the media and the public officials who jumped on the bandwagon and sang the company’s praises while not doing the slightest to logic-check or scrutinize the company’s claims. A fraud of this kind doesn’t happen in a vacuum of one or two individuals, it takes whole lot of negligence, cowardice and indifference on the part of many people to allow something like this to go on for this long.

    • I agree that there were others other than Tyler and Erica who could have spoken up but the threat of Theranos lawyers probably kept them from doing so. The board members were not trained in biology or medicine so most were unaware of the fraud. There was one board member who was sceptical and he resigned. I think there should be legislation to prevent unethical lawyers like Boise from enabling firms like Theranos to perpetuate their evil.

    • Greed sir, plain and simple. Everyone who worked there knew. Paychecks kept them silent….this is a female trump, a carnival barker who lies and cheats and STUPID PEOPLE BELIEVE HIM …….THIS IS POSITIVELY GREED. PLAIN AND SIMPLE SHE LIKE TRUMP IS AN IDIOT NARCISSIST

    • It is very disturbing to me how we can let others off the hook on this… “The board were not trained in biology or medicine so most were unaware of the fraud.” Their job is to ensure proper corporate governance and protect shareholders, they didn’t bring up their lack of expertise when their compensation came in. Everyone could be sued for just about anything but weighed against passing off bad test results that could literally kill someone, it’s a hollow excuse. As to Elizabeth Holmes punishment, in CA, the penalty for car theft is 1-3 years in prison. On the higher end, a car is worth $100K, she defrauded $70 million from people, not from a moment of stupidity, weakness or immaturity, but as a persistent scheme lasting 15 years. Is 6 years really equitable justice?

    • “It is very disturbing to me how we can let others off the hook on this…” I agree that the board of directors of Theranos (with the exception of Avie Tevanian) were completely ineffective. They were incompetent but I’m not sure they could be labelled as being complicit with the Theranos fraud being perpetuated. Holmes was very clever about keeping people in the dark and being opaque about the technology. She was able to convince both Walgreens and Safeway who both neglected to do proper due diligence to partner with Theranos by both obfuscation and in one case getting a critic at Walgreens kicked off the Theranos project by claiming he was difficult to work with.

  • Holmes was a wealthy, attractive young woman whose father was an executive at Enron.
    Attractive, wealthy young women are not at all discriminated against by members of their own social class. If anything their gender helps them tremendously.
    People who strongly believe in things like affirmative action, environmentalism, or other causes near and dear to the hearts of the liberal gentry are very vulnerable to scam artists like Holmes, or to firms that promise the moon and check all of the correct boxes, like the failed green energy firm Solyndra.
    That a few wealthy investors lost billions is unfortunate. But far worse are the pension funds, life insurance companies, or banks who lost billions of dollars to these failed ventures, money that was meant for widows, retirees on fixed incomes, or nest eggs for working families.
    The money stolen generally went to things like Holmes’ rented mansion and luxurious lifestyle, while some of their smaller investors watched their shrinking retirement accounts or rising insurance premiums with dismay.
    Holmes should get a lengthy sentence like Bernie Madoff’s, as her crimes are in some ways very similar, though I doubt she’ll get even a few years. Prison sentences are another area where there are always very noticeable double standards based on gender and social class.

    • “People who strongly believe in things like affirmative action, environmentalism, or other causes near and dear to the hearts of the liberal gentry are very vulnerable to scam artists like Holmes..” Just remember her board was full of Republicans who do not “strongly believe in things like affirmative action, environmentalism, or other causes near and dear to the hearts of the liberal gentry” as you make this ridiculous statement

  • Holmes is obviously a disturbed person who is guilty of swindling investors and putting patients’ health at risk.

    Jail time is appropriate.

    Restitution on the scale of her fraud is not really going to happen. She would have to be allowed to build an even larger house of cards to earn enough money to pay investors back.

    Im not convinced that the institutional investors in Theranos deserve much sympathy, especially organizations like Walgreens that ignored warnings from competent people. If one Stanford professor could spot the flaws in her approach, on the basis of a couple of meetings, there surely must have been hundreds of other experts in the market who also saw through he fraud. Investors interested in due diligence could have secured sound advice on the Theranos business model and its underlying technology.

    I am amazed that she was able to pull this off. I spent my career in the scientific instrument business, with a small peripheral involvement with medical testing. When I read about her “technology” it seemed like a total scam and not the basis for a healthy, scalable business. But naive people with more money that good sense got sucked in by her BS. The big players in medical testing just stood back and waited for Theranos to self destruct. If she had been technically successful the big players would have had no problem competing with Theranos since there was no obvious intellectual property to block competitors.

    One of the checks on such a thing happening is supposed to be the board of directors. The Theranos board failed in its fiduciary responsibility to the investors and its ethical responsibilities to customers. The board members should be investigated and held accountable.

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