After some back-and-forth, Gutierrez, Yost, and Keller all reached
the same conclusion: the Theranos model didn’t comply with federal
regulations. Yost and Keller decided it wouldn’t hurt to send someone
to Palo Alto to see what exactly this company that none of them had
heard of before was up to and to correct its misconceptions.
The job fell to Gary Yamamoto, a veteran field inspector in CMS’s
regional office in San Francisco. Two months later, on August 13,
2012, Yamamoto arrived unannounced at Theranos’s offices in Palo
Alto. By then, the company had completed its move to the old
Facebook building located at 1601 South California Avenue, less than a
mile from its former home on Hillview Avenue.
Sunny and Elizabeth ushered Yamamoto into a conference room.
When he explained that his agency had received a complaint about
Theranos and that he was there to look into it, he was surprised to
learn that they knew where and who it came from. Someone had
apparently tipped them off about Shoemaker’s email to the FDA.
Elizabeth was not pleased, a sentiment made clear by the scowl on her
face. She and Sunny professed not to know what Shoemaker had been
talking about in his email. Yes, Elizabeth had met with the army
officer, but she had never told him Theranos intended to deploy its
blood-testing machines far and wide under the cover of a single CLIA
certificate.
Why then had Theranos applied for a CLIA certificate? Yamamoto
asked. Sunny responded that the company wanted to learn about how
labs worked and what better way to do that than to operate one itself?
Yamamoto found that answer fishy and borderline nonsensical. He
asked to see their lab.
They couldn’t deny him access the way they had to Kevin Hunter.
This was the representative of a federal regulatory agency, not some
private lab consultant they could thumb their noses at. So Sunny
reluctantly took the inspector to a room on the second floor of the new
building. After Dupuy’s firing, Theranos had moved the lab there from
its temporary East Meadow Circle location.
What Yamamoto found in the room didn’t impress him but didn’t
raise any big concerns either: it was a small space with a couple of