Theranos founder Elizabeth Holmes leaves the Robert F. Peckham Federal Building with her defense team in downtown San Jose, Calif., on Tuesday, May 4, 2021.
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Elizabeth Holmes, the embattled former CEO of blood-testing start-up Theranos, was dealt a major blow on Wednesday when a judge ruled that customer complaints and blood testing results can be used as evidence in her upcoming fraud trial.
Holmes’ lawyers have argued the customer complaints should be excluded from trial due to the failed preservation of a crucial database known as the Laboratory Information System that contained three years’ worth of accuracy and failure rates of Theranos blood tests.
“The potential usefulness of the LIS database is speculative, and no exculpatory value was apparent at the time Theranos decommissioned the LIS database,” U.S. District Court Judge Edward Davila said in his ruling Wednesday.
Holmes has claimed that her defense is hampered by the loss of millions of blood-test results in the database.
However, the judge ruled there’s no evidence to prove “that the LIS database contains accuracy data for all tests run,” adding “no conclusions regarding accuracy could be drawn from the LIS data alone, suggesting that the database would not provide a fulsome record with which accuracy could be definitively determined.”
Holmes’ defense team and the U.S. attorney’s office have spent months finger-pointing over who is to blame for the missing LIS database.
Prosecutors say Holmes and her executives purposely dismantled the database and handed investigators a useless duplicate after a federal grand jury subpoenaed it in 2018.
But Holmes blames prosecutors, calling the missing database an “investigative failure,” adding in an earlier filing with the court that “the reason that the government has built its case on this teetering card house of irrelevant evidence is that it lost — or, worse, did not want to analyze pre-indictment — the actual evidence of testing results in this case.”
The judge’s ruling also rejected Holmes’ request to exclude findings from the Centers for Medicare & Medicaid Services that proved to be damaging to the company.
Holmes was once a Silicon Valley darling, raising over $700 million from powerful venture capitalists over the course of a decade for Theranos. She claimed Theranos would revolutionize the blood-testing industry with technology that could run hundreds of tests with just a drop or two of blood.
Holmes is facing a dozen wire fraud and conspiracy to commit wire fraud charges along with her COO, Ramesh “Sunny” Balwani. Both have denied any wrongdoing and have pled not guilty.
Attorneys for Holmes did not immediately respond for CNBC’s request for comment.