Thread by @MilesGCohen

#ElizabethHolmes Trial Day 31:

The prosecution said they would rest this week, and the crowds showed up accordingly.

Fortune's Roger Parloff will be back on the stand

If they put on a case — the defense disclosed to the prosecution their first witness will be a paralegal from their firm.

They also told the government they plan to call a 2nd witness: Theranos board member Dr. Fabrizio Bonanni.

The gov't moved to exclude Bonanni's testimony.

The defense is arguing the relevance of Dr. Bonanni's testimony, who they said joined #Theranos in March 2016.

Bonanni will speak to the capabilities of the Minilab, which they pointed out rebuts an allegation the government made in the indictment, they told the judge.

The allegation under 12 A of the indictment:

That Holmes knowingly made false statements asserting the capabilities of theranos technology.

Dr Bonanni will testify to “actions of someone who genuinely believes in her technology,” Defense attorney Amy Mason Saharia told Judge Edward J. Davila.

The judge indicated he is concerned about the defense's late disclosure of certain exhibits they plan to show with Bonanni.

Prosecutor Jeff Schenk said some were sent over at 10 p.m. last night.

The defense said they would concede to an adjournment for the gov to review the exhibits.

Davila pushed back, suggesting they instead put on another witness.

"The government should not be able to determine the order in which the defense [calls]witnesses," Trefz argued.

The judge said, to some extent, he gets to make that determination. But told the lawyers he does not want to interfere with either of their cases.

He did not rule on the second witness Bonanni.

The jury filed in. We are waiting for Parloff.

The judge just told the jury the case may run past Dec. 6

Cline is back on for cross. He begins by asking if Parloff and Holmes had an agreement for the journalist not to include anything in his article related to the military.

Parloff agrees, but clarifies he meant with respect to "actionable deployments."

The language Parloff did use indicated it was "possible to one day do these things," as Cline asked.

The witness agreed.

Cline then questioned Parloff on his recollection of what Holmes said about deployment of her tech to Afghanistan.

He used the word "impression" several times in his questions.

"AT SOME POINT SHE DID SAY THAT, AND I WAS NOT SUPPOSED TO USE THIS IN THE PIECE, IT WAS VERY SENSITIVE, THAT IT HAD BEEN USED IN THE MILITARY -- BY THE MILITARY IN AFGHANISTAN," Parloff told prosecutors yesterday.

In earlier meetings with the gov, Cline elicited Parloff told the government he had the "impression."

"She never actually told you that there was use in Afghanistan," Cline asked.

"I thought she did," Parloff replied.

Cline is wrapping up his cross by listing all of the dates Parloff talked w/ Holmes.

Meetings took place from April 7, 2014 to June 2, 2014, in addition to emails Cline elicited.

Prosecutor John Bostic is on for redirect.

"When you recorded convos with Ms. Holmes did you make a point that she knew that recording was placed"

"yes"

"did that happen each time"

"yes"

Parloff is excused.

Count 9 of the third superseding indictment is dismissed, as the patient associated with the count was excluded from testifying.

"The United States rests," Prosecutor Jeff Schenk told the court.

#ElizabethHolmes #Theranos

The defense will move for an acquittal under rule 29, Defense attorney Amy Mason Saharia told Judge Davila.

(The jury is out of the room)

They are also moving to strike portions of the CMS Jan 2016 cover letter — exhibit 4162A — citing rule 403.

Defense cites that the gov never called a CMS witness, rather admitted the cover letter with a Theranos employee.

The defense moved to strike the testimony of Erin Tompkins, the patient who received a purportedly inaccurate HIV test.

Prosecutors did not call Tompkins' doctor who would have been "a person qualified to offer that opinion to the jury," Saharia told Davila.

"The testimony of Ms. Tompkins should remain in the record," Prosecutor Bostic argued.

"This [patient] was qualified to talk about her experience w/ the theranos test, and present to the jury about the results she obtained," Bostic argued.

"The testimony of Ms. Tompkins is admissable, and the count that is based on her wire is still a valid count, even if that test result was not inaccurate," Bostic continued.

"This was a wire in furtherance to defraud patients."

"I don't think it's proper to bring in her testimony about the test results themselves," Saharia argued, saying the jury is just as unqualified as Tompkins is.

Bostic admits the test results do not say the patient had HIV.

“Ms. Holmes respectfully moves for a motion for acquittal," Defense attorney Amy Mason Saharia told the judge.

The evidence in the record is "insufficient for every element on every count."

We are breaking and when we get back the defense will call their first witness: Trent Middleton, a paralegal from their firm.

Judge is back on the bench. Parties are at the podiums.

Prosecutor Robert Leach has an objection to a potential defense exhibit. Defense Attorney Katie Trefz is up to rebut.

The exhibit is a summary chart of patents,"relevant to [#ElizabethHolmes] good [faith] belief that her technology worked," Trefz said.

Holmes had certain understandings about the tech that were "inconsistent with the reality," Trefz continued.

"I don't know what the value of this is," the judge told Trefz, but will allow the a summary chart of patents in from 2016.

The summary witness will take an hour or less on direct.

"I aspire to be shorter than the direct...and significantly shorter than that," Prosecutor Robert Leach said.

After several weeks — we get another update on the Media Coalition's motion to unseal juror questionnaires.

Davila will give his ruling by the end of the court day.

"I don’t think you’ll be disappointed,” he hinted to Downey, who had asked for a ruling now as opposed to later

"The defense calls Trent Middleton"

Defense attorney Katie Trefz will conduct the direct.

Middleton is a paralegal at Williams & Connolly, the law firm representing #ElizabethHolmes.

He's worked there for 12 years.

He has never worked directly with any of the lawyers on the team, he testified.

Middleton reviewed “voluminous” documents, "easily 1000s of pages," he said.

He created summary exhibits, including:

1. U.S patents assigned to Theranos - reviewed patents for date issued, date applied for, accounting for the inventor/the assignee and a description.

2. Customer receipts 1/17/11-1/12/14

"Column -- Week --- Customer Receipts"

Trefz had Middleton read this number out loud, the sum of the customer receipts: $217,817,591

3. Option Stock Proceeds

$58.6 million — 2013's total option stock proceeds

Another chart titled "Entities that invested in #Theranos"

(Table of the investments, not investors in Theranos)

Series-A: 49
Series-B: 71
Series-C: 109
Series-C-1: 23
Series-C-2: 23
Total: 275

DX- 10689

"Summary charts depicting the total number of tests offered, breaking them down in price buckets," Middleton testified.

Prosecution objected to the relevance of the chart.

Judge lets the first page in, but excludes the rest.

Tests offered: 269
Reflex tests: 23

"How many tests were offered by theranos?" Trefz asked

"A grand total of 269 tests on the testing menu," Middleton said.

She asked what reflex tests are, and pointed out one from an exhibit already in evidence that cost $7.69.

Customer Test Results Summary -- Dr. Asin

(Patient Erin Tompkin's doctor)

Theranos customers: 233
Customers multiple visits: 110
Total number of visits: 490
Total number tests ordered: 1,969

"This Summarizes the total number of visits made as listed in the order form. The HCG tests ordered, as ell as the unique number of providers that had ordered Theranos tests," Middleton said

SWCWC - Post Aug. 2015

Visits: Over 1100
hCG tests ordered: over 270
Providers: Over 20

Trefz finished her direct, Leach is on for cross.

Leach elicits:

Williams & Connolly is from DC

That attorneys for holmes have some say in hiring or firing Middleton.

It's his first time testifying.

He met with Wade and Trefz 4 times this week for an hour, otherwise doesn't know them

Holmes has >5 attorneys

"I've made many a binder," Middleton testified, to some jury laughs.

Middleton is dismissed.

The defense called former Theranos board member Dr. Fabrizio Bonanni to the stand.

Bonanni has served on the boards of various biotech companies, Trefz elicited.

Exhibit 10312: The "curriculum [vitae]" which Bonanni provided #ElizabethHolmes.

it's accurate as of April 2016, he testified.

Bonanni said he was aware of some regulatory compliance issues, originating from articles in newspapers, he said.

"We had discussions about what the vision was about the deployment of the technology...," Bonanni testified, about his initial meeting at Theranos, in which he had "several hours" of interactions with Holmes

She offered him a role as a COO.

"I said I was too old for that."

But Bonanni took a position on the board of directors. He was not paid, Trefz elicited.

Bonanni never met Sunny Balwani but he knew he was the previous COO, he testified.

He knew he was leaving, or had left the company.

He was also aware of the regulatory issues, Theranos was facing.

Trefz is showing demonstrative slides, with the theranos watermark in the lower right side.

Bonanni is explaining what we are seeing.

"Theranos Sample Processing Unit (miniLab)" is one, and we see a machine and its parts, which Bonanni came to know in 2016.

“There was a robot inside [the device] that performs a number of mixings and reactions. There was an illuminator…," Bonanni explained, as he did with many of the 11 or so parts (insides of the miniLab) which we see surrounding the single black device in the middle.

"Were there components that would allow the miniLab to perform clinical chemistry labs?" Trefz asked.

(scientific explanation - I missed, but sounded like agreement)

We're back from break - now watching a video of a white device with a touch screen.

Someone feeds a cartridge into the device.

"This technology has not been cleared or approved by the FDA and is not for sale in the United States," reads a disclaimer burned into the bottom.

Another demonstrative published to the jury.

The inside of the miniLab (components intact, but top and sides off)

Same disclaimer.

Another video

"Behind the cartridges we see the miniature centrifuge, over it is the material handling robot that you will see in action," Bonanni tells the jury

Trefz hits play:

"The robot is picking up the slide that the robot will take to the...," he began his explanation

"During your time on your board of directors did you ever come to understand the potential commercial uses the company was developing for the tech?" Trefz asked Bonanni.

The defense attorney has tried 3-4 times to get a version of that question in.

Objection - sustained.

Trefz asked Bonanni to describe what board meetings were like at "a high level"

"Was Ms. Holmes the only speaker in the meetings?" she asked

"No," Bonanni said.

"Was there spirited discussion...?" she asked.

"Lively discussions," he said.

Mattis was a mentor to holmes, among other, Bonanni testified.

Bonanni testified his understanding of why Mattis stepped down from the board in 2015 was because, "It was part of his getting prepared for confirmation hearings in the senate."

Paraphrased line on Mattis:

Did General mattis later ever tell Bonani he left theranos over concerns re integrity

No

Over concerns holmes misrepresented capabilities of the tech

No.

Over concerns holmes misrepresented to him what tech was in the clinical lab

No.

Bonanni also testified none of the board members who predated him ever told him they left b/c of tech capabilities.

"A number of [board] directors were convinced that the company should counter allegations in the press," Bonanni testified.

His view, was that the company should instead seek validation from the FDA and other regulatory agencies

That's the path Theranos chose, Bonanni said.

Trefz asked Bonanni to explain Holmes' strengths as a CEO, as he came to know.

"Her vision for the company, her technology savvy and mastering of all aspects that related to the system of tech that had been developed," he began.

"The amount of energy, enthusiasm, drive that she had to bring this complicated thing forward," he continued.

"I admired her lack of defensiveness and her willingness to listen to other peoples opinions."

To the latter Trefz asked Bonanni to explain why:

"When people have a strong ownership over things they have done…they tend to listen and say 'yes but,' and defend their past doing, and I never had a 'but' from Elizabeth Holmes," Bonanni said. "She was diligent in listening, and internalizing [advice] she received."

"Would you have worked at #theranos if you had not believed the tech was sound?" Trefz asked.

Objection - sustained

"no further questions," trefz said.

AUSA Jeff Schenk is on for cross.

Schenk began by clarifying that Bonanni didn't have personal knowledge of the lack of concerns Mattis testified to on direct, just that the general didn't take them to Bonanni.

"I want to be very clear about that," he punctuated.

He then elicited that the device we saw on direct was the miniLab 4.2 — a device never used to test patients blood commercially.

“I have really no knowledge of an Edison Device,” Bonanni told Schenk.

He also did not know that the company voided all of its Edison test results.

“Isn’t it a big fact, of what’s hidden from you, that they voided all of those Edison tests? How doesn’t that change your view?”

Schenk asked.

“I don’t know what to say,” Bonanni said after a long pause.

(Bonanni said earlier, he didn't feel comfortable talking about Edison b/c he didn't know anything about it -- and that knowing about the voided tests didn't change his direct testimony)

"In 2016 you would not have made a statement about a device deployed to a battlefield in Afghanistan, you never would have made that statement?" Schenk asked.

"No."

And to finish his line:


“You don’t know what [Holmes] said to get Alan Eisenman to invest 100k?

"... Chris Lucas to invest XX"

"...Bryan Tolbert to invest about 4.8 million

....