Didn’t know full Theranos picture, former defense secretary testifies

SAN JOSE, Calif. — Former Defense Secretary Jim Mattis took the stand Wednesday in the fraud trial of entrepreneur Elizabeth Holmes, saying he was under the impression for years that Theranos was capable of running thousands of tests on its own devices.

Mattis said he would have had a different view of the company if he had known some limitations of the Theranos blood testing device, including that it could run only about a dozen tests on its own system, could process only a certain type of blood test and was relying heavily on third party machines, as prosecutors have alleged.

“It would have tempered my enthusiasm significantly,” he said in response to prosecutor’s questions about the use of third party devices Wednesday. Mattis served on the company’s board from the summer of 2013 to the fall of 2016.

Mattis’s testimony is key to the prosecution’s case in one of the most closely watched corporate fraud trials in years. Holmes, the former chief executive officer of blood testing start-up Theranos, is charged with 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. Government prosecutors have alleged that she misled investors and patients about the capabilities of her company’s blood testing devices.

Holmes formed Theranos when she was a 19-year-old Stanford student in 2003 and expanded it to a company with hundreds of employees over the next 15 years. But the company collapsed in 2018 after media and regulatory investigations cast doubt on its ability to run multiple tests from a few drops of blood drawn from the fingertip.

Holmes has pleaded innocent. She faces up to 20 years in prison and up to a $3 million fine if she is convicted.

Mattis said earlier that he met Holmes in roughly 2011 and began discussing how the military could use the technology, according to a report in the Wall Street Journal. He later invested $85,000 of his own money in the company, an amount he said was significant to him.

He said during testimony Wednesday afternoon that he served on the company’s board, saying he was working to offer help and guidance to Holmes. To his knowledge, Theranos’s technology was never used by the military.