Elizabeth Holmes trial likely delayed until 2021 because of Covid-19

Key Points
  • Lawyers for Elizabeth Holmes asked the judge to delay her criminal trial, citing health concerns.
  • Federal prosecutors plan to expand the scope of the case with a 2nd superseding indictment.
  • James Mattis, Henry Kissinger and Rupert Murdoch among possible witnesses who will be called to testify.
Theranos CEO Elizabeth Holmes speaking at the 2015 Clinton Global Initiative in New York on Sept. 29, 2015.
Adam Jeffery | CNBC

Elizabeth Holmes, whose company Theranos promised a revolutionary way to detect diseases, will likely have her criminal trial delayed until early 2021 due to a global pandemic with no cure in sight.

U.S. District Judge Edward Davila on Monday said "we're guided by the cloud of Covid" in thinking about pushing back the start of the trial, which was scheduled to begin in October.

The hearing played out via a Zoom call in which Holmes' attorneys and prosecutors argued over delaying the start of the trial.

"Proceeding in the midst of a pandemic comes with great risks," said Lance Wade, an attorney for Holmes. "We think a trial anytime soon is just not realistic, it's just not safe. If we're forced to do it we will do it, but it endangers people and we prefer not to."

However, prosecutors argued the government is ready to proceed as planned.

"From the government's perspective, we're ready to go and it's important to this case that it goes expeditiously", assistant U.S. Attorney Robert Leach said. "The fraud here is in the hundreds of millions of dollars."

Davila, who was hesitant about delaying the trial said "to take the foot off the gas pedal makes the finish line more obscured."

Theranos founder Elizabeth Holmes arrives for a pre-trial hearing
Theranos founder Elizabeth Holmes arrives for a pre-trial hearing

The judge set an August hearing to decide on an exact new trial date.

Prosecutors allege Holmes and her co-defendant, former Theranos President Sunny Balwani, knowingly deceived investors, business partners and doctors, despite promising they could run hundreds of lab tests with just a drop or two of blood.

Both Holmes and Balwani have denied the allegations and in filings call the government's case "unconstitutionally vague."

Theranos, once valued at over $9 billion, was one of Silicon Valley's unicorn startups. It attracted the backing of some of the leading venture capitalists and a string of high-profile people with deep pockets.

Prosecutors disclosed a witness list that identifies 170 individuals who live in 15 different states, including many that are Covid-19 hotspots. Sixteen of the witnesses are over the age of 65.

According to the list, former U.S. Secretary of Defense James Mattis and former U.S. Secretary of State Henry Kissinger could be called to testify in the high-profile trial. They both served on the board of the failed blood-testing startup.

Media titan Ruport Murdoch, whose company News Corp owns the Wall Street Journal, which first exposed Theranos' shortcomings and inaccuracies, is also on the list of witnesses.

The indictments were handed down two years ago. Last week, a twelfth felony fraud charge which the government added against Holmes in May, was dropped.

However, prosecutors filed a second superseding indictment on Friday against Holmes.