Even now, Erika Cheung can get a little nervous about being followed.
The occasional unease is the lingering aftereffect of the former Theranos lab associate’s role in exposing the now-defunct health-care startup, which shuttered last year after whistleblowers and journalists uncovered its dubious blood-testing practices.
Wall Street Journal reporter John Carreyrou broke the story in 2015 that the then-Silicon Valley darling did not have the technology to carry out a range of important tests on just a thimble-sized vial of blood. An array of public figures and international business tycoons had invested a collective $600 million in the failed venture.
After Cheung spoke to Carreyrou, a man appeared at her new workplace and handed her a letter threatening litigation for, it said, revealing “trade secrets” and confidential information. The envelope bore Cheung’s temporary residence, an address that not even her mother knew.
‘I was so paranoid about Theranos and them spying on me, I had a burner phone just to call the Centers for Medicare and Medicaid Services.’
“Being followed is a very terrifying thing,” 28-year-old Cheung, who recently launched a nonprofit, Ethics in Entrepreneurship, told MarketWatch. “That was probably the hardest thing: just conquering your own fear and just saying, ‘OK, whatever happens, you’re just going to get through it.’”
Cheung quit in 2014 after seven months, and says removing herself from the turmoil helped clear her head. She learned from Carreyrou that multiple other employees had raised concerns, and learned through a lawyer’s free advice that she might be protected by whistleblower laws if she reported Theranos to a regulatory agency.
“I was so paranoid about Theranos and them spying on me, I had a burner phone just to call the Centers for Medicare and Medicaid Services, because I was so scared that I was going to get sued or they were going to come after me,” Cheung said. But reporting her former employer, she discovered, was as simple as writing an email.
‘Being followed is a very terrifying thing. That was probably the hardest thing: just conquering your own fear.’
That email to Centers for Medicare and Medicaid Services (CMS) field inspector Gary Yamamoto, dated Sept. 20, 2015, began with Cheung’s admission that she had “been nervous to send or even write this letter,” and was “ashamed” for not filing the complaint sooner. “Theranos takes [confidentiality] and secrecy to an extreme level that has always made me scared to say anything,” she wrote. Her letter would trigger a surprise inspection of the lab just days later.
While people close to Cheung were concerned for her safety, no one discouraged her from coming forward, she said. In fact, her father placed faith in his daughter’s judgment: “When I told him I quit the company and wanted to whistleblow, he said, ‘Erika, you’re a smart girl. I trust you; you’ll figure it out,’” she said. “That was probably one of the most powerful things that a father could ever say.”
Drawing lessons from Theranos
Theranos chief executive Elizabeth Holmes and her former business partner and ex-boyfriend, Ramesh “Sunny” Balwani, now face felony criminal charges that could land them in prison for up to two decades. Both Holmes and Balwani have pleaded not guilty.
Holmes’s “unicorn,” once valued at $9 billion, has become both a punchline and a cautionary tale in light of revelations that the company deceived shareholders and put patients’ health at risk with its defective finger-stick blood tests.
As her former boss and onetime idol awaits trial, Cheung has found new purpose in culling practical lessons from the ordeal. She now works full-time on the nonprofit alongside fellow Theranos whistleblower and close friend Tyler Shultz.
Who should play Cheung in the miniseries? ‘If Hollywood could please have an Asian-American representation, that would be great.’
Their goal: Preparing young entrepreneurs for ethical challenges they might face in starting their own tech company, or even working for one. “When you focus on profitability or just building the next unicorn, you have these issues where you stop paying attention to the ethical consequences,” she said.
Theranos has made a new wave of headlines in 2019 with a handful of high-profile media projects, including an HBO T, +2.03% documentary by Alex Gibney, “The Inventor: Out for Blood In Silicon Valley,” released earlier this spring. Others a popular ABC News DIS, +1.42% podcast, a forthcoming Hulu miniseries starring Kate McKinnon and an in-the-works Adam McKay film starring Jennifer Lawrence.
Cheung doesn’t care who plays her in the Hulu miniseries — “If Hollywood could please have an Asian-American representation, that would be great” — but says she hopes the storylines about the tech industry get handled with care.
Her nonprofit launched on March 18, the same day the HBO documentary debuted, and focuses on training students and entrepreneurs on how to prepare for ethical dilemmas. The organization teams up with academics, lawyers, compliance officers, entrepreneurs and industry experts to formulate resources, teaches investors how to perform proper due diligence; and works with whistleblower lawyers.
The Theranos case is instructive, Cheung said. It revealed a need for greater transparency and better communication within an organization, as well as the importance of bringing in experts who have knowledge of the regulatory landscape and experience with the medical technology in question, she said.
Another lesson: “This is not the norm. Theranos is a pretty spectacular and sensational case,” Cheung said. “Everyone can see commonalities in their own experience, maybe not at the same scale, but there are still a lot of people who build technology companies who are trying to do it the right way.”
‘I’ve been nervous to send or even write this letter’
The University of California, Berkeley alumna began working at Theranos in her early 20s — and, as she recalled in Gibney’s documentary, quickly “drank the Kool-Aid” after joining the medical-device startup. Holmes had fashioned herself as the next Steve Jobs, speaking in a low timbre and wearing a black turtleneck, and soon became a magazine cover star and media darling.
On the workplace culture at Theranos: ‘People were deleting data points and cherry-picking results.’
But Cheung would soon come to discover that Theranos was, as she put it, “the Wild Wild West of blood diagnostics.” She started in research and development, but got transferred to the clinical lab. Amid a workplace rife with fear, stress and long work hours, where workers were siloed in their respective departments, she grew dismayed by the chaos and the constant mandate from management to get out patients’ blood-test results “as fast as possible.”
“There was no consideration for how it was derived,” Cheung recalled. “People were deleting data points and cherry-picking results.”
In retrospect, Cheung says she wishes she’d had more confidence in herself and in her commitment to scientific integrity and patient safety. “It could have been a little less painful, I think, if I started really clearly with just: ‘Look, stay calm, you are fine. This doesn’t need to be that stressful. You’re doing it based on the right principles.’”
She emphasizes “the power of writing good notes” as a whistleblower, and says it’s important to provide a detailed account that includes dates, names, time periods and any data points available.
Grappling with the mystery of Elizabeth Holmes
Cheung last spoke to Holmes in 2014. She called her ex-boss’s downfall “pretty tragic,” and recalled wanting to be wrong as she watched Holmes’s mythology unravel.
“I really wanted Elizabeth to succeed. I wanted to see just even the character of who she was be the real thing,” she said. “Elizabeth Holmes represented to me that if you worked hard enough, you had a strong enough vision, and you were smart enough, you could make the impossible happen.” To a certain degree, Cheung is still drawn to such a narrative, she said, “but with far more skepticism now.”
‘I really wanted Elizabeth to succeed. I wanted to see just even the character of who she was be the real thing.’
She remains confused as ever about Holmes’ motivations. “There’s a part of me that feels like she went in with good intentions. I don’t think she was your very ruthless con artist, that she was trying to siphon money from people,” Cheung said. She isn’t sure whether it was delusion, narcissism or ego that got in Holmes’ way.
As for what punishment Holmes deserves, Cheung leaves her fate “up to the court system and justice system to determine.” She does, however, suggest that “it would set an extremely bad precedent if she just walked away scot-free.”
Cheung is loath to weigh in on some of the frothier news items about Holmes, including gossip about her new hotel-heir fiancé and oft-analyzed voice. She points instead to the patients in Arizona who received faulty medical results at Walgreens WBA, +0.88% pharmacies, the careers of former Theranos employees and investors who lost collective millions.
“I think it’s a bit sad that all of this happened. I try not to engage with learning about that stuff because,” Cheung said. “It’s not going to make better the things that went wrong within the company.”
As for that Hulu miniseries: “I hope it doesn’t harness a lot of fear amongst people within the biotechnology industry,” she said. “A majority of people working on these projects are in it to do good things and improve patient lives.”
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