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Ex-Theranos manager tells of unrelenting pressure from Holmes

Joel Rosenblatt, Bloomberg News on

Published in Business News

On her way out the door when she quit working at Theranos Inc., Surekha Gangakhedkar says she printed and took company documents “to protect myself” — because she suspected a pending launch of the company’s blood-testing machines in Walgreens stores would end badly.

“I was actually scared that things would not go well,” Gangakhedkar said in federal court in San Jose, California. She took the documents, she explained, in case “any issues came up.”

It was a prescient move. Eight years later, Gangakhedkar was testifying Friday at the criminal trial of her former boss, Elizabeth Holmes, the founder and former chief executive officer of Theranos.

It was by far the strongest testimony so far connecting Holmes’ actions to charges that she lied to patients and investors about the potential and accuracy of Theranos blood-testing machines. She has pleaded not guilty but faces as long as 20 years in prison if convicted.

Gangakhedkar was apparently worried about Theranos’ criminal liability as far back as 2013, said James Melendres, a former prosecutor turned criminal defense lawyer at Snell & Wilmer.

“Given her proximity and access to Holmes, she can provide a first-hand account tying Holmes to the alleged fraud,” he said. “The fact she was willing to resign and give up her livelihood because of her concerns about Holmes’s conduct will give the testimony added weight.”

 

As a manager of assay systems at Theranos, Gangakhedkar reported directly to Holmes, meeting with the CEO multiple times a week. Gangakhedkar, who worked at the company for eight years, testified that she made Holmes fully aware of serious failings of Theranos machines — claims that were backed up Friday by emails displayed for jurors.

Gangakhedkar said she felt increasing pressure to approve Theranos blood tests leading up to the Walgreens launch.

“Where was the pressure coming from?” Assistant U.S. Attorney Bob Leach asked her. “From Ms. Holmes,” Gangakhedkar said.

Walgreens sued Theranos in 2016 after it closed about 40 of the company’s blood-testing sites in Arizona. The suit was settled.

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