SAN JOSE, Calif. (KRON) — Two whistleblowers who helped blow the cover off Theranos’ secretive blood lab and expose Elizabeth Holmes of fraud were recent college graduates who wanted to do the right thing.
Tyler Shultz and Erika Cheung were low on Theranos’ totem pole, working as entry-level lab techs.
Holmes was their famous boss. The CEO had achieved fame, wealth, and adoration in 2014 by claiming she had technology that could save patients lives through revolutionary blood testing. Holmes graced the cover of Fortune Magazine for a story about her remarkable accomplishments, and her goal was to become the next Steve Jobs of Silicon Valley.
Shultz was just 22-years-old. Cheung’s first job after graduating from UC Berkeley was working for Theranos in Palo Alto.
They both joined Holmes’ biotech company because they admired her quest to help patients have access to cheaper, more accessible, and more accurate blood testing using microtechnology.
But as they worked in the lab, Shultz and Cheung came to the same disturbing realization: Theranos’ blood testing machines were severely flawed.
When they told Theranos executives that the lab’s blood testing machines were not producing accurate results, their concerns fell on deaf ears, according to witnesses who testified at Holmes’ criminal fraud trial.
On April 11, 2014, Shultz emailed Holmes to tell her that Theranos had doctored research and ignored quality-control checks. Holmes forwarded the email to Theranos COO Sunny Balwani, who wrote a scathing reply belittling Shultz’s knowledge of mathematics and science.
“The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson,” Balwani wrote.
Shultz’s grandfather, George Shultz, was a former U.S. secretary of state and Theranos board member. Even his own grandfather told him, you’re wrong.
“He didn’t believe me. He said Elizabeth has assured me that they go above and beyond all regulatory standards,” Tyler Shultz told NPR Wednesday.
“It would have been easier to quietly quit and move on with my life,” Shultz told NPR.
When Tyler Shultz and Cheung left Theranos, Holmes hired one of the most high-powered attorneys in America, David Boies, to go after them with defamation lawsuits that accused them of leaking trade secrets. Neither had much money saved up, and they wondered how they could possible afford to hire an attorney for their own legal defenses.
Holmes also hired private investigators to follow her former employees, she admitted to prosecutors.
Instead of backing down and staying silent, Cheung and Tyler Shultz began speaking with an investigative Wall Street Journal reporter, John Carreyrou, who was working on a story about Theranos’ flawed technology.
Holmes exchanged text messages with Ramesh “Sunny” Balwani, her then-boyfriend and Theranos COO, while they were trying to figure out who was leaking information to the WSJ.
Texts illuminating Holmes’ intentions were read to the jury during her fraud trial.
In addition to going to the press, Tyler Shultz and Cheung also wrote letters to state regulators, detailing major problems they witnessed in Theranos’ blood lab.
Cheung said she was “terrified,” but she sent her letter to state regulators anyway, because she knew what was happening at Theranos was wrong. Patients were suffering major health scares from false blood test results, including a pregnant woman who was told she suffered a miscarriage.
In a Ted Talk titled, “Speaking Truth to Power,” Cheung said, “Despite all that emotion and all that volatility, I still did it. And luckily it triggered an investigation that shone to light that there were huge deficiencies in the lab and stopped Theranos from processing patient samples.”
“Fraud is not a trade secret,” Shultz told the Wall Street Journal.
Earlier this week, a jury convicted Holmes on four counts of fraud and conspiracy. Her face was stoic and her body was motionless as she sat next to her defense attorneys. Holmes left the courthouse in San Jose surrounded by a swarm of media cameras.
She did not answer any questions from reporters.
Hours after the jury’s verdict was announced, Tyler Shultz tweeted, “This has been a long chapter of my life. I am happy that justice has been served and that this saga is finally in my rearview mirror.”
“Proud of the impact that Erika and I had. Hope to inspire other young professionals to hold their leaders accountable,” Tyler Shultz tweeted.
Cheung did not make a public statement following the verdict. She had already said what she needed to say at Holmes’ trial.
She was one of the first witnesses federal prosecutors brought into the courtroom to testify against Holmes during a 3-month-long trial.
Holmes is now facing up to 20 years in prison.