Elizabeth Holmes admits patient lab at Theranos altered lab reports

#DeleteUber founder says patients at centres located in California were warned of fraudulent documents

The founder of Uber and founder of Theranos, the fabled healthcare company, admitted that the lab she controlled altered lab reports to make certain drug samples look “more favorable”, adding it was part of a pattern to help the company win awards and raise money, according to a federal court filing.

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Elizabeth Holmes, in a plea deal with US prosecutors, said she was the lone person controlling the lab, Patient Diagnostics, and amended its records without permission. The misreporting occurred for the “largest part” of her tenure as the company’s CEO, Holmes wrote.

Holmes is scheduled to appear in a federal court in San Francisco on Wednesday to address a civil lawsuit filed by the Federal Trade Commission (FTC), which has accused Theranos of misleading the public about its technology and the accuracy of its blood tests.

Theranos said in a statement that the reporting was “of a long-standing nature and was not done intentionally” and said the company was conducting a “thorough internal review”. The company is aiming to be “fully FDA compliant” by the end of the year, spokeswoman Eryn Brown said.

During her court appearance on Tuesday, the CEO did not enter a plea to charges of wire fraud related to Theranos’s inaccurate blood tests and failed tests conducted at Patient Diagnostics, according to the US justice department.

Theranos has unraveled amid investigations and allegations of fraud, sparking US lawmakers to call for the resignation of company leadership. The startup started in 2003 as a mobile lab tests provider with proprietary technology that could use only its own proprietary blood samples. The company denied making false statements about its products and programs.

Prosecutors had to prove to a jury beyond a reasonable doubt that Theranos had intentionally made false statements to the public and to defraud its patients and investors, according to court documents.

The settlement is with the US attorney’s office in California rather than the federal government because the company did not file an admission of wrongdoing.

The plea agreement means that between Theranos and federal prosecutors, charges will not be filed in federal court, prosecutors said.

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Theranos says it will pay $4.6m as part of the settlement, but avoids additional sanctions. If Holmes fails to comply with the terms of the agreement for three years, the US attorney’s office can reinstate the two indictments against her.

In addition to paying $4.6m, Holmes forfeits the right to more than $105m of Theranos’s assets. Theranos’s board also agreed to name a compliance officer and has voted to expel Holmes from the company’s board.

Theranos shares, which were previously delisted from the New York Stock Exchange, fell 1.4% on Tuesday to $1.12.

“Today’s swift and decisive action reflects the ongoing determination of the United States attorney’s office to bring justice to victims of unlawful acts,” Thomas O’Brien, special agent in charge of the FBI’s San Francisco field office, said in a statement.

• Additional reporting by Javier Blas

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