Theranos whistleblower testifies in Elizabeth Holmes fraud trial
SAN JOSE - Two former Theranos employees aired out the internal workings of the failed Silicon Valley blood testing startup in court Tuesday in the high-profile trial of former company CEO Elizabeth Holmes.
It was the first full day of testimony following opening statements last week.
So Han Spivey, who also goes by Danise Yam, served as the company’s corporate controller and detailed a company that was struggling financially, eking out payroll before getting a massive cash infusion from investors.
According to the balance sheets, Theranos was hemorrhaging cash early on -- recording $376 million in losses before 2014.
At the same time, Theranos was projecting that it would earn more than 100 million annually – helping it receive a whopping $740 million from investors in 2014.
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That same year Holmes doubled her salary to $400,000 and began flying in private jets.
By the afternoon, high-profile whistleblower Erika Cheung took the stand next. She described working in Theranos’ research-and-development and testing labs, where workers used modified third-party testing machines.
Elizabeth Holmes, the founder and former CEO of blood testing and life sciences company Theranos, arrives for the first day of her fraud trial, outside Federal Court in San Jose, California. September 8, 2021. - California jurors tasked with deciding
She said the so-called Edison machines that Theranos claimed would revolutionize the industry never worked as advertised.
Cheung resigned from the company over concerns about flaws in the testing process.
"If the whistleblower came across as believable – it’s devastating," said KTVU legal analyst Michael Cardoza. "It tells the jury, here’s an insider that worked for the company, got a paycheck from the company but yet at some point realized that this company was based on smoke and mirrors."
Before testimony began, Judge Edward Davila dismissed juror no. 7 – a 19-year-old woman -- due to financial hardships.
An alternate was moved onto the panel, changing the makeup of the jury to 8 men and 4 women.
The trial will continue Wednesday and Friday when more former employees and Theranos patients will likely take the witness stand.
Evan Sernoffsky is an investigative reporter for KTVU. Email Evan at firstname.lastname@example.org and follow him on Twitter @EvanSernoffsky