Former Theranos laboratory director Adam Rosendorff felt “obligated from a moral and ethical perspective to alert the public” about the Palo Alto blood-testing startup’s inaccurate test results, he testified Tuesday at the criminal fraud trial of company founder Elizabeth Holmes.
However, under aggressive cross-examination Tuesday afternoon, a Holmes lawyer sought to paint Rosendorff’s trial testimony as inconsistent with statements he’d made earlier.
Rosendorff, while testifying for federal prosecutors Tuesday morning, said he had struggled for months in vain to get Theranos management, including CEO Holmes, to address problems with test results and to implement a legally required process to check the accuracy of the firm’s lab equipment and practices.
“The number and severity of problems had reached a crescendo for me,” Rosendorff told the jury in U.S. District Court in San Jose, while he was under direct examination by a prosecutor. Complaints from doctors were frequent, and he felt pressured by managers to defend questionable results, he testified.
He quit in November 2014, after forwarding company emails to his personal account in case of a federal investigation and because he was thinking about filing a whistleblower lawsuit, he said. He talked to a lawyer, then to a Wall Street Journal reporter, he testified. The reporter, John Carreyrou, wrote a series of articles exposing alleged fraud at Theranos.
Holmes, a Stanford University dropout who founded Theranos in 2003 at age 19, is charged with allegedly bilking investors out of hundreds of millions of dollars, and defrauding doctors and patients with false claims that the company’s machines could conduct a full range of tests using just a few drops of blood. She and her co-accused, former company president Sunny Balwani, have denied the allegations.
Holmes’ brother Christian Holmes, hired at Theranos despite lacking a background in science or medicine, was making clinical decisions to approve re-drawing blood for tests that needed to be re-done, federal prosecutor John Bostic told the court. In a 2014 internal email shown to jurors, Christian Holmes wrote that “it seems a redraw is necessary given the disintegration of cells.”
Jurors had heard earlier in testimony from a former Theranos employee that the company paid employees for their blood to check testing performance. Bostic on Tuesday showed the court an internal email chain regarding a Theranos technician who had been taking a blood-thinner for 14 years, and received two Theranos finger-stick tests that produced unusually low readings. The technician’s doctor responded by raising the dose of the blood-thinner. “I have not felt right since the one increased dose and also experienced … skin bruising on my legs and arms,” a message from the technician said.
During cross-examination, a lawyer for Holmes attacked Rosendorff’s trial testimony. Attorney Lance Wade suggested that Rosendorff’s statements to federal agents and others during earlier depositions and grand jury testimony, about his reasons for quitting the Palo Alto blood-testing startup and the date it launched commercial testing, conflicted with what he told the jury last week in Holmes’ trial.
Wade, in aggressive questioning twice deemed inappropriately argumentative by Judge Edward Davila, got Rosendorff to acknowledge that while he said last week during the trial that “many factors” led to his resignation from Theranos — including that “the company believed more about PR and fundraising than about patient care” — he said in a 2019 deposition that his sole concern was the firm’s “proficiency testing” of its machines and processes. Rosendorff quit the company in November 2014, about a year and a half after he was hired.
Wade also sought to suggest that Rosendorff, in his trial testimony last week, omitted to mention that what he described as the launch of testing for the general public in September 2013 was actually only a “soft launch” for family and friends of Theranos employees. Public testing did not begin until November, according to an internal email shown on court displays.
Wade also assailed Rosendorff’s claim in his testimony last week that Holmes was “trembling” and appeared “nervous and upset” when Rosendorff came to her office with concerns about three particular blood tests — for glucose, potassium and sodium — that Theranos planned to launch for public testing. In grand jury testimony, Rosendorff had mentioned only potassium, Wade asserted. Rosendorff responded, “I was asked specifically about conversations with Mr. Balwani and Ms. Holmes about the potassium results,” Rosendorff said.
Holmes faces maximum penalties of 20 years in prison and a $2.75 million fine if convicted, plus possible restitution, the Department of Justice has said.