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Elizabeth Holmes’ Attorneys Claim Prosecutors Failed to Preserve the ‘Most Critical Exculpatory Evidence’ in Fraud Case Against Theranos Founder


Theranos Elizabeth HolmesDuring a contentious hearing on Wednesday spanning more than two hours, attorneys representing Elizabeth Holmes accused prosecutors of failing to preserve a key company database that would have provided the “most critical exculpatory evidence in the case” against the embattled Theranos founder.

Vehemently disagreeing, prosecutors contended that the company promptly “destroyed” the server that housed the database after delivering the government an inaccessibly encrypted copy of the information, which they said would have only damaged Holmes’s case.

The videoconference hearing before U.S. District Judge Edward J. Davila of the Northern District of California on Wednesday centered on the missing Theranos Laboratory Information System (LIS) database. The database, which is now irretrievable, was said to have contained millions of records pertaining to Theranos patients and tests results, but the parties fundamentally disagree about whether the recovery of those records would help or hurt Holmes’s case.

Holmes’s attorneys conceded that Theranos initially gave the government a copy of the database that was double-encrypted and failed to provide the key required to unlock the information. However, they alleged that if the government had acted reasonably and taken steps to rectify the problem, the database could have been recovered.

They also argued that because of the database’s inaccessibility, Holmes will be “unfairly prejudiced” if the government is allowed to present individual customer complaints and testing results.

“The lack of access to the LIS is prejudicial to individual test results as there is a significant amount of information that can be learned about individual results from the database and what might’ve caused inaccurate test results and take that multitude of information and put it into context,” Holmes’s attorney Amy Saharia said. “How many of the results were out of whack? How many errors are in database? It’s not speculative to say there’s exculpatory value to that information. There are many many millions of test results, which is highly exculpatory.”

Saharia also characterized prosecutors’ “lack of interest” in reviewing the “critical evidence” as particularly damaging, saying they made little effort to try and recover the information from the initial copy of the LIS and failed to contact Theranos about the faulty encryption for approximately a year and a half, well after the information could have been recovered.

Assistant U.S. Attorney John Bostic contended that if Holmes knew the database contained such exculpatory evidence, then she would not have allowed Theranos executives to destroy the server it was housed on only four days after the inaccessible copy was provided to the government. In previous court filings, prosecutors claimed that the information on the LIS would “dramatically support the government’s claim” that the company was engaged in fraud.

He also said Holmes’s argument concerning the government’s effort to preserve the “critical evidence” on the LIS made no sense because the same evidence was produced to her legal team who also couldn’t recover the information with the encryption key.

“I’m confused to hear about the government’s lack of effort to access that information. If that information were accessible, we wouldn’t be in this situation because the Defendant would’ve gone through the steps it’s saying the government should have went through,” Bostic contended. “The Defendant’s failure to do so proves that the copy itself was not a viable option. It’s moot. No matter what effort was expended, the copy of the database delivered to the government was not accessible without second encryption key for which there is no trace.”

[image via Glenn Chapman/Getty Images]

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Jerry Lambe is a journalist at Law&Crime. He is a graduate of Georgetown University and New York Law School and previously worked in financial securities compliance and Civil Rights employment law.