Theranos founder Elizabeth Holmes is trying to block federal prosecutors from using a group of documents against her, as her criminal fraud case heads toward a spring trial date.
The 13 documents in question were given by Theranos to the Securities and Exchange Commission while the commission was investigating the company, and contain communications with a law firm, according to a filing by prosecutors Friday in U.S. District Court in San Jose.
Holmes, the former CEO of the defunct Palo Alto blood-testing startup, claims the documents can’t be introduced as evidence because they represent confidential correspondence between the law firm and herself that is protected from disclosure under the legal principle of attorney-client privilege, the filing said.
“Holmes has made it clear that she intends to assert broad, individual privilege claims over certain documents and information in this case, including 13 of the documents identified on the government’s exhibit list,” according to the filing. “The burden falls on Holmes to prove that her claimed privilege is valid.”
For attorney-client privilege to apply, the documents would have to represent personal matters between Holmes and the law firm, but “the communications in question related to corporate matters,” prosecutors argued. “It would have been strange indeed for Holmes to expressly ask for personal legal advice on matters of corporate interest as opposed to seeking such guidance in her capacity as chief executive of the company.”
Holmes’ lawyer Lance Wade has demanded that the government remove the documents from its list of exhibits to be introduced as evidence in the trial, scheduled to start in March. “The inclusion of such documents on the government’s exhibit list … suggests a blatant disregard for both government counsel’s obligations … and the safeguards of the privilege and work-product protections that Ms. Holmes and Theranos enjoy under applicable law,” Wade said in a July 30 letter to prosecutors, filed by the prosecution.
“The government’s continued use of such material … raises issues of fundamental fairness and due process because it places Ms. Holmes at a significant disadvantage as she prepares her defense in this case.”
In a Sept. 22 letter to prosecutors, Wade asserted that the law firm, Boies Schiller Flexner, had represented Holmes personally.
Holmes, a Stanford University dropout, and former Theranos president Sunny Balwani, are charged with a dozen felony fraud counts. They’re accused of bilking investors out of hundreds of millions of dollars, and defrauding doctors and patients, with false claims that the company’s machines could conduct a full range of tests using just a few drops of blood. The two have denied the allegations, with lawyers for Holmes arguing in a court filing that the government’s case was “unconstitutionally vague” and lacked specific claims of misrepresentation.
In a March 2018 settlement with the Securities and Exchange Commission, Holmes agreed to pay a $500,000 fine, but did not admit to the SEC’s allegation that she had misled investors.