Theranos founder Elizabeth Holmes leaves the Robert F. Peckham Federal Building with her defense team in downtown San Jose, California on Tuesday, May 4, 2021.
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Elizabeth Holmes, the contested former CEO of blood testing startup Theranos, suffered a severe blow on Wednesday when a judge ruled that customer complaints and blood test results could be used as evidence in her upcoming fraud trial.
Holmes’ attorneys have argued that the customer complaints should be excluded from the trial because an important database known as the Laboratory Information System, which contained three years of Theranos blood test accuracy and error rates, had failed.
“The potential use of the LIS database is speculative, and at the time Theranos shut down the LIS database, no exonerating value was apparent,” said US District Court judge Edward Davila in his judgment on Wednesday.
Holmes has claimed that their defense is hampered by the loss of millions of blood test results in the database.
However, the judge ruled that there was no evidence “that the LIS database contains accuracy data for all tests performed,” adding that “no conclusions can be drawn about accuracy from the LIS data alone, which suggests this that the database would not provide a complete record of what accuracy could be finally determined. “
Holmes’ defense team and the U.S. Attorney’s Office spent months pointing at who was responsible for the missing LIS database.
Prosecutors say Holmes and her executives deliberately dismantled the database and handed investigators a useless duplicate after a grand jury summoned them in 2018.
However, Holmes blames prosecutors for labeling the missing database an “investigative error,” adding in a previous filing with the court that “the reason the government built its case on this fluctuating house of cards of irrelevant evidence is because that it was lost – or worse “. He didn’t want to analyze the charges – the actual evidence of test results in this case. “
The judge’s ruling also denied Holmes’ motion to exclude any findings from the Centers for Medicare & Medicaid Services that were found to be harmful to the company.
Once a Silicon Valley darling, Holmes raised over $ 700 million from powerful venture capitalists for Theranos over the course of a decade. She claimed Theranos would revolutionize the blood testing industry with technology that could perform hundreds of tests on just a drop or two of blood.
Holmes, along with her COO Ramesh “Sunny” Balwani, faces a dozen wire transfer frauds and a conspiracy to commit wire transfer fraud allegations. Both have denied any wrongdoing and pleaded not guilty.
Holmes’ attorneys did not immediately respond to CNBC’s request for comment.