Thread by @doratki

We're back for a short-ish day in Elizabeth Holmes' criminal fraud trial. Judge Davila is on the bench. Holmes' counsel wants the judge to exclude certain communications w/ the military, but prosecutor John Bostic says they're "inextricably intertwined" w/ the alleged fraud here.

Bostic says Holmes "had to get [investors] on the hook, if you will" and she did that by telling them the military was partnered w/ Theranos, even though she knew that the deal w/ the military "wasn't likely to get off the ground."

Defense counsel says the communications at issue is a PowerPoint presentation that Theranos gave to the military in 2012, but those representations have "nothing to do w/ the allegations" related to investor fraud.

The parties are also arguing over another communication w/ a lieutenant colonel. The judge says he doesn't know what the context is, so the doc may come in depending on testimony. It sounds like Daniel Edlin, an ex-senior project manager at Theranos, will take the stand today.

Judge Davila says he got an email from a juror who overslept so trial won't start until 9:30. "I presume he obeys all of the speed laws. Perhaps he was watching some terrible TV show last night."

Defense atty: Our condolences, your honor.

Judge: There is no joy in Mudville.

While we wait, here's the Casey at Bat poem that Judge Davila referenced this morning. poets.org/poem/casey-bat

And we're back! The jury is in the courtroom. Judge Davila is on the bench and ex-Theranos lab director Sunil Dhawan, who was Balwani's dermatologist when Theranos hired him as a consultant and lab director in 2014, is on the stand for cross.

Holmes' counsel Lance Wade points out that Dr. Lynette Sawyer signed Theranos' validation reports in early 2015 and appeared to be serving as Theranos' lab director. Dhawan says yes, "Based on signatures, that’s all I can tell you."

Wade tries to get Dhawan to acknowledge that the reason he wasn't asked to review Theranos' lab policies until Aug 2015 is b/c Dr. Sawyer was serving as its lab director. Dhawan replies "I was never made aware that she was doing that previously."

Holmes' counsel points out that as lab director Dhawan could delegate job duties to different full-time Theranos workers "b/c you can't be there everyday to perform these functions." He agrees.

Dhawan agrees he was relying on the work of others when he signed Theranos' validation reports as lab director in September 2015 and he had no reason to doubt the work. Wade also emphasizes that Balwani was his boss and was responsible for hiring and firing lab members.

Wade pulls up Balwani's Sept 9 2015 email in which Balwani asked Dhawan to attend Theranos' biennial lab audit. Balwani wrote the lab is "flawless and audit ready," "I don't anticipate any hiccups" and he would "personally walk you through all the latest updates w/ our team."

Dhawan said he understood Balwani's email to be saying that Balwani didn't anticipate any issues would come up during the lab inspection.

Wade asks Dhawan if he was told at the time of the lab inspection that reporters were making inquiries into CMS. "It was repeatedly said that they [ie. Theranos] were under scrutiny, that was basically my understanding," he replies.

Wade asks Dhawan if he was told when he was at Theranos that there is "a particular reporter who was on a crusade against the company." Dhawan replies "I didn’t hear that specific statement."

Wade asks if Dhawan heard a reporter claimed he wasn't legally qualified to serve as a lab director. Dhawan says "I don’t remember hearing about that."

Wade: Are you legally qualified to serve as lab director?

Dhawan: I have the degrees yes and meet the statutory requirements.

Wade wraps cross. Prosecutor is up for redirect and gets Dhawan to acknowledge that his lab in his private practice has only 2-3 people who he supervises, and Theranos' lab had "significantly" more employees.

Dhawan acknowledges that he speaks to his 2 employees at his private practice lab 6-8 times a day, because "I have to." Prosecutor asks if his lab does less complicated tests than Theranos' tests. "Yes," Dhawan says.

Dhawan acknowledges that it was unusual that a CFO (ie. Balwani) worked in the lab, and he says he didn't check the prior lab director's work. "I didn’t think I had to. My assumption was that people with such advanced degrees like mine were making accurate [representations]."

Dhawan says he never had the opportunity to inspect Theranos' blood-testing devices and he would not know if the lab wasn't following Theranos' SOP, (standard operating lab procedures).

Trial is taking a 30 min break, but after the jury left the courtroom, defense counsel tells the judge he's "deeply troubled" by prosecutors' q's that suggest the data wasn't accurate and there's some "underlying integrity issue w/ the data" when the data wasn't falsified.

Prosecutor Jeff Schenk says his q's about the data were trying to show that Dr. Dhawan never reviewed the data underlying the validations reports he signed, and he wasn't trying to show the data itself was falsified.

Wade notes that suggesting the data was falsified "has obvious prejudicial implications for our client" and he just wants to raise the issue so "we're all aware of it" and it doesn't come up w/ other witnesses. On a break now.

Judge Davila is on the bench. He says he received a note from a juror who said her mother-in-law just passed away and it was "sudden news." The juror may have to travel to the midwest, but she doesn't know details yet.

Judge Davila says while they're on the topic, he has a dear friend who hired him in his first job as a public defender and who is critically ill now.

Judge Davila says his friend "probably won’t make it much longer," and that may cause another break in the trial, b/c "if there is a memorial service I would like to attend." They're bringing in the jury now.

Prosecutors call to the stand Daniel Edlin, an ex-senior project manager at Theranos. He worked there from 2011 to 2016 and he 1st reported to Christian Holmes. He worked on the Walgreens partnership, marketing and he worked directly with Elizabeth on military and pharma cos.

Edlin says he was promoted in 2014 but he quit in 2016, about a year after @JohnCarreyrou's WSJ Theranos articles were first published. He says he wanted to go to business school, which he did, and "I no longer believed that the company was capable of standing behind [its tech]."

Edlin says when he was hired in September 2011 as senior project manager, four other college friends were hired for the same position as well, and a few years later two other college friends, including project manager Max Fosque were hired.

Edlin says over time he eventually began meeting with Holmes on a daily basis, and "She was in the office all the time really, from early morning until late in the evening" and on the weekends.

Edlin says Balwani and Holmes told him and other team members not to share information between teams and they should operate on a "need to know" basis. He says except for Holmes and Balwani, no one knew everything and everyone at Theranos was subject to the restriction.

Edlin says he didn't know in 2013 and 2014 that Theranos was using modified non-Theranos devices to do fingerstick bloodtests. He didn't learn that until 2016, he says.

Edlin says he conducted trainings for Walgreens staff who worked with Theranos' technology and he would give tours around Theranos and the R&D lab, but not the clinical lab. Tours required approval from Holmes and Balwani, he says.

Edlin says during the tour, visitors would be taken to a demo room w/ Theranos' minilab blood-testing devices that had touch screens and cartridges. He worked w/ Daniel Young to bring in the minilabs and then remove them after the demos. He thought they weren't used on patients.

Edlin says he would tell Theranos' engineering and lab team so they were "on notice" that a demo was scheduled. "VIPs" and potential investors were among the visitors who were given the demo, he says.

Feds point to an Aug 2013 email Edlin sent that they need to set up minilabs for a demo for executives. Plan A was to have the minilabs run "null protocols" and plan B was to "run CBCs."

Michael Craig replied to Edlin's email suggesting they use the "demo app" on the devices, which "shields protocol failures from the client." Edlin said, "Never a bad thing. Let’s go with demo, thanks." Trial is breaking for the day.

Trial recessed for the week with the judge noting that there "might be something precious called 'rain' this weekend." We'll be back here Tuesday morning. ✌️out.

Heading into the weekend, the jury considering criminal fraud charges against Elizabeth Holmes heard that on at least one occasion investors were shown blood-testing demos programmed to shield protocol failures. Here's my recap from today. law360.com/articles/14315…