Theranos CEO wooed investors while lab director saw trouble

Theranos Founder Fraud Trial

SAN JOSE, Calif. (AP) — Fallen Silicon Valley star Elizabeth Holmes convinced media mogul Rupert Murdoch and other billionaires to invest in her biotechnology startup despite warnings its unconventional blood tests were dangerously unreliable, according to evidence presented Tuesday during her criminal trial.

The revelations emerged during the eighth day of a high-profile trial revolving around allegations Holmes duped investors, customers and unwitting patients as CEO of Theranos, a company she founded after dropping out of college in 2003 when she was 19.

Holmes briefly became a Silicon Valley sensation while peddling the premise she had invented a breakthrough technology scan for an array of health problems using just a few drops of blood taken with a finger prick.

But Adam Rosendorff, a medical doctor who oversaw Theranos' clinical laboratory from September 2013 through November 2014, drew a darker picture Tuesday while testifying as witness for the federal government prosecutors trying to convince a jury to convict Holmes on 12 counts of fraud.

Holmes, 37, has pleaded innocent, maintaining she poured nearly 15 years of her life pursuing a great idea that simply didn't pan out. She could be sentenced to 20 years in prison if convicted.

Rosendorff insisted that he repeatedly tried to warn Holmes and Theranos' chief operating officer and Holmes' former lover, Ramesh “Sunny" Balwani, that the tests were so rampantly inaccurate that he was being besieged by complaints from doctors.

But Holmes and Balwani seemed more interested in cultivating Theranos' image as a potentially game-changing company than protecting people's health, according to Rosendorff.

“The number and severity of issues had reached a crescendo," Rosendorff testified in the San Jose, California, courtroom, explaining why he decided to leave Theranos rather than risk breaking his oath as a doctor to “do no harm." He said he was so appalled that he refused to shake Balwani's extended hand when he finally left Theranos.

Prosecutors also displayed a series of text messages exchanged between Holmes and Balwani, attempting to prove they were more interested in pursuing fame and fortune than protecting people's health.

At the same time Rosendorff was raising objections about Theranos' blood-testing technology, Holmes sent at text to Balwani to let him know that she had completed deals securing about $150 million from Murdoch and the Walton family, which is behind Walmart.

“They are not investing in our company,” Balwani texted back. “They are investing in our destiny."

Those investments helped value privately held Theranos at $9 billion, with Holmes holding a $4.5 billion stake.