Pandemic will delay blockbuster trial of ex-Theranos CEO Elizabeth Holmes

It was supposed to be the blockbuster courtroom drama of summer 2020: Former Theranos CEO Elizabeth Holmes was to go on trial for defrauding investors, doctors, and patients about blood tests that were too good to be true.

Now, the coronavirus pandemic has delayed the trial until at least October — and it threatens to upend the proceedings when it does take place. During a status conference conducted via teleconference on Wednesday, federal judge Edward J. Davila rescheduled the trial to begin jury selection on Oct. 27. He said he would consider pushing the trial back to early 2021 if the coronavirus remains a threat.

The case had been expected to highlight the dangers of medical hype and hubris. Now, it may also become the first truly high-profile court trial to take place in the Covid-19 era — creating a risk of infection for the many legal professionals, journalists, and spectators expected to crowd the Silicon Valley courthouse where the proceedings will happen.

Holmes’ lawyers had been pushing to move the trial to early next year. In a status memo filed this week, Holmes’ lawyers pointed to the extraordinary risks of conducting a trial certain to command national attention at a time when the coronavirus may not be controlled. “The trial will be months-long, and the Court will be crowded. The defense, jurors, and witnesses will all enter the courthouse through crowds of onlookers who have often approached and even touched counsel and the defendant during entry to the building,” Holmes’s attorneys wrote.

Holmes’ attorneys added that there appears to be a “significant” possibility that participants in the trial could contract the virus during the proceedings, an event which would “significantly disrupt” the proceedings. “All trial participants would need to be quarantined for 2 weeks or longer. The risk of a mistrial would be substantial,” they wrote.

Holmes and her former deputy Sunny Balwani are accused of lying about the capabilities of their blood-testing technology at what was once health care’s richest venture-backed startup. The saga has captivated the public in a way that industry controversies rarely do, becoming the subject of a book, a podcast, and competing documentaries.

In 2018, Holmes and Balwani were charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. They each pleaded not guilty, and face a maximum of 20 years in prison and up to $2.7 million in fines. If convicted, they may also have to pay back any cash the government could demand as restitution for the alleged fraud.

Government prosecutors now plan to seek what’s known as a superceding indictment that would add several allegations to the mix. The government wants to introduce two new wire fraud counts relating to a doctor and a patient who were allegedly defrauded by Theranos’ testing. It also wants to allege that the fraud began no later than 2010, rather than 2013, and that Theranos’ allegedly defrauded investor pool was wider than previously described.

These new allegations could complicate efforts to begin the trial in October. A grand jury must be convened and it must return the new indictment — something that could be delayed during the pandemic. Holmes’s attorneys must also be given time to prepare, such as by calling new witnesses and securing experts.

A status hearing scheduled for July 20 to assess the spread of Covid-19 and determine whether it will be safe to proceed with an October trial start date.