November 30, 2022

Holmes gets new hearing after disheveled gov’t witness shows up at her house

Holmes gets new hearing after disheveled gov’t witness shows up at her house
Holmes gets new hearing after disheveled gov’t witness shows up at her houseHolmes gets new hearing after disheveled gov’t witness shows up at her house
Enlarge / Elizabeth Holmes, founder of Theranos Inc., arrives at federal court in San Jose, California, on Thursday, September 1.

On the brink of sentencing for her four fraud convictions in January, disgraced Theranos founder Elizabeth Holmes will get a new evidentiary hearing in which the judge in the criminal case will weigh “limited, but serious” allegations that government prosecutors manipulated testimony from a key witness, former Theranos lab director Adam Rosendorff.

The new evidentiary hearing is scheduled for October 17, the day on which Holmes was previously set to be sentenced. Her sentencing is now delayed, with rescheduling possible between November and January.

The new evidentiary hearing stems from an unusual incident in August, in which an allegedly distraught Rosendorff showed up at Holmes’ home to try to talk with her. According to court documents, Rosendorff first called Holmes’ lawyer at around 5 pm on August 8 and left a voicemail in which he asked for an arranged meeting with Holmes at her house. The lawyer has a recording of the voicemail. An hour or so after leaving that message, Rosendorff—having not heard back from the lawyer—showed up at Holmes’ home. Holmes did not speak with Rosendorff, but her partner, William Evans, did.

Evans claims that Rosendorff appeared at the front door of their home looking disheveled and anxious. His shirt was untucked, his hair messy, and his voice shaky. Though Evans said he tried to get Rosendorff to leave, the former lab director apparently kept talking, saying he felt guilty for the way things had gone in the trial and that he was losing sleep over it. He thought if he could just talk with Holmes directly, it could be “healing” for both of them.

Key to the judge’s interest in Evans’ account of the exchange, Rosendorff allegedly suggested that the government prosecutors had manipulated his testimony. Specifically, Rosendorff said that while he was on the stand, government prosecutors worked to make everyone at Theranos “look bad,” and for things at the company to appear worse than they were. This, Rosendorff allegedly confessed, is what was weighing on him and keeping him up at night. He added that he had tried to answer all the questions during the trial honestly.

Fishing for the truth

With this information, Holmes’ lawyers filed a motion for a new trial. In response, government prosecutors submitted a sworn declaration from Rosendorff in which he stated that he “answered every question put to me completely, accurately, and truthfully to the best of my ability.” He also declared: “I have no reason to believe that the government misrepresented or created a misimpression about Ms. Holmes’ or Mr. Balwani’s conduct at Theranos.”

The judge in the case, US District Judge Edward Davila, expressed skepticism of this whole situation, even questioning whether it was a “fishing expedition” for the defense to net more evidence. He also noted that Rosendorff’s testimony was not likely to be relevant to the charges on which Holmes was convicted, which relate to defrauding investors. As the lab director who dealt directly with the clinical testing, Rosendorff’s testimony is most relevant to charges relating to defrauding doctors and patients—counts on which Holmes was acquitted.

But, Judge Davila also noted that a star witness showing up at a defendant’s house is highly unusual, and the allegation that the government engaged in misconduct is serious. As such, he agreed to put off sentencing and hold an evidentiary hearing. But, he reportedly warned that the hearing should be narrow, focused, and short.

“I don’t think it will be a lengthy process,” Law360 quoted him as saying. Speaking directly to Holmes’ lawyer, he added, “This is not going to be a fishing expedition.”

“Really what I want to know is, did [Rosendorff] tell the truth?” The Wall Street Journal reported him saying.

Since Rosendorff’s surprise visit, Holmes’ lawyers have filed two unrelated motions for a new trial. Davila has not yet made any decisions on those motions.