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The judge overseeing a criminal trial against Theranos Inc. founder Elizabeth Holmes and a former top executive at the company narrowed the scope of the charges by ruling that prosecutors can’t argue that doctors and insured patients were defrauded.
In 2018, prosecutors indicted Holmes and Ramesh “Sunny” Balwani, the former president at Theranos, after a series of articles published by The Wall Street Journal that raised questions about the company’s blood-testing technology. The company moved that year to dissolve.
The Justice Department argued that Holmes and Balwani conspired to defraud investors, as well as doctors and patients, by making false claims about the accuracy and reliability of Theranos’s technology from 2013 to 2016. Holmes and Balwani have pleaded not guilty.
In a ruling Tuesday, U.S. District Judge Edward Davila said he would dismiss any counts that accused Holmes and Balwani of defrauding doctors or nonpaying patients, such as those who were covered by insurance. The judge ruled the 11-count indictment didn’t show that the defendants intended to obtain money from the nonpaying patients, or that the doctors were victims of the fraud. The practical effect of the judge’s decision wasn’t immediately clear, because prosecutors haven’t publicly said how many victims were paying or nonpaying patients.
An expanded version of this report appears on WSJ.com.
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