
U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani - dcgudeman
https://www.wsj.com/articles/u-s-files-criminal-charges-against-theranoss-elizabeth-holmes-ramesh-balwani-1529096005
======
mhneu
Excellent news for American society.

“The Chickenshit Club” by Eisinger recently explained why the lack of criminal
charges had emboldened white collar crime.

Basically, individuals need to have the risk of criminal charges if they do
something very egregious - they need to have skin in the game.

The US Justice Dept has in the past two decades largely only been fining
corporations. And so companies estimate risk and budget for these numbers. So
fines are not a completely effective deterrent. The book explains this and how
the DOJ policy grew out of backlash to the Enron verdict.

Ps we talked about this in May, and @danso predicted criminal charges would
come - and he was right. This is good news for the US DOJ. Too bad the US
can’t retrospectively prosecute bankers for 2008 and claw back their size-
subsidized, low risk premium profits.

[https://news.ycombinator.com/item?id=17123315](https://news.ycombinator.com/item?id=17123315)

Edit: book review here. It’s a really good book.
[https://mobile.nytimes.com/2017/07/05/books/review/the-
chick...](https://mobile.nytimes.com/2017/07/05/books/review/the-chickenshit-
club-jesse-eisinger-.html)

~~~
dghughes
Even speeding tickets or anything most normal people would find a burden are
nothing to super rich. But making few days in jail mandatory is a major
deterrent.

Then again even people texting and driving are not swayed by fines. In my
region of the world a $3,000 fine is not a deterrent to many people. I say
jail time would change that attitude.

~~~
tomxor
> Even speeding tickets or anything most normal people would find a burden are
> nothing to super rich.

I'm not sure how it works in your country but in the UK too many speeding
tickets and you will loose your license. The exact number depends on the
severity of each offence, but we get max of 12 points over 3 years [1] so they
stick with you - repeat offenders are given even stricter rules after getting
their license back.

I get a sinister smile when observing rich people in those big shiny 4x4s on
some stretches of motorway I know are littered with speed traps... It's a
funny equaliser - I do the limit, but those types of people always gota be in
front of someone with a shitter car - but the regret is apparent in their
latent brake lights after the flash.

[1] [https://www.gov.uk/driving-disqualifications](https://www.gov.uk/driving-
disqualifications)

It's a shame this type of law that equalises wealth isn't more common, for
instance in a related matter - I've heard plenty of stories about rich people
basically using parking fines as parking tickets, there doesn't seem to be a
limit or anything beyond a monetary disincentive. It's also more common to see
expensive cars parked in places they shouldn't be, and i'm convinced this is
the reason.

~~~
astura
So?

What is stopping someone who loses their license from just driving anyway?
They've already shown not to give a shit, so they'll continue driving without
a license.

My dad lost his license many years ago and never stopped driving. He gets
arrested once in a while, doesn't stop him.

~~~
tomxor
> My dad lost his license many years ago and never stopped driving. He gets
> arrested once in a while, doesn't stop him.

You live in a very strange country, in the UK your dad would have had his car
taken away from him and crushed... and if he repeatedly found other cars to
drive without a license he would probably end up in prison.

~~~
astura
My dad has been to jail before for driving without a license, but driving
without a license is not a life sentence so he's back out on the road driving
next month.

~~~
tomxor
There is no repeat offenders law?

------
maxxxxx
Does anybody know if Theranos got started with at least an idea how to
accomplish what they wanted to do? From what I have heard in interviews they
started with the thought "Doing xxx would be super useful" but didn't have an
approach for accomplishing this but instead took in money and tried to figure
it out. It's like me saying "An antimatter drive would revolutionize space
exploration" and starting to collect money but without even the faintest idea
how to produce one.

Does anyone know? Did Holmes have any insight that caused her and the
investors to believe she could do the blood tests?

~~~
atombender
This interview with John Carreyrou [1], the Wall Street Journal journalist who
is largely responsible for exposing Theranos, goes into a lot of detail. It's
long, so if you want a shorter answer, jump to the question "What technology
did Theranos actually develop?":

 _Basically there were three iterations of the technology. The first one used
microfluidics, which are basically the repurposing of the micro-fabrication
techniques that the computer chip industry pioneered to move tiny volumes of
liquid. Theranos tried to work on that for several years before Holmes lost
patience in late fall 2007 and abandoned it. At that point she pivoted to what
was essentially a converted glue-dispensing robot. One of the engineers
ordered a glue-dispensing robot from a company called Fisnar in New Jersey,
studied its components and rebuilt a smaller version of it. It was a robotic
arm on a gantry with three degrees of motion and a pipette stuck to its end,
and it replicated what the scientist does at the bench. That ended up being
called the Edison and it could do only one class of test, known as
immunoassays. It was also error-prone. The third iteration of the technology
was the miniLab, which Holmes wanted to be able to do more than just
immunoassays. The miniLab didn’t invent any new techniques to test blood with.
It miniaturized existing laboratory instruments and packed them into one box.
By the time Theranos went live with its tests, the miniLab was a
malfunctioning prototype._

The interview also explains how Holmes was able to attract so many influential
people on her board. The short answer is her Jobs-like "reality distortion
field" \-- she was exceedingly good at convincing non-scientists that their
science worked.

[1] [http://m.nautil.us/issue/60/searches/does-theranos-mark-
the-...](http://m.nautil.us/issue/60/searches/does-theranos-mark-the-peak-of-
the-silicon-valley-bubble)

~~~
api
> The short answer is her Jobs-like "reality distortion field" \-- she was
> exceedingly good at convincing ...

Considering this and the lack of substance behind her claims, I would
personally bet money that she is a clinical psychopath.

The most disturbing thing I have ever observed about human beings is our
tendency to follow psychopaths. Psychopaths seem to have this gravity around
them and people just fall into line. I've observed some spectacular examples.
A psychopath can say the most questionable or even absurd things and people
will just believe, whereas people will be skeptical of even very sane things
that come out of the mouths of non-psychopaths. It's as if clinical
psychopaths have some special instinctive ability to generate body language,
vocal cues, and linguistic patterns that manipulate others very effectively.

I am not claiming that everyone with a "reality distortion field" must be a
psychopath, but I've definitely observed a positive correlation.

~~~
dreamcompiler
I don't know about Holmes (other than having read Carreyrou's book) but I've
been around pathological, charismatic narcissists enough to be as fascinated
as you at their ability to lie to the face of _very_ accomplished people and
be completely believed. It's almost like executives need a training course in
spotting and dealing with them.

~~~
lsc
my outsiders view of management training is that they work so hard at
cultivating confidence that they start thinking that confidence, not
competence, is what they need to select for in roles outside of leadership.

As far as I can tell, "leader types" are far more vulnerable to confident
people than the rest of us because of this.

~~~
wpietri
I also think falling for this is implicit in the notion of the MBA.
Previously, management was mainly company founders, founder families, and
people who had come up through the ranks. That is, all people who spent years
learning the specifics of the business. But the theory of the MBA is there's
some universal set of "business skills" that makes actually understanding the
business domain irrelevant.

In practice, I think this means falling back on a limited sort of finance
understanding and some generic notions of top-down business process. There's
not much there, so they make up for it by leaning hard into their human
instincts and skills.

Unfortunately, that leads to many problems, including over-trusting people who
present well and seem confident.

~~~
lsc
I personally think the MBA system is a big step up from just choosing leaders
based on how closely related to a powerful person they are. (I mean, I
understand there is a lot of overlap between the two... I'm just saying that
the MBA system is a step forward, not that it's _good_ )

~~~
wpietri
Unfortunately I think the MBA enables a power-and-politics system. If people
have to work their way up and learn an industry, competence and a long-term
focus are more rewarded than if a credential makes you a supposedly universal
expert.

------
pchristensen
For anyone interested in the Theranos story, the reporter that wrote this
article (John Carreyrou) is the same one whose investigation brought down
Theranos. He wrote a book called "Bad Blood: Secrets and Lies in a Silicon
Valley Startup" ([https://www.amazon.com/Bad-Blood-Secrets-Silicon-
Startup/dp/...](https://www.amazon.com/Bad-Blood-Secrets-Silicon-
Startup/dp/152473165X)). He was also recently on the podcast This Week in
Startups to discuss Theranos: [http://thisweekinstartups.com/john-carreyrou-
bad-blood/](http://thisweekinstartups.com/john-carreyrou-bad-blood/) or
[https://www.youtube.com/watch?v=dWQYKVasMoY](https://www.youtube.com/watch?v=dWQYKVasMoY)
).

Basically, Elizabeth Holmes wanted to be a billionaire and restore her
family's fortune. She started a medical tech company but didn't include any
scientists or doctors on her board. Demos and employment were tightly
controlled by NDA, and structured so as few people as possible knew about the
scam. Somewhere between 1-8M (10-100%) of blood tests Theranos performed on
hacked machines from other companies are suspect or outright wrong. Her
company rode the "unicorn" wave at just the right time to get lots of funding
and publicity, even though it has been operating since 2006.

------
jaredhansen
While Theranos was flying high, much was made of the company's connections to
DC power elite - Kissenger on the board, etc.[1]. And the implication usually
seemed to be that the deep bench of Serious And Important And Powerful People
allowed the company to get away with things that otherwise would not have been
possible.

I think it's worth pausing to consider: when's the last time you heard of a
startup CEO/CTO team getting indicted for wire fraud? I'm not saying it
doesn't happen, and I have no position on whether Holmes and Balwani are
guilty of these or other charges.

But I do have to wonder whether the degree of attention from the DOJ has more
to do with avenging the reputational and possibly financial losses of those
same board members, than garden-variety "the DOJ prosecutes fraud".

In which case, there'd be a civics lesson as well. Live by .gov, die by .gov.

(Edit to clarify, lest I be accused of insufficient virtue signaling: fraud is
bad, don't do it, if they committed fraud they should be punished, etc etc.)

[1]
e.g.[https://www.bizjournals.com/sanjose/news/2018/03/14/theranos...](https://www.bizjournals.com/sanjose/news/2018/03/14/theranos-
board-mattis-kissinger-schultz-holmes.html)

~~~
JumpCrisscross
> _I do have to wonder whether the degree of attention from the DOJ has more
> to do with avenging the reputational and possibly financial losses of those
> same board members_

The response to evidence against a conspiracy theory is not to flip the
conspiracy theory.

If you defraud investors out of billions of dollars _and_ lie to Medicare
_and_ Streisand effect the _Wall Street Journal_ when it investigates you,
you're going to get busted.

~~~
zeth___
The banking crisis says otherwise.

------
seibelj
I wonder how Tim Draper will argue this is a conspiracy to take down "another
great icon"[0]

[0] [http://fortune.com/2018/05/11/tim-draper-theranos-
elizabeth-...](http://fortune.com/2018/05/11/tim-draper-theranos-elizabeth-
holmes/)

~~~
elgenie
He's probably too busy now trying to split up California into pieces.

[http://www.latimes.com/politics/la-pol-ca-california-
split-t...](http://www.latimes.com/politics/la-pol-ca-california-split-three-
states-20180612-story.html)

~~~
maxxxxx
That guy is nuts. It scares me that with his money he has a lot of influence.

~~~
bredren
I realize the ongoing support of this founder looks pretty bad. But in all my
interactions and work with Tim Draper, I've found him to be an ethical and
good person. He is nuts in an amazing way, and of all the investors I have met
in the valley, I can't think of any other one I'd entrust with his influence.

~~~
propman
That may be true, but if Holmes wasn’t stopped, thousands could have
died...people trusted her to get accurate blood test results. What if some
major medical ailment went undiscovered due to the poor accuracy of her
machines?

Holmes is a ruthless, despicable humnan being. Cheating people out of money is
one thing. Cheating people of their health, denying when caught for years and
years is on a complete another level. And what she did to the poor
whistleblower? Almost ruined his life and went a few rings below murder to her
chief scientist. Not to mention the mafia style shakedown of John C, the
reporter who broke the story.

If someone knows all that about a person, and still glowingly praises them, in
my opinion they are NOT ethical and not a good person.

------
minimaxir
DOJ indictment: [https://www.justice.gov/usao-ndca/pr/theranos-founder-and-
fo...](https://www.justice.gov/usao-ndca/pr/theranos-founder-and-former-chief-
operating-officer-charged-alleged-wire-fraud-schemes)

~~~
dralley
"The defendants are charged with two counts of conspiracy to commit wire fraud
and nine counts of wire fraud. According to the indictment returned yesterday
and unsealed today, the charges stem from allegations Holmes and Balwani
engaged in a multi-million dollar scheme to defraud investors, and a separate
scheme to defraud doctors and patients. Both schemes involved efforts to
promote Palo Alto, Calif.-based Theranos."

------
75dvtwin
Theranos / Holmes, also demonstrated how superficial, almost down to
malpractice current so called journalism is.

Complete lack of analysis, expertise in the fields they are covering, and
clear initial non-biased position.

Instead, we get this flood propaganda + sensationalism garbage from these so
called 'reputable' news sources.

And, as a consequence, con-artists, career politicians, and 'celebrities' \--
leverage this legalized malpractice for their purposes.

While we, the consumers of 'news' \-- are being exploited and treated like as
dehumanizing 'advertisement revenue points/votes. We are essentially being
suffocated by this 'carbon dioxide of information'.

So in my view, it is not just the case of E. Holmes misleading investors,
board members and consumers -- it is also the case of journalism malpractice.

~~~
JumpCrisscross
> _Theranos / Holmes, also demonstrated how superficial, almost down to
> malpractice current so called journalism is_

Theranos was exposed by a _Wall Street Journal_ reporter investigating and
exposing the fraud. He was threatened multiple times and never budged. This is
a story of journalistic excellence.

~~~
eric-hu
I think that reporter did good work, but isn't this like pointing to a
hackathon bug fix that saves a company as engineering excellence?

The parent is seemingly saying that quality journalism would have better
scrutiny to not allow the situation to get this far in the first place.

------
iscrewyou
Reading the theranos story, what’s going on in the political spectrum today,
watching the steps people seem to have taken to get where they are to
influence the society and then seemingly failing at it, I am always reminded
of the documentary “Enron, the smartest guys in the room”. It’s such a simple
idea that likely one thing led to another and they have climbed a ladder to
defraud investors and tried to cause public harm. Those first steps were maybe
of good intentions or maybe of bad ones. But somewhere along the way, they
clearly created a bubble of their own where they assured themselves that it’s
ok what they are doing. Never lose the outside reference point. Never.

------
ransom1538
"The defendants are charged with two counts of conspiracy to commit wire fraud
and nine counts of wire fraud."

WHY DO THIS. Each count of wire fraud is 20 years in prison [1]. If 9 counts
are proven you are looking at a 180 years in prison. (life sentence). You are
better off doing 2nd degree murder 3 times - at least it is a challenge to
prove. Proving wire fraud sounds pretty simple - they just read a bunch of
emails and text messages in court. Everyone will turn nasty on each other due
to the harsh penalties. Wire fraud = bad times. Just be honest with your
investors.

[1] [https://www.criminaldefenselawyer.com/resources/wire-
fraud.h...](https://www.criminaldefenselawyer.com/resources/wire-fraud.htm)

~~~
tptacek
This is inaccurate in two ways.

First, 20 years is the _maximum guideline sentence_ available for wire fraud.
The Federal Sentencing Guidelines has a points-like system (with points added
for various attributes of the crime, like whether the accused took steps to
conceal their crime, or crossed some dollar threshold) that heavily counts the
prior criminal history of the accused. This is an egregious wire fraud case,
but it's still a little unlikely that any one count will see the maximum
sentence applied.

More importantly, the norm in federal sentencing is for similar charges to
group, and for the longest of those counts to set the sentence. It is _not_
the norm to serve (here) each of the "nine counts" consecutively.

Google [whale sushi sentence] for more details.

~~~
ransom1538
+1 Thanks man. Amazing article.

[https://www.popehat.com/2013/02/05/crime-whale-sushi-
sentenc...](https://www.popehat.com/2013/02/05/crime-whale-sushi-sentence-
eleventy-million-years/)

------
knolan
There’s a lot of research money in microfluidics. It has huge potential to
revolutionise an awful lot of the tedious time consuming laboratory work in
health care.

Instead of painstakingly pipetting samples into well plates all day, trains of
thousands of droplets can be fed into the microfluidic conveyor belt and
processed accurately and automatically.

It can work very well. I once worked in a startup that was able to achieve
exactly this however it was enormously challenging. The core technology was
developed in a university and eventually spun out. Then it grew into something
much larger as fully functional systems were developed for customers. The cost
was enormous and the reliability not particularly fantastic but the customer
was thrilled with the potential. Eventually we were bought out and while I
took another path colleagues formed another hugely successful startup.

There are many many similar stories just like this in this space.

Holmes it seems was a highly effective pretender wanting to leapfrog the
research she would have glimpsed while at Stanford by promising something that
could do it all. So the money rolled in and she no doubt hired good technical
people but instead of building something, anything worthwhile she doubled down
on the lie.

------
kennxfl
It's people like Tim Draper that encouraged the fraud. From a totally logical
point of view:

1\. How do you invest millions in technology you cannot even look at even in
year 10?

2\. How do you defend a CEO in public by attacking credible journalists and
not even once question the actual concerns in the company?

3\. A medical company run by a first year drop-out and one without a single
licensed doctor on the board?

C'mon. Even Steve Jobs did not get that leeway.

------
riantogo
For your Friday drive home here is the recent Jason Calacanis interview of the
WSJ reporter who broke the story. Great listen.
[https://itunes.apple.com/us/podcast/this-week-in-startups-
au...](https://itunes.apple.com/us/podcast/this-week-in-startups-
audio/id315114957?mt=2&i=1000413578016)

~~~
victor9000
Same episode, but it doesn't require itunes:

[https://www.stitcher.com/podcast/this-week-in-startups-
audio...](https://www.stitcher.com/podcast/this-week-in-startups-
audio/e/54866804)

------
apo
Holmes is a master obfuscator:

[https://www.youtube.com/watch?v=eqYHwI87cDQ](https://www.youtube.com/watch?v=eqYHwI87cDQ)

------
aphextron
The indictment shows "No bail, arrest warrants issued" [0]. She'll be sitting
in a prison cell by tomorrow morning.

Wow.

[0]
[https://www.justice.gov/file/1072521/download](https://www.justice.gov/file/1072521/download)

~~~
mchannon
It does not show that.

Being familiar with the process, it looks like they're out on supervised
release. Non-custody. No point in putting a warrant out for someone when
they're at the courthouse to be arraigned.

~~~
aphextron
I must be confused then. Why does the defendant section say “Warrant, no
bail”?.

~~~
mchannon
Probably chalk it up to a very confusing and esoteric form. No bail could just
mean they don't have to post bail to get out.

"Warrant" could just mean they came in on a warrant vs. a summons.

More important is the top of the form: "Defendant is NOT in custody".

------
blakeross
Biannual reshare of a pilot I wrote for a TV parody of Theranos:
[http://www.blakeross.com/pricks.pdf](http://www.blakeross.com/pricks.pdf)

:)

~~~
mayank
Are you bummed that they didn't go with your screenplay for the big screen
adaptation starring Jennifer Lawrence [1]? :)

[1]
[https://www.imdb.com/title/tt5795144/](https://www.imdb.com/title/tt5795144/)

~~~
blakeross
No, but I'm bummed they didn't steal the name "Pricks"!

~~~
akhilcacharya
I was thinking Unicorn Blood

------
tdurden
Martin Shkreli is in prison now - he deserves it, though he was guilty of
_far_ less then Elizabeth Holmes.

Holmes should already be in prison for massive fraud. The fact she is a female
and mimicked Jobs seems to have saved her so far though.

~~~
mikeryan
That’s an interesting read on what Shkreli did vs Holmes.

At least Holmes “victims” AFAIK were mostly rich folks losing other people’s
money they’re gambling with and should have known better.

Shkreli fleeced normal folks just looking to get their day meds.

~~~
the_narrator
> At least Holmes “victims” AFAIK were mostly rich folks

why would that make it any better?

~~~
URSpider94
I think the argument is that stealing $1 million from a billionaire could be
considered ethically less bad than stealing $10,000 from someone who is
$50,000 in debt due to medical bills. The second theft will have much more
impact on the victim than the first.

~~~
the_narrator
> The second theft will have much more impact on the victim than the first.

That hardly makes it OK though, Are you saying that the first case doesn't
deserve the same punishment as the second?

~~~
mikeryan
I can’t speak for anyone else but Shkreli was convicted for Securities fraud,
Holmes charged wire fraud. The court cases are pretty much moot. They will
likely have similar outcomes.

Morally and Ethically however I’d consider Shkreli guilty of far more.

------
code777777
> "The indictment further alleges that Holmes and Balwani knew that many of
> their representations about the analyzer were false. For example, allegedly,
> Holmes and Balwani knew that the analyzer, in truth, had accuracy and
> reliability problems, performed a limited number of tests, was slower than
> some competing devices, and, in some respects, could not compete with
> existing, more conventional machines."

------
resentfuljoe
[http://www.paulgraham.com/founders.html](http://www.paulgraham.com/founders.html)

 _4\. Naughtiness

Though the most successful founders are usually good people, they tend to have
a piratical gleam in their eye. They're not Goody Two-Shoes type good.
Morally, they care about getting the big questions right, but not about
observing proprieties. That's why I'd use the word naughty rather than evil.
They delight in breaking rules, but not rules that matter. This quality may be
redundant though; it may be implied by imagination._

 _Sam Altman of Loopt is one of the most successful alumni, so we asked him
what question we could put on the Y Combinator application that would help us
discover more people like him. He said to ask about a time when they 'd hacked
something to their advantage—hacked in the sense of beating the system, not
breaking into computers. It has become one of the questions we pay most
attention to when judging applications._

~~~
dcposch
PG is absolutely correct in my experience. The best founders are Chaotic Good
on the alignment chart.

> Morally, they care about getting the big questions right, but not about
> observing proprieties.

Holmes does not match that description at all.

Lying to investors, lying to the FDA, secretly using your competitors' tech to
mask the fact that your core product does not work.

She did not care about getting the big questions right.

------
pappaSsmurf
>Theranos’s investors, most of whom poured money into the company after its
commercial rollout in Walgreens stores in late 2013, have collectively lost
nearly $1 billion. They include the Waltons, heirs to Walmart Inc. founder Sam
Walton, media mogul Rupert Murdoch, Atlanta’s Cox family and the family of
Betsy DeVos, the Secretary of Education. Each invested more than $100 million
in Theranos—investments that are now worthless.

edit: sometimes you are brought to justice b/c you conned the wrong people...

~~~
techsin101
You're saying there is no hope for my Kickstarter campaign investment

------
thelastidiot
It's great news for justice. These guys should do time. I read back in March
(I can't find the link but I think it was the Economist) that the case had
been dismissed.

------
techsin101
Serious question were they both in sexual relationship... Because I feel the
old Indian guy took over her... And influenced her to continue lies

~~~
techsin101
yes they were.. found it

[https://www.wsj.com/articles/theranos-inc-s-partners-in-
bloo...](https://www.wsj.com/articles/theranos-inc-s-partners-in-
blood-1526662047)

------
tequila_shot
if WSJ is behind a paywall:

[https://outline.com/dUwMC4](https://outline.com/dUwMC4)

------
intopieces
Non-Paywall Link: [https://archive.fo/Sd8AC](https://archive.fo/Sd8AC)

------
forthispurpose
Anyone can weigh in how much can they possibly get?

------
godelmachine
Behind a paywall. Would anyone kindly help me with a link that's free?

------
Zhenya
Paywall bypass:

[https://outline.com/dUwMC4](https://outline.com/dUwMC4)

------
Justin_K
It's about time, what these two did is disgusting and shameful.

------
bitmapbrother
Here's Tim Draper's interview on CNBC telling people in 2018 that Elizabeth
Holmes is an icon and hero. He was an early investor in Theranos and likely
responsible for bringing in a lot of the major investors. As far as I'm
concerned he should also be investigated for his part in this massive fraud.

[https://www.cnbc.com/video/2018/05/10/vc-draper-theranos-
fou...](https://www.cnbc.com/video/2018/05/10/vc-draper-theranos-founder-
elizabeth-holmes-was-bullied-into-submission.html)

------
sonnyblarney
"Wire fraud" \- it's amazing the litany of things one can do, and ultimately
get caught up in this specific basket. Al Capone went down for tax evasion ...

~~~
techsin101
Was thinking the same thing

------
iosDrone
Someone asked how she hadn't been indicted a few weeks ago, and I said that
the investigation was ongoing but she would surely been indicted. Everyone
following this case closely saw this coming.

------
balozi
Wait, what?! Ramesh Balwani was Ms. Holmes's boyfriend? I don't recall seeing
that covered anywhere else before.

~~~
whoisjuan
Really? Wow, that's a weird couple...

~~~
gaius
I don’t want to excuse Holmes of her many crimes nor rob her of agency, but
the circumstances in which they met do not reflect well on Balwani’s
character.

------
s2g
Oh good. Glad the investigation finally got some charges.

------
anoncoward111
So I mean like, fraud is definitely not a good thing, but _COUNTLESS_
government contractors committed outright fraud and embezzlement during the
Iraq War, and none of them were ever held accountable.

One of them even made 8 billion USD completely disappear from the "Iraq
Reconstruction Fund".

~~~
atombender
How is this whataboutism relevant?

~~~
anoncoward111
Because many people smoke weed, but only some are jailed for it.

THAT'S why whataboutism is important. Enforcement bias.

~~~
asdsa5325
Because not everyone who smokes is caught, and some plead guilty to get an
easy sentence, laws differ based on location, and case circumstance is not
always the same? This is how the system works.

~~~
anoncoward111
"The system" is logical and ethical, in your opinion? I'm trying to call into
question here if "a crime" on paper is a crime worth enforcing.

When the black man in New Orleans is thrown in jail for smoking weed, but the
black/white/asian male in Iowa goes unprosecuted, how much of a crime is the
crime really?

You either need 100% prosecution or 0%. Murder is murder, fraud is fraud,
isn't it?

------
hulton
Holmes is a charismatic delusional sociopath. Potent mix.

------
aphextron
Between this and Manafort being sent to jail, what a wonderful day for the
DOJ. God I love this country so much.

~~~
pm90
The American Criminal Justice system rightly faces many criticisms, especially
serious charges for being used against minorities. But yes, knowing that even
the most powerful person in the country is not above the law and can and is
prosecuted seriously, and that scammers like Holmes and Balwani are made to
pay for their crimes.... this kind of thing is certainly what makes the US
unique among nations.

~~~
jonnycomputer
it is also what makes this country great. not that someone like Trump
understand that. For a society to function harmoniously, it must believe that
their society is just, and that those who commit crimes will face justice,
whether its pusher on the street, or the President of the United States, and
that, not only will justice be served, but clemency granted in equitable
fashion when so deserved.

For those interested, here is an interesting essay that touches on some of
those issues [https://www.lawfareblog.com/donald-trumps-pardon-power-
and-s...](https://www.lawfareblog.com/donald-trumps-pardon-power-and-state-
exception)

~~~
jonnycomputer
The moderation on HN is so capricious that I think I'll no longer participate.
My stupidest and even insulting comments get upvoted and my thoughtful ones
downvoted. Whatever. Good bye.

------
eternalban
What about all the MIC heavies on the board.

------
dibstern
People were defending Theranos on HN... surely must have been an investor or
an insider. Surely no one else would be so daft.

------
mchannon
I have been in this exact place before. For the two of them, this day will be
just about the worst of their lives.

This is ordinarily when hard-core criminals are taken into custody. If their
experience was like mine, they had to show up in front of a magistrate with
their lawyers, plead not guilty, then go to a dungeon for about 30 minutes
while they get handcuffed, fingerprinted, mugshotted, and DNA-swabbed. Then,
off they go until trial. It's basically like being free, but you have to stay
out of trouble and report all contacts with law enforcement.

Being rich (or from money), they won't have to worry about federal defenders
or CJA representation, which wouldn't be near as bad as dealing with a state-
funded public defender. There's a small chance they'll have to go this route
anyway, since the government can snatch the money in dispute and block you
from spending your ill-gotten gains on high-priced legal representation.

Don't let the "sticker price" fool you. They're not going to have to serve
consecutive 20-year terms for what they're accused of, even if they take it to
trial and get found guilty.

They will probably get their first plea offers in about a year. Most people
take the plea. In the event they refuse to plead guilty, trial will probably
take about 2-3 years from today.

Holmes will be offered, I'm guessing, about 6-9 months and a joint-and-several
"money judgment" (restitution + forfeiture). Balwani, about 5 years and a
joint-and-several "money judgment". This may be a package deal too, so Holmes
may not be able to take it if Balwani won't. Why the discrepancy? The 28th
amendment hasn't been ratified yet.

Before my experience with this world, I would have been eager to join in the
collective bloodlust, with the pitchfork-and-torch crowd clamoring for these
overprivileged defendants to sit through a trial and rot in prison. Take it
from me: I wouldn't put my worst enemy through even just the trial.

~~~
smallgovt
Can you expand on your experience with indictments like this?

It rings true to me that, in general, the average person would have much more
compassion for 'bad' people in 'bad' situations if they could live a day in
their shoes.

~~~
mchannon
mattchannon dot org.

Eerily similar experience, down to the charges and the 11 counts.

I don't disagree, but the average person on a jury just does what the lady in
the skirtsuit tells them to do so they can get out of there. Most people you
want on a jury throw away their summons with zero risk to the practice.

~~~
seibelj
I looked into your case a bit and I agree your sentence is unduly harsh. You
fraudently redeemed rewards for a bunch of fake people and make $100k, I don’t
feel like this warranted everything that happened to you and your family.
Sucks to be made an example of :/

~~~
mchannon
I know you're trying to be nice, but I think you missed something.

"Mr. Dufresne, you killed your wife and her lover, I don't feel like you
should have gone to Shawshank."

------
jason_slack
Anybody have a link that talk about Holmes, personality, career, why she is
special, etc. I have heard she is referred to as the next Steve Jobs...

Actually this has enough info for most people:
[https://en.wikipedia.org/wiki/Elizabeth_Holmes](https://en.wikipedia.org/wiki/Elizabeth_Holmes)

~~~
hawkice
Steve Jobs definitely wasn't engaged in criminal fraud, so the prosecutor will
definitely be trying to demonstrate she wasn't "the next Steve Jobs". Given
what we know we should hear that prosecutors' argument.

~~~
jason_slack
Why the down vote, she is referred to as the next Steve Jobs:
[https://mashable.com/2018/03/14/elizabeth-holmes-theranos-
se...](https://mashable.com/2018/03/14/elizabeth-holmes-theranos-sec-fraud/)

~~~
hawkice
Because being popular doesn't make you above the law. The comment is at best
irrelevant, at worse morally noxious.

~~~
jason_slack
But I asked why is she considered that way. I’m not saying she is special but
why do people say she is the next Jobs.

~~~
gaius
_but why do people say she is the next Jobs_

Because she put considerable effort into fostering that impression, even
dressing like Jobs in the same trademark black turtleneck sweaters he always
wore. All part of the con.

------
verylittlemeat
So much for the conspiracy theory people were floating here about her being
protected by her influential family and powerful connections.

~~~
scottwernervt
We will have to wait and see what deal they make if pleading guilty.

~~~
cat199
And what cushy behind-the-scenes appointments they get after 'doing time' by
playing golf at a minimum security resort for 6 months.

