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| TWENTY-FOUR |

The Empress Has No Clothes

n a Saturday evening in late September, about three weeks
before the Journal published my first story, an email arrived
in the in-box of Gary Yamamoto, the veteran CMS field
inspector who had dropped in unannounced at the old Facebook
building in 2012 and lectured Sunny Balwani about lab regulations.
Under the subject line “CMS Complaint: Theranos Inc.,” it began:

Dear Gary,

I’ve been nervous to send or even write this letter.

Theranos takes confidentiality and secrecy to an extreme

level that has always made me scared to say anything...I’m

ashamed in myself for not filing this complaint sooner.

The email was from Erika Cheung and it contained a series of
allegations, ranging from scientific misconduct to sloppy lab practices.
It also said that Theranos’s proprietary devices were unreliable, that
the company cheated on proficiency testing, and that it had misled the
state inspector who surveyed its lab in late 2013. Erika closed the
email by saying that she’d resigned from the company because she
couldn’t live with herself knowing that she could “potentially devastate
someones [sic] life by giving them a false and deceiving result.”

Yamamoto and his superiors at CMS took the complaint so seriously
that the agency launched a surprise inspection of Theranos’s
laboratory less than three days later. On the morning of Tuesday,