The ex-Theranos employee who blew the whistle on fraud at the blood-testing company where his grandfather — former Secretary of State George Shultz — was a board member says he popped a bottle of Champagne when he heard of Elizabeth Holmes’ conviction.
Tyler Shultz said he felt vindicated after a jury hearing the federal case against Holmes in San Jose deliberated for three days and returned guilty verdicts on four counts of fraud on Monday.
“All of a sudden, it was just a weight was lifted,” Shultz told National Public Radio when asked about his reaction to the guilty verdicts. “It’s over. I can’t believe it’s over.”
He said he then decided it was time to uncork some bubbly with loved ones.
“My family said, ‘Come on down — we’re popping Champagne. We’re celebrating,’” he said.
Holmes and her company were accused of defrauding investors, doctors and patients by falsely claiming their product could conduct at-home blood testing using a finger prick and a technological device that would scan the blood.
Holmes, 37, was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. The jury said it could not reach a unanimous decision on three other fraud charges.
Holmes, who cultivated a reputation as a rising star in the world of tech and who drew comparisons to pioneers like Steve Jobs, faces up to 20 years in prison for each of the four charges on which she was convicted, though it’s likely she will serve less time, legal watchers have said.
Shultz, the grandson of the late former secretary of state and Theranos board member, joined Theranos as an intern in 2011 after studying biology at Stanford University.
He was enthralled with the idea of working for Holmes, who sold him on a new technology that could allow people to do blood tests at home using a finger prick and a device she invented called “Edison.”
“She instantly sucked me into her vision, and I asked her, ‘Is there any way I can come work at Theranos as an intern after my junior year?” he told NPR.
At the age of 22, Shultz was eventually hired as a full-time staffer, but he quit just eight months later after he realized that the company’s claims about the Edison did stand up to scrutiny. “There is nothing that the Edison could do that I couldn’t do with a pipette in my own hand,” he said.
Shultz said he and other employees at the company realized that it was misrepresenting the blood tests. “It was clear that there was an open secret within Theranos that this technology simply didn’t exist,” Shultz said.
Using an alias, he alerted the New York State Department of Health that something was amiss.
Shultz and two other company whistleblowers, Adam Rosendorff and Erika Cheung, also spoke to Wall Street Journal reporter John Carreyrou about what they knew.
Shultz said his late grandfather didn’t believe him when he told him that the company’s claims were bogus. “He said Elizabeth has assured me that they go above and beyond all regulatory standards,” Tyler recalled. “‘I think you’re wrong’ is what he told me.”
George Shultz, who was Ronald Reagan’s top diplomat, recruited other luminaries like Henry Kissinger, former Defense Secretary William Perry and former Sen. Sam Nunn, to the company board.
Tyler Shultz said he tried to salvage his grandfather’s reputation by persuading him that the company’s claims were fraudulent, but to no avail.
“I said, ‘I know you brought all your friends into this, and you feel like you need to stay there to protect your friends, but there’s still an opportunity for you to get them out, too,’” Tyler said. “‘You can lead the way for the board to do the right thing and hold Elizabeth accountable.’”
George Shultz died in February of last year.
Tyler Shultz said that after he emerged as a whistleblower, Holmes hired private investigators to follow him. He also claimed that Holmes’ lawyers tried to intimidate him.
Shultz said he showed up to watch closing arguments, though he mostly kept tabs on the trial from his San Francisco apartment using social media.
Today, Shultz runs his own biotech startup focusing on women’s fertility issues.