Theranos whistleblower on the charm of Elizabeth Holmes and the fraud he discovered

When Tyler Shultz tested the blood of Theranos employees for syphilis, he says he knew something was seriously wrong at the company.

The tests indicated that 20% of his co-workers had the sexually transmitted disease, which he said couldn't be possible.

The same tests were being performed on members of the public in pharmacies, he said.

"We were telling people who had syphilis they did not have syphilis and we were telling people who did not have syphilis they had syphilis," said Shultz. "Basically the tests did not work."

Shultz, who blew the whistle on Theranos and its leader, Elizabeth Holmes, spoke Friday to a full Bush Auditorium in Cornell Hall as part of the Orin Ethics Symposium at the University of Missouri. The talk was sponsored by the School of Accountancy and the Trulaske College of Business.

Shultz's grandfather, former U.S. Secretary of State George Shultz, had introduced Shultz to Holmes. His grandfather was on the board of Theranos and a large investor in it. Holmes, in her "deep baritone voice," told him about the revolutionary blood-testing technology she had developed, a portable device that could test any number of diseases with single drop of blood pricked from one's finger.

"It was really hypnotic," Shultz said of the presentation. He accepted her invitation to join Theranos.

On his first day, Theranos launched with Walgreens. There was a screaming match between Holmes and a manager in the lab.

The blood collected in the pharmacies was being tested by another lab, he said.

"It was really unclear what we had launched," Shultz said. "No one on my team had actually seen the Theranos device, which, retrospectively, is a big red flag."

It was an open secret at the company that the technology didn't exist, he said. Some who raised concerns were immediately fired. Some who quit were sued.

He decided to confront Holmes, gently, with his data.

"I did not go into her office to say she's a fraud," Shultz said.

Holmes dismissed his concerns and told him he was misunderstanding the data, he said.

"She started avoiding me, which was very strange," Shultz said.

"I tried really, really hard to prove myself wrong," but he couldn't, he said. "I knew with 100% certainty I was right."

He outlined his concerns in a long email to Theranos President Sunny Balwani, Holmes' boyfriend. Balwani responded by calling Shultz "arrogant, ignorant, patronizing and reckless."

Shultz told the audience that Balwani was wrong; he's not patronizing.

His response email was his two-week notice, but Balwani told him to leave immediately.

Holmes was his grandfather's guest at Thanksgiving a few weeks later, he said.

"To say it was awkward was an understatement," Shultz said.

Holmes gave a toast stating her love for the entire family and staring directly at him, he said. He raised his glass.

"I was telling my hand to stop shaking," he said. "That was the worst Thanksgiving ever."

He began speaking off the record initially with Wall Street Journal reporter John Carreyrou. Shultz was suspicious of reporters, because previous stories about Holmes had been glowing profiles.

Theranos filed a temporary restraining order against Shultz and ordered him to appear in court. Holmes had hired private investigators to follow him.

Using his parents' money, Shultz hired a legal team. At one point, his parents urged him to sign papers Theranos wanted him to sign. They told him the best outcome was they would spend $2 million and win and have to sell their house.

"I'm not going to sign what they want me to sign," Shultz said he told his parents. "Get ready to sell the house."

The first Wall Street Journal story on Theranos was weak, Shultz said. Then came more.

"It was just punch after punch after punch," Shultz said of Carreyrou's reporting exposing the company.

"I ended up going on the record a few days after my 26th birthday," Shultz said. "That was the best decision I ever made."

His life has turned around for the better. He is celebrated wherever he goes and has had dozens of job offers from legitimate companies.

He praised Carreyrou's reporting.

"He is tenacious," Shultz said. "Your average reporter could not have broken this story. It took a special kind of reporter to do what he did."

His relationship with his grandfather remains rocky, he said. He chose a criminal over his grandson, Shultz said.

During audience questions, he said he dislikes the Hulu series "The Dropout" about Holmes and Theranos, saying it "overly humanizes" Holmes, who is instead "a sociopath and emotionless robot."

Holmes, convicted of investor fraud and conspiracy, faces a sentencing Nov. 18. She faces up to 20 years in prison.

Balwani also was convicted on 12 counts. No sentencing date has been set.

An audience member asked what the experience did for Shultz's faith in humanity.

"I have witnessed firsthand that greed is a total sickness," Shultz said.

But there were other people like him who saw wrong and did the right thing.

Roger McKinney is the Tribune's education reporter. You can reach him at rmckinney@columbiatribune.com or 573-815-1719. He's on Twitter at @rmckinney9.

This article originally appeared on Columbia Daily Tribune: How Elizabeth Holmes fooled a former U.S. Secretary of State