How blowing the whistle on the Theranos scandal transformed Erika Cheung’s career

Most people who have endured and survived a toxic workplace don’t end up as a character in an award-winning TV show. But Erika Cheung is not like most people, in more ways than one. She risked her livelihood, right to privacy and professional relationships by speaking out about scientific fraud.

Cheung’s journey from researcher to whistle-blower began when she was a junior scientist, not long after she graduated in 2013 from the University of California, Berkeley, with a bachelor’s degree in molecular and cellular biology.

She landed a job at Theranos, one of the most exciting companies in California at the time. Elizabeth Holmes had founded the company in 2003, aged just 19, and had claimed that Theranos was going to revolutionize disease diagnostics. The days of multiple blood samples and intrusive medical investigations would be replaced by the start-up’s technology, one that could detect everything from cholesterol to cocaine.

Theranos claimed that cancers, diabetes, anaemia, herpes, HIV/AIDS and many other ailments could all be diagnosed by the company’s ‘Edison device’, using just a few drops of blood from a finger-prick test.

At its zenith in 2015, Theranos was running close to 900,000 tests per year. It did so without the vigorous oversight of the US Food and Drug Administration (FDA), the lack of which has since been criticized by legal experts as a significant loophole in the regulatory process. Theranos’s activities were classified as ‘laboratory-developed tests’, which the FDA defines as “a type of in vitro diagnostic test that is designed, manufactured and used within a single laboratory”. This classification meant that Theranos didn’t need to have its tests evaluated before they were offered and sold to patients.

A promising prognosis

Cheung still remembers the excitement of the job interview, although the company wouldn’t divulge much of the detail behind Theranos’s technology, citing concerns over corporate espionage. “You’re kept in the dark, and the explanation was trade secrets,” and “you’d find out more when you get inside”, says Cheung. That seemed fair enough to her, given that the company was awash with millions of dollars of investment capital from famous names such as media baron Rupert Murdoch and the Walgreens chain of pharmacies. It was also reassuring that the likes of former US secretary of state Henry Kissinger and William Foege, a former director of the US Centers for Disease Control and Prevention, were on Theranos’s board. Holmes, for her part, was often proclaimed by the media to be the next Steve Jobs, a comparison made in part because, like the founder of the computer company Apple, she frequently wore a black turtleneck sweater.

It all seemed legitimate, and Cheung was pleased to have landed a job as a lab assistant at Theranos. She was looking forward to a fruitful career at the cutting edge of medical research.

Would that it were all above board.

In fact, the science was bogus, the technology was unproven and the boss was a fraud. In 2022, Holmes was sentenced to more than 11 years in prison for defrauding investors and was ordered to pay back US$452 million. The jury acquitted Holmes of conspiracy to defraud patients and of three counts of fraud against individual patients, and did not reach a verdict regarding three further counts of defrauding individual investors.

It wasn’t too long before Cheung began to suspect that the whole enterprise didn’t pass the sniff test. After she started her job in 2013, the secrecy that defined the interview carried on in the workplace. “The smoke and mirrors didn’t end,” she says. “There were all of these different laboratories that you didn’t have access to,” with something bigger and better supposedly happening behind those doors.

But in the short term at least, Cheung was preoccupied with making a good impression and settling in. “It takes a while to onboard and just figure out what’s happening at a company, especially a start-up where everything is in chaos and the turnover is so high that they are basically having people quit at the rate they’re hiring,” she says.

Eventually, however, Cheung wanted answers to reasonable questions. How did the technology work? How did its results compare with those from conventional testing techniques? Her questions went down like a lead balloon.

She started digging around the company’s computer records, trying to piece together a research and development (R&D) timeline. “Initially, I bought into the start-up idea, that is, ‘you’re here to fix these problems’. And I was super invested and committed to fixing things. I was definitely stressed; sometimes I was working at least 12 and sometimes 16 hours for 14 days in a row,” she says. But as she started to raise more questions, her access to certain hard drives was cut. To make matters worse, the high turnover of staff meant that it wasn’t clear who she could approach to ask about the history of the technology.

“I didn’t have access to the digital memory of these things,” she says, and ”there were a lot of deliberate ways in which the company had organized itself in order to prevent people from being able to see the full picture”.

Self-doubt

Cheung can’t remember when she first concluded that something pernicious and illegal was afoot. There was no smoking-gun moment. In reality, it was a slow drip, drip of suspicion, followed by fear and then a sense of moral rectitude that led her to the truth about Theranos.

Cheung is keen to stress that she wasn’t supremely confident, and was constantly second-guessing herself and her convictions. “I was 22 and I had doubt, asking myself: is this how all lab diagnostics are run?” It seemed outrageous to her, but she “still wasn’t too sure”, she recalls.

The most frustrating thing was the lack of hard information to back up her instincts. “I think that’s an issue for most scientists,” she says, the idea that “if I don’t have the full picture, I could be wrong”.

This second-guessing and tortured self-doubt comes from an earnest desire to do the right thing, says Rachel Peterson, one of Cheung’s closest friends at university, who became her confidant for all things Theranos. “She is one of the most genuine and brave and tough people I’ve ever met,” she says. ‘

‘Brave’ isn’t an adjective that Cheung likes to use for herself — because she was so conflicted throughout the process. “I don’t know if that’s how I’d explain how I felt at the time,” she says.

Fortunately for Cheung, she happened across a research engineer who became her ally at Theranos —Tyler Shultz, whose grandfather, George Shultz, a former US secretary of state, happened to be on the company’s board. Cheung had worked with Tyler during a night shift in the R&D department.

She and Shultz examined the results of some of Theranos’s diagnostic tests, comparing them with the outcomes of conventional tests. “We saw things weren’t right,” says Cheung. “The cancer markers could be threefold different to the standard test. It was the difference between telling someone they don’t have prostate cancer when they do, or telling someone they have hyperthyroidism when they don’t. Crazy stuff.”

In early 2014, the pair began to work in tandem, gathering as much data as possible so that they couldn’t be easily ignored when they took their findings to someone in authority. They planned to present a dossier of evidence to Shultz’s grandfather and implore him to influence Holmes and the rest of the board to take Theranos’s technology off the market and back into the development labs. In April 2014, they went to George Shultz’s house for dinner and made their case.

They explained that Theranos’s technology was unsound. “They basically tried to make blood tests for small sample sizes and so they jerry-rigged a bunch of FDA-approved machines. The Edison device was just terrible,” says Cheung. It had a robotic arm, and was supposed to titrate blood samples and add antibodies or reagents to identify a molecule indicating the presence of a disease. “It was like a very impressive PhD project, but it wasn’t ready to be tested on patients and be commercialized,” says Cheung. Over time and with more experience of real labs, she realized “how horrendous this was”, she says.

In reality, most of Theranos’s testing was being done conventionally by human scientists at the lab bench, although they did not have full blood samples to ensure accuracy.

But Cheung says that George Shultz was unconvinced. He dismissed their concerns and tried to reassure them that the company was well led by people who were at the top of their game. That came as a blow, not least to Tyler Shultz, who now had to decide whether to go against his grandfather or toe the company line.

The human cost

Cheung already knew in her heart of hearts what she needed to do — she knew before she even had dinner with the Shultzes, when she had seen a patient’s name printed on a blood-sample label. It was a rare moment of clarity for hert. “I started to realize that I wasn’t a scientist tinkering in a lab,” she says. ”I was, in fact, a health-care professional and I could see the names of the people we were providing these faulty results for.” If George Shultz and the rest of the board weren’t going to help, she would have to take a different line of attack.

Things were starting to take their toll on Cheung, says Peterson. “The number of times when I held her while she was sobbing, just full-on sobbing, even in the years after Theranos, was a constant theme,” remembers Peterson.

When the full extent of fraud at Theranos became clear, Peterson told Cheung to get her house in order. “My advice was very American: it was to talk to a lawyer. I said she should then quit and file a complaint with the government,” says Peterson.

Cheung took that counsel to heart, quitting the company in 2014; Tyler Shultz left shortly before she did. That same year, Holmes was named one of the richest women in the United States and Theranos raised a further $400 million in funding.

In 2014, after consulting her lawyer, Cheung filed a complaint with the US Centers for Medicare & Medicaid Services (CMS), a US federal agency responsible for administering the government’s health-insurance programmes. Shultz defied his grandfather, using an alias to report Theranos to the New York state authorities.

Although Cheung submitted evidence to the CMS under her real name, she asked to be kept anonymous. But the investigations that Cheung’s and Shultz’s whistle-blowing kicked off led to legal action, and it was no longer possible for their names to be kept out of the spotlight. She became an oft-cited name in news coverage of the Theranos hearings.

Evidence and exile

Cheung testified in court, but Shultz didn’t (although he says he would have done so if asked by the prosecution). “I got the subpoena,” remembers Cheung. “It was supposed to take six months, but it took three years.”