Theranos boasted of “the utmost accuracy” in mailings to Rupert Murdoch and different buyers

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Rupert Murdoch

Drew Angerer | Bloomberg | Getty Images

SAN JOSE, CALIF. – Theranos sent files to high profile investors, including billionaire Rupert Murdoch, claiming the healthcare company had “the highest level of accuracy”, according to a court testimony Tuesday.

Elizabeth Holmes once had some of America’s most powerful business leaders behind her start-up Theranos. The revelations came in the seventh week of the Holmes criminal fraud trial in San Jose.

Daniel Edlin, a former project manager recruited by Holmes’ brother Christian, testified that he would prepare files on Theranos, which he would send to investors “based on an approved checklist of items,” adding, “Elizabeth asked for review “. As soon as Holmes approved them, Edlin testified, he would send the files to the investors.

The jurors were shown the investment portfolio sent to Murdoch, who invested $ 125 million in Theranos. One section of the folder read: “Theranos provides tests with the highest accuracy.” Another section said the blood test technology “produces much higher integrity data than is currently possible”.

Although the founder of Fox and News Corp. lost his investment in Theranos, it did not affect Murdoch’s total fortune much. Today it is valued at $ 9.4 billion, according to the Bloomberg Billionaires Index.

In an email dated January 2015, Holmes wrote to Murdoch: “It was wonderful to have you here today. I am very much looking forward to the opportunity to continue our talks, including one day a more in-depth talk about China … [It] I would be honored to have you in our company. “

Murdoch replied, “Thank you Elizabeth. Enjoyed every minute. Any blood work? See you soon, Rupert.”

The next day, a Theranos scientist emailed Murdoch’s blood test results to Edlin and Daniel Young, a Theranos vice president. “CO2 is going to flow a lot sooner than usual, so it’s a bit high … what are you going to do with it?” wrote the scientist in an email. “We don’t have a rehearsal for a replay as it was a short tie.” Edlin testified that they could not repeat the test because they did not draw enough blood from Murdoch.

Holmes raised more than $ 900 million from investors over the course of a decade. Her health company promised to run hundreds of tests with just a drop or two of blood. But in 2015, former Wall Street Journal reporter John Carreyrou published a series of investigative reports that revealed the inaccuracies in the blood tests.

“I remember that investment portfolios [Murdoch]”Said Edlin.

“Did you play a role in the preparation or mailing of these investment folders?” asked John Bostic, a US assistant attorney.

“I don’t remember,” said Edlin.

Murdoch is on the list of possible witnesses to testify for the government. A spokesman did not immediately respond to CNBC’s request for comment.

Prosecutors also questioned Edlin about Holmes’ romantic relationship with Ramesh “Sunny” Balwani, the company’s president and COO, and her deputy.

“I’ve been to meetings where Sunny said he was leaning on Elizabeth on certain things, and in general, Elizabeth was the CEO,” Edlin said. “She had the final decision-making power, so to speak.”

According to unsealed court documents filed by Holmes’ attorneys, part of their defense strategy could be to blame Balwani, who will be tried separately next year. Holmes defenders claim Balwani controlled and manipulated Holmes physically and mentally. Balwani categorically rejects the allegations.

Holmes and Balwani did not provide information about their relationship to many investors, board members and employees of Theranos. Edlin testified that he first heard of the couple’s romantic relationship when he was at Duke University with Holmes’ brother.

“And when you worked at the company, did you know you were in a relationship?” asked Bostic.

“Yes,” said Edlin.

“Was Mrs. Holmes living with Mr. Balwani at that time?” asked Bostic.

“Yes,” said Edlin.

“Is there anything during these interactions that you remembered about the way Ms. Holmes and Mr. Balwani acted together?” asked Bostic.

“It’s always been a more relaxed environment outside of work,” Edlin said. “I didn’t really talk about work. It was a lot more relaxed, sociable.”

Edlin’s testimony continues on Wednesday.

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