Judge drops some fraud charges against Theranos founder

Ex-Theranos CEO Elizabeth Holmes' scored an early victory in her blood feud with federal prosecutors following a judge's dismissal of four criminal counts of fraud against her.

U.S. District Judge Edward J. Davila on Tuesday partially granted a motion to dismiss brought by Holmes and former Theranos president Ramesh "Sunny" Balwani, narrowing the claims in the government's superseding indictment.

In June 2018, the U.S. Department of Justice charged Holmes and Balwani with nine counts of wire fraud and two counts of conspiracy to commit wire fraud in connection with allegedly deceptive misrepresentations about the health care and life sciences company.

Prosecutors claimed the pair collaborated in two separate criminal schemes -- one to defraud investors and another to defraud patients and doctors -- involving a supposedly innovative method for drawing and testing blood. Elizabeth A. Holmes and Ramesh Balwani, 18-cr-00258 (N.D. Cal., filed June 14, 2018).

Arguing in the Northern District of California on Monday, defense counsel Kevin M Downey of Williams of Connolly LLP asked Davila to dismiss the case in its entirety, reasoning prosecutors hadn't shown sufficient evidence to pass constitutional muster. Davila agreed to narrow the claims but only in relation to the alleged investor fraud, preserving claims brought over doctor and patient fraud in full. He declined to dismiss the case.

Holmes became a subject of initially favorable media attention after founding Theranos in 2003 at 19. But the public spotlight soured in 2015, following investigations by the Wall Street Journal and others into the company's allegedly deceptive practices.

-- Steven Crighton