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 Wallgreens (Holmes’ Criminal Fraud Trial Update #10) 

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Walgreens CFO Wade Miquelon tells the jury that Elizabeth Holmes misled them about its blood-testing technology and cost them over $140 million.



We continue to learn about the federal criminal justice system through the developments in the white-collar fraud trial of Elizabeth Holmes. Holmes faces federal charges for defrauding patients and investors with lies about her revolutionary blood-testing technology.

*Pro-Tip: Remember to consult legal counsel for legal advice regarding any court case. Prison Professors, an Earning Freedom company, regularly helps clients locate and vet experienced white-collar defense counsel. We work alongside, not in place of defense counsel to help clients obtain better outcomes.

The prosecution continues to parade witnesses before the jury to establish that Holmes knowingly made numerous misrepresentations to the public, investors, business partners, doctors, and patients. 

For its part, the defense continues to forcefully cross-examine each and every witness, as is every criminal defendant’s constitutional right under the Sixth Amendment. 

One leading strategy the defense continues to use when possible is to distance Holmes from direct involvement in the day-to-day operations of Theranos’ labs. As the evidence mounts that Holmes was in fact in charge of all things Theranos at all relevant times, this task is becoming increasingly more challenging.


In 2013, Elizabeth Holmes and Walgreens Chief Executive Officer Greg Wasson celebrated their partnership with great fanfare and a ribbon-cutting ceremony. Under the blockbuster agreement between Walgreens and Theranos, Walgreens agreed to pay $140 million to put Theranos’ blood-testing devices in dozens of Walgreens pharmacies.

Wade Miquelon, Walgreens’ former Chief Financial Officer, recently testified at Holmes’ criminal fraud trial about the Walgreens/Theranos deal. 

Miquelon was the prosecution’s 11th witness in building the government’s case that Holmes knowingly misled investors and patients about Theranos’s blood-testing technology capabilities.


Walgreens’ former chief financial officer helped oversee the relationship between Walgreens and Theranos. Miquelon told the jury that Walgreens agreed to pay Theranos a $100 million “innovation fee” to fund the partnership between the two companies and help the blood-testing start-up scale. Walgreens also agreed to pay $40 million for “convertible notes.” In essence, the $40 million in notes was a loan to help fund Theranos. The notes gave Walgreens the option to convert them “to an equity ownership stake.

Miquelon testified that in August 2013, on the eve of the public roll-out of the Walgreens blood-testing program with Theranos, Holmes asked Walgreens to accelerate the $100 million payment. He testified that Holmes told Walgreens executives that Theranos needed the money sooner, and Holmes also asked Walgreens to improve staff training. 

Miquelon was involved with Theranos until 2014 when he left Walgreens. 

By the time the Wall Street Journal broke the news in 2015 that Theranos was primarily using commercial third-party analyzers at Walgreens because its proprietary technology was not working as promised, Miquelon had left Walgreens.

However, Miquelon’s testimony about what happened between the two companies from 2010 to 2014 could be instrumental for the prosecution. It tends to support the prosecution’s theory that Holmes engaged in a long-standing pattern of misrepresentations and deceit to lure investors and business partners to Theranos.  


Miquelon attended a meeting with Holmes and Chief Operating Officer Ramesh “Sunny” Balwani in early 2010. By then, it appears that Holmes was already touting that Theranos had capabilities that it never achieved.

In early 2010, Holmes and Balwani told Walgreens’ executives that Theranos could run around 95 percent of all conventional lab tests on its proprietary testing devices, with results ready in 15 or 20 minutes. This statement, which Holmes and Balwani would continue to repeat for years, is at the heart of Holmes and Balwani’s criminal prosecution.

Holmes and Balwani told Walgreens even more. Beyond basic blood diagnostics, they told Walgreens that the company could perform wellness tests to measure the onset, regression, and progression of obesity and diabetes. According to a March 2010 Theranos presentation filed into the court record, these “general wellness” examinations could even account for a patient’s genetic makeup and environmental factors such as diet, exercise, and sleep.

The presentation further indicated that the wellness tests were part of a Theranos package that included a personalized health assistant that patients could access on a cellphone. This personalized health assistant was able to recommend food choices and other things. An image in the presentation shows automated cellphone messages reminding the user to pack workout clothes on their next trip and offering a coupon for a lunchtime salad. Theranos never launched anything remotely resembling wellness technology of the type described for Walgreens in 2010.

As a financial matter, the Walgreens presentation estimated that Walgreens would earn more than $2 billion in annual revenue and $650 million gross margins if it entered into a partnership with Theranos.

Miquelon was so taken with the presentation that, in March 2010, he even told his boss (Walgreens CEO Greg Wasson) that Theranos was at the forefront of facilitating diagnostic testing at the same time and place as patient care rather than at an external laboratory. The ability to offer point-of-care diagnostics was revolutionary from his perspective.

In short, Miquelon told the jury that Walgreens’ executives believed Holmes and Balwanis’s pitch from that early 2010 meeting. They were excited about the small blood testing devices that could be placed in a pharmacy or clinic and quickly return lab results to patients. They believed that Theranos’ technology was a game-changer, and they wanted to be involved.

According to Miquelon’s testimony, Holmes’s pitch was aggressive, and she wanted to launch a partnership with Walgreens starting in April 2010. A deal would not become final until 2013 when Walgreens and Theranos agreed to create dozens of Theranos blood-testing centers in Walgreens stores.

During the deal negotiations, Miquelon recalled that Holmes told Walgreens executives that three pharmaceutical companies had performed due diligence on Theranos’ technology. Miquelon stated that Walgreens relied on the fact that these pharmaceutical companies had vetted Theranos’ technology.  

“This was one of the most exciting companies that we had seen, maybe not just in lab but in general,” Miquelon told the jury.

But prosecutors allege that Holmes outright lied to Walgreens and others about having her technology supposedly validated by pharmaceutical companies. They claim Theranos used forged documents to support those lies. For example, one document introduced at the trial contains a doctored Pfizer logo. 

On cross-examination, Holmes’ attorneys repeatedly asked Miquelon to tell the jury what due diligence Walgreen did before partnering with Theranos. It does not appear Walgreens did much of any. The defense will try to gain some mileage out of that with the jury, arguing that Walgreens is a sophisticated company that could not have relied on misrepresentations from Holmes.

As we now know, the relationship Miquelon described to the jury unraveled over Theranos’ failure to meet required benchmarks. In June 2016, Walgreens told Theranos it was terminating its relationship and closing operations at all 40 Theranos centers at its Arizona stores. Eventually, Walgreens sued Theranos alleging that Theranos misled them about its technology and breached their contract. The two companies settled that dispute.

Earlier court testimony from former Theranos lab employees stated that Theranos’ proprietary machines could not run the vast majority of the lab tests they offered, so they used third-party commercial analyzers instead.


Looking back at the early stages of Holmes’ courtship of Walgreens in 2010, we can confidently say that Holmes exaggerated Theranos’ blood diagnostics capabilities. In the end, the blood-testing capabilities Theranos touted came to fruition. 

Interestingly, several biotech companies in the marketplace today are close to realizing portions of Theranos’ blood-testing vision. What that may mean to the jury if they learn of it from the defense remains to be seen. On the one hand, this tends to show that Holmes’ idea was not so fantastical as to be impossible to achieve. Holmes’ team may try to use that fact to argue that Elizabeth Holmes was working on the technology and needed more time, but she had no intent to defraud. Business failure is not a fraud. 

It is common for biotech founders to exaggerate the state of their technology during their start-up phase in order to gain investor interest, and they simply need more time to make it all come together. 

At what point are these biotech founders engaging in more than usual commercial puffery and typical exaggeration? 

At what point do these sales pitches to raise investor funds become federal crimes? 

That question is at the heart of what the jury will be asked to decide when evaluating the totality of the evidence in this trial and Elizabeth Holmes’ conduct.

Follow the Prison Professors blog for regular updates on the Elizabeth Holmes criminal fraud trial, which is now at the halfway mark. The Prison Professors team regularly publishes on all aspects of the criminal justice system.

Prison Professors, an Earning Freedom company, works alongside (not in place of) civil and criminal defense counsel to help clients proactively navigate through investigations and prosecutions. Our team also helps clients prepare mitigation and compliance strategies.

If you have any questions or are uncertain about any of the issues discussed in this post, schedule a call with our risk mitigation team to receive additional guidance.

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