A judge in the sprawling case against Theranos founder Elizabeth Holmes and former company president Ramesh Sunny Balwani has thrown out some of the charges after her defense team argued prosecutors’ case was too broad and too vague, SFGate reported on Wednesday.
The defense team tried to have all 11 charges thrown out, saying the indictment against the execs of the scam blood-testing company was “full of ambiguity and fudging language” and that prosecutors were “inserting these phrases so they can shift their theory as they go along in the trial.” They particularly took issue with parts of the indictment that appeared to set up a “vast number of potential sources of misleading statements” ranging from Theranos marketing materials to press releases and other company communiques. (The defense team also claimed that Theranos’ pin-prick blood testing machines actually worked fine, despite all evidence to the contrary.)
U.S. District Judge Edward Davila ruled that prosecutors could not continue to charge Holmes and Balwani with conspiracy to defraud doctors and patients whose blood tests did not work as advertised, citing the curious logic that since insurance paid for the tests those parties were never technically financially harmed, SFGate wrote. According to Reuters, the judge also threw out charges claiming the duo conspired to have doctors make fraudulent statements about Theranos technology.
The bad news for Holmes and Balwani is that they’re only off the hook for the conspiracy charges and they still face nine counts of wire fraud that go to trial in August 2020. A DOJ press release on the indictment noted that each charge still carries the same maximum penalty of 20 years in prison and $250,000 per count, which stacks up to $2.25 million in fines.
Holmes already settled with the Securities and Exchange Commission in a separate civil case in 2018, which required her to forfeit millions of worthless Theranos shares, not hold an officer role at a public company for 10 years, and pay $500,000 in fines. Balwani continues to contest the SEC lawsuit.