Elizabeth Holmes trial: whistleblower testifies to “frequent” manipulation of data

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Erika Cheung, a former Theranos a lab worker turned whistleblower, explained how the company manipulated the data in order to pass the quality control in it testimony in Holmes’ fraud trial Tuesday and Wednesday.

Cheung said the data manipulation happened “frequently,” so that the company’s core asset looked good to investors. She testified that Theranos employees would remove up to two of the six data points in a test to achieve the desired result, CNN reported.

To investors, Elizabeth Holmes promoted a blood testing machine that could accurately diagnose a myriad of conditions with just one drop of blood. These brags helped her raise hundreds of millions of dollars for her business, but the brags were empty and they made some employees at the now-defunct company uncomfortable.

During Cheung’s testimony, the government presented charts that included data from 2014 showing that about 25% of tests performed on Theranos technology failed quality control. This failure rate was dramatically different from that of devices already approved by the United States Food and Drug Administration, which were much more accurate. The former employee testified that these approved devices rarely fail.

During her tenure at Theranos, Cheung admitted that she had become “really stressed and uncomfortable with what was going on” at the company. She was the second witness called by the government in the Holmes trial.

The lab worker said she had finally amassed enough data to show that the company’s technology was not as promising as it was presented. And that made her worried when it came to using technology to determine patient outcomes.

Cheung tried to voice concerns about technology failures internally, but said his voice was not being heard. It was at this point that she communicated her problems to the outside world, especially The Wall Street Journal and investigative journalist John Carreyrou, who went on to reveal Theranos’ story.

Carreyrou’s findings have since been published in the book Bad blood and have been used in several documentaries about Holmes. In addition to NewspaperCheung raised his concerns with the Centers for Medicare and Medicaid Services, which then began investigating a company Theranos lab. This investigation ultimately led to the shutdown of the operations of this laboratory after did not follow federal guidelines, and subsequently led to Theranos closes its laboratories Across the country.

After sharing his story with the Newspaper and CMMS, Cheung left Theranos.

While his testimony seems prejudicial to Theranos, Holmes’ defense team pointed out Cheung’s limited testing experience as it was his first job in the industry. The legal team presented their own charts that indicated the company disclosed when data was removed from sets to demonstrate accountability.

Additionally, Holmes’ legal team noted that the data was never approved by the former CEO, but by lab administrators. Part of Holmes’ defense strategy is to demonstrate that it is the lab manager and not the CEO of Theranos who decides the accuracy and reliability of the tests.

In her testimony, Cheung said she never raised her concerns directly to the CEO, but noted that another whistleblower, Tyler schulz went to Holmes with these concerns.

Holmes trial, which finally started last week after a year of delay due to the ongoing pandemic, is expected to resume on Friday. The former CEO was accused of several counts of fraud.