I'll always be shocked that she was guilty of deceiving investors and not patients. Investors made a large financial bet while patients engaged in a routine medical procedure. To me it's obvious which group needs protection and which had a right to certain expectations.
This was a common refrain when the verdict was first announced, and I think it absolutely misses the point.
Legal outcomes are about what you can prove. It was very clear that Holmes said "Our product can do x, y, z" to investors, and it's also totally clear she knew this to be false at the time, and it was material.
The evidence that she, personally, was guilty of defrauding patients directly was always reaching in my opinion. I followed the trial closely, and were I on the jury I would have voted for the same outcome.
The thing I really don't like about the line of reasoning is that it's essentially emotional at its heart: investors are rich and knew they were taking a risk, while patients are the ones who need protection. That may very well be true, but you don't get to just make up outcomes because one group is more powerful than another. The prosecution just failed to prove beyond a reasonable doubt that she was guilty of defrauding patients.
> The evidence that she, personally, was guilty of defrauding patients directly was always reaching in my opinion.
"It was totally clear she knew her products could not do x, y and z. She facilitated and approved and enabled sales of these products that could not do x, y and z, to providers who were going to use them to perform x, y and z tests on patients, tests that they could not do."
This WSJ interview with a juror gives a very good explanation in my opinion. Again, verdicts are about what can be proven:
> Though they initially were divided, jurors soon agreed to acquit Ms. Holmes on the one count of conspiracy to commit wire fraud and three counts of wire fraud tied to patients, Ms. Stefanek said.
She said the jury concluded that prosecutors didn’t present enough evidence to show that Ms. Holmes knowingly pitched a faulty product to induce patients to pay for tests.
> The jury was in agreement, Ms. Stefanek said, that the Theranos lab was run shoddily and not in the way to be expected from a company setting out to achieve the highest quality in medical care. But jurors thought the burden of proof on defrauding patients was higher.
> “If all we’d had to prove was that she knew there might be problems in the lab and that might end up harming patients, that would be one thing,” Ms. Stefanek said.
I get it. But I admit I'm also on the side of healthy skepticism when it comes to anything around her. Have not followed the trial closely (which is on me), but read a lot of the articles and books and such.
To me it's direct correlation.
"If she knew there might be problems in the lab" - the only problem in the lab was the machines themselves! The blood work is known science - the issue was getting to a point where accurate blood work could be done. Which involved the machines, the machines that they separately demonstrated she knew did not and could not do 'x, y and z'. And to be clear, in your example, x, y and z are "extract sufficient blood for an accurate test", "extract blood in a way that allows for an accurate test (i.e. absent over-dilution, contamination)".
To also be clear, this can be entirely a failing of the prosecution too - but it seems there's this sense of "there's this missing -glue- that we couldn't prove", but the lab IS the machine, and if she knows the machine can't do x, y, z, then it follows that the lab can't do x, y and z. There are only two outcomes from the machine, and lab, an accurate result, or an inaccurate result (or inability to provide any result). And then if you say "My machine cannot do x, y and z", then it cannot provide accurate results (at least not by design, stopped clocks and all that). Then you get to a conclusion that her argument would be that "an inaccurate result doesn't inherently harm a patient", and convoluted logical leaps of "because the result would lead to further testing and interventions", but there was presented at trial concrete evidence that unnecessary, and harmful, interventions were ordered/performed, on the basis of the lab results from those machines.
If that’s the bar for emotional then all laws are emotional once you get down to it. The poster has the implicit value statement that the least powerful need the most legal protection, which is certainly a common cultural value in the modern West.
I mean, even the idea that a third party needs to come in and administer punishment when one group defrauds the other is an emotional statement. You could just as easily argue that they all should have vetted theranos’s statements and not taken their word on it
Well, we disagree on what would qualify as "emotional statements", but I don't think that's the central point.
If one wants to argue it was unfair that she was guilty of a crime against investors but not patients, that's a fine and good discussion to have. I'm just pushing back against the comment I was replying to, "I'll always be shocked that she was guilty of deceiving investors and not patients." I think the evidence showed their was clear deceit against investors in a way there wasn't against patients.
I can’t see how being fraudulent about the product working at all isn’t clear deceipt against the patients paying for a product that worked as described. Her fraud wasn’t centered solely around investor specific facts like the financial health of the company
I see what you’re saying and the juries opinion there. I just do not agree with their assessment
> Though they initially were divided, jurors soon agreed to acquit Ms. Holmes on the one count of conspiracy to commit wire fraud and three counts of wire fraud tied to patients, Ms. Stefanek said. She said the jury concluded that prosecutors didn’t present enough evidence to show that Ms. Holmes knowingly pitched a faulty product to induce patients to pay for tests.
I don’t know the word for it, but this fits a type of behavior I’ve observed where people will break a behavior into a series of actions and since each action on its own is not a problem, then the behavior represented by the set of actions is deemed not problematic. Her company sold a product alleging X performance when she knew that this was false. Her product was then sold to people looking for a product that had X performance specifically because it was so beyond what any competitors had come up with. It was not a commodity good that they just happened to have purchased from this one vendor and didn’t care about the fraudulent performance claims.
There is no way I could not see this as fraud. I don’t disagree with the facts you’ve presented, I’m making a value judgement
But laws can't apply to behavior, only actions - there's no way to prove behavior. Otherwise Elon would be having a lot more trouble ;)
In a general sense, this is why there will always be the concept of a loophole, and there will always be those that take advantage of it. Going through every trick to reduce tax liability from millions to 0 seems like behavior that is defrauding the government, but no actions are actually provably defrauding the government.
> That may very well be true, but you don't get to just make up outcomes because one group is more powerful than another. The prosecution just failed to prove beyond a reasonable doubt that she was guilty of defrauding patients.
Arguably, court procedures and standards of evidence are also made up and prioritize certain powerful groups over others.
Which isn't to say that we shouldn't have rules, I'm just not sure appealing to the rules invalidates a claim that the outcome was unjust.
The whole point of standards of evidence and court rules is to diminish the importance of influence.
Those rules and standards also don't "prioritize" people with finances: there is nothing in any rule or standard that says "give priority to people with more money". The exacting nature of the system does mean expertise is worth money, but that's not an explicit design goal of that system.
I skimmed through some of the court documents at the time, and from what I recall, it wasn't a question of which group was more "deserving of protection". It came down to a legal argument about the specific elements of the charges that were brought.
Holmes and Balwani were charged with wire fraud, which specifically requires defrauding another of money through a deceptive scheme. Even proving that Theranos deliberately lied to patients about the accuracy of test results doesn't quite meet this bar, because the patients weren't the ones paying and therefore weren't the victims of fraud.
But the health of their bodies and their expectation and reliance are considerable and have value in a court of law. The patient has a potential liability from the scheme and therefore very well could have been defrauded though perhaps not criminally so.
I don't think GP is disagreeing with you about what the law currently says but is lamenting that current law is in fact written this way. Regardless of the legality, it feels wrong (to me at least) from a moral standpoint that investors were better protected from the fraud in this case than the medical patients were.
That's all well and good procedually. I think the objection is not about the technicalities of the due process but the manner in which it seems to currently be optimized - results wise.
It is very true as you say that it was easier to prosecute for wire fraud with evidence available so that's what they did. Maybe we should reevaluate what the system prioritizes making easy and what it makes hard. Don't you think?
"That's all well and good procedually." Which is all I was referring to.
"Maybe we should reevaluate what the system prioritizes making easy and what it makes hard. Don't you think? " Doesn't matter what I think at this juncture. The lawyers did what they could effectively do.
You can be 'right' at some normative level, you can be effective at a practical one. Rarely in life do you get both with any consistency.
To me it seems that the practical application of the US legal system appears to be wildly evolving in all manner of directions lately rather than ossifying. But I am also not a law student.
The populace certainly appears to be preoccupied with other areas of focus than what is discussed here I'll grant you that. Otherwise I don't really get why things couldn't be different. Perhaps that's what you mean.
Ultimately, courts follow the laws as written by Congress or the relevant legislative bodies. The recent decades of partisan gridlock are putting judges in uncomfortable positions.
IMO that is part of the problem. The courts often even bend backwards to follow the laws as written by the legislature rather than follow the constitution. You end up with insane interpretations, such as a federal law allowing prosecution of someone growing locally sourced pot seeds and smoking the product somehow being interpreted as interstate commerce.
Another utterly bizarre one is merely the act of walking within 1000 feet of a school with a gun in hand is considered interstate commerce under the gun free school zone act. No matter if the act of was completely devoid of commercial nature.
The point is that wire fraud is apparently a much more serious crime than fraudulent medical practice, otherwise the fraudulent medical practice would be much easier to sue for. The problem is the law, not the prosecutors.
> The point is that wire fraud is apparently a much more serious crime than fraudulent medical practice, otherwise the fraudulent medical practice would be much easier to sue for.
That does not follow, at all.
The US Attorney's office cannot bring charges against violations of state law, and medicine is largely regulated by the individual states in the US. Additionally, the evidence in a particular case might make it easier to prove some charges than others. That's not a value judgement that one crime is "worse" than another. That's just reality.
The Feds prosecuted Al Capone for tax evasion -- not because anybody thinks tax crimes are more serious than murder, but a) that's what they had jurisdiction over and b) it is what they could prove in court.
I always thought it was interesting feds don't have jurisdiction over most murder as it doesn't fit into one of the constitution approved uses of the federal government, but somehow merely sawing down a shotgun barrel or feeding crops you grow to your own animals is considered 'interstate trade' and thus subject to federal law. As if murder doesn't have effect on interstate trade at least as much as Filburn's crops did.
For many of these proceedings, the DOJ will pick whichever charges are the most likely for a jury to convict (i.e. simple & unambiguous crime) rather than the most harmful. Once the guilty/not-guilty determination is made, then a judge can (usually) apply discretion to take into account aggregate harm to all stakeholders during sentencing.
For another prominent example: Al Capone's tax evasion.
I don't recall any patients being hurt by their technology, since they took "real" blood draws and ran analyses on those. I presume those analyses were what made it into whatever lab report.
So suppose they screwed up 2% of their cases because they weren't licensed to do this (or did they forward to qwest?) You would still have to find victims to make a damaged claim.
The investor damages story seems more straightforward from a legal perspective, but IANAL.
They did find some victims - they told a cisgender woman that she had prostate cancer, despite not having a prostate. Think there were some other pregnancy and miscarriage scares.
But I have to wonder how often Quest screws up there tests, like if you wanted to find people upset about a mistake Quest made, you could probably find some.
I agree that the false positives (I wouldn’t call these mistakes, and certainly not screw ups) might be about as common as with other companies. After all, they often more or less did the same tests (but IIRC, ¿sometimes? with samples that were too small to work well)
I also think it would be much harder to prove intent to hurt than intent to defraud investors, making it easier to prosecute for fraud.
From what I remember (from the book Bad Blood), most patient uses fell into one of two categories: either they were drawing a large draw, running on their machines and traditional machines to check correctness, and giving what they deemed correct from these (likely the traditional machine answer), or they were just outright running large samples on traditional machines with no attempt to do anything new.
I think there were a few cases of patients getting the wrong results, maybe they were correcting later, but all in all it was not a huge issue for patients given how it was running in practice.
This is not to excuse the practices in any way, but I do get why the focus in the trial was not on defrauding patients.
That's one of the things they were doing, but the other machines they were using weren't designed or tested to use diluted samples. At least the sensitivity of the test would suffer, but really it's out of spec and so unknown.
That's an interesting observation. My guess is that the financial statute (wire fraud IIRC?) was easier to prosecute due to being somewhat quantitative and, being used a lot, easier to prosecute with lots of precedent, procedure, and judges with experience in such cases. While hurting patients (is it even "malpractice" when you're not a doctor?) through out and out fraud is probably much harder and probably has lower penalties since in many medical cases "fraud" is fuzzier.
But IANAL -- this is just my reasoning about this interesting question as someone who's run companies in the life sciences.
> is it even "malpractice" when you're not a doctor?
Also malpractice is a tort, not a crime. You can sue over it, but the state does not prosecute it. This came up in the case of Christopher "Dr. Death" Duntsch [0]. He ended up being prosecuted for "aggravated assault with a deadly weapon" but it was maybe the first(?) time that assault had been used for medical malpractice.
Upon reflection, I suppose it could be ordinary consumer fraud to promise one thing and provide another, but my understanding is they drew a cylinder of blood "for verifying the new technology" and then when the new thing didn't work (or wasn't even tried) they could send back the "reference" readings from ordinary instruments, therefore not actually defrauding (or harming) any patients.
There was clear evidence that she had personally defrauded investors. The evidence for individual patients and personal culpability was much less direct.
Prosecutors went with what they could easily prove.
The medical malpractice part is the purview of the FDA, and they did gave her and Theranos plenty of light slaps on the wrist for their transgressions over the years. Things only really got serious when the Waltons, Rupert Murdoch, Betsy DeVos, Larry Elison & co. lost money and convinced the DoJ to get involved.
They were running a handful of tests on their proprietary machines. They were also diluting blood samples and running them on off-the-shelf machines. (cf. WSJ, the Dropout podcast)
I wonder if patients were not direct customers might be the technicality, whereas they had to go through Walgreens or similar, but I also haven't figured it out.
See also vaccine manufacturers for an example about how it isn't about the patients. They are legally immune from prosecution under the PREP Act for anything that unintentionally goes wrong. You also can't sue the FDA for approving any drug under Emergency Use Authorization.
As for the vaccine court created to handle payouts from harm, it has only paid out 29 times in the last decade. I might believe the vaccines are safe - but 29 payouts (<6% of all filed claims) in a decade seems way too low by any statistic. The proof of harm seems insurmountable.
That statistic could equally be cited as evidence that vaccines are overwhelmingly safe but are plagued by widespread, unfounded belief that they cause harm. It certainly isn’t insurmountable proof that they cause harm. If you want to prove that vaccines cause harm you will need different data.
If you read the article, experts say that the statistic is rather due to the extremely high amount of red tape required to even file a claim (you basically need a lawyer). Plus, the idea of paying a niche lawyer for less than 6% chance of success is enough to make everyone give up, and not everyone can afford said lawyer because it is so complex. You also must provide a medical basis and explanation for how it happened (otherwise it's legally just a coincidence), which requires additional paperwork by doctors, hospitals, and so on. And last, all claims must be filed within 1 year of the vaccination, so if you develop something, say, 10 months later, you have only 2 months to figure out the mess and file the claim. If it took you 3 months to put the medical basis together - too late.
Plus, it's just common sense. Even by the official statistic of Thrombosis happening in "4 cases per one million" according to the CDC (as one potential side effect), that would indicate we should have 896 cases at a minimum, let alone authorized payouts.
Vaccines kill a few dozen people and harm a few hundred a year while saving literally millions of people from death and severe harm. They are one of the greatest advances in medicine.
It seems like you can’t make up your mind whether you’re trying to prove the government is doing a bad thing or whether the vaccines are unsafe. For the sake of argumentation, let’s say that the 4 cases of thrombosis per million is accurate, and all 4 cases are very severe. In that case, yeah, we should probably see more court settlements in favor of patients, and the government is doing a bad thing.
However, if only ~900 people in the whole country have a severe reaction to vaccines but they save millions of people annually by preventing deadly and debilitating diseases, then you’ve shot yourself in the foot! That statistic is strong evidence that vaccines are very safe and likely produce more good than harm!
"Unintentionally" is doing a lot of work there. This is to incentivize pharma makers to create vaccines without having to worry about spurious lawsuits. If they commit some kind of outright fraud, selling substances that aren't what they say or fabricating research results, they're still liable. This isn't much different from the way medical malpractice works. You can't (successfully) sue a doctor who performed open heart surgery on your husband because he died afterward, in most cases, because it's a risky procedure and that risk is something you have to accept. But if they were drunk while performing the surgery, you can absolutely sue for that.
In this specific case, though, there isn't necessarily this kind of informed consent. People can be legally mandated to get vaccines, so it would make no sense to hold the company providing the vaccines liable. The entity creating the mandate, in this case the government itself, should be the one liable, and they are.
Your number doesn't mean a whole lot, either. The most dangerous vaccines are for things like malaria and anthrax that typically only military members get, and when they end up harmed, the VA pays them disability benefits. There are way more than 29 people getting VA disability because of events like this.
You're speaking really about the National Vaccine Injury Compensation Fund. If someone is harmed by a vaccine the maker is immune from suit, but they can apply to the NVIC, which has paid out to some. However the difference is that the NVIC uses tax dollars to pay those claims. The drug companies themselves are immune.
In business terms it's a win, but not very much for the public.
I believe it’s a win for the public, government mandates many of these vaccines and while they have extremely low risk, it’s still non-zero. The last thing we need is a bunch of spurious lawsuits finding sympathetic and uninformed jurors driving up the costs for everyone and scaring the public into refusing them. In the US we have plenty of that already.
> In business terms it's a win, but not very much for the public.
It's a win for the public, because the public cost in medical bills, insurance claims, medicare, suffering, and death from vaccine hesitancy far outweighs the cost of highly infrequent payouts.
Right. I'm not trying to make an anti-vaccine point or anything like that here. I'm simply saying that 29 payouts in a decade, even with ridiculously low odds of injury, is still way, way, way too low and it lacks justice. Showing it really isn't about patients - if you get hurt, you'll never be compensated, too bad. Just like Theranos. You got hurt - too bad.
This seems like apples and oranges to me. Theranos was lying about having a working product and I don't think there were many patients actually hurt, since they still used other products that were already available to have the appearance of something working, but I digress. In the case of vaccines, there is a product that thousands or millions of people take, and some small minority of people have some anomalous reactions. If you are one person that has a serious reaction to a vaccine that millions of people have had just fine, should you be compensated? I can see if it affected a large percentage of people, but where to draw that line I don't know, but then it shouldn't have made it past enough red tape with the FDA to be so widely available.
I went to a day of her trial (there were no high-profile witnesses that day, so it was easy to get in). It was excruciatingly boring, like most trials and unlike trials on TV. Her chair was noticeably higher than everyone else's at her table, although she's not especially tall (5'7").
Prediction: 18 months. On hold until all the appeals are exhausted.
Federal sentencing is pretty straightforward - they use a chart that looks like "times tables" from 5th grade math class and just add up all of the points associated with the crimes she was convicted of. Holmes is far more likely to do 20+ years than 18 months.
Great link! Where did the money go exactly? If the investors invested in her company, and the company didn't really make any investments itself, isn't there a pile of money somewhere where they can give it back? If much fewer dollars were "lost", does not that lower her sentence drastically? Like to that 1x1 times table square?
They had a big office right on Page Mill Road (and maybe still do), which had to be horrendously expensive. Also all those salaried professionals. I don't think there's any big pile of money to give back.
Right - they had a beautiful campus and thousands of highly-paid employees. Add in all of Holmes' and Balwani's expenses and there isn't anything left to give back.
How about a friendly bet then, I'll donate $10 to the charity of your choice if her sentence is under 15 years and you can donate $10 to the Leukemia and Lymphoma Society (https://www.lls.org/) if it's over 3 years?
Yeah if it’s more than 3 and less than 15 we’d both donate. And yeah, just prison time, if she gets 24 months in prison and 24 suspended, you’re off the hook. I still like my odds!
The prosecution only even asked for 15 years, so I'm pretty sure you're going to be donating, mikey! Probably I will, too.
For your $10: the money's really intended for Lighthouse Ministry (lfrad.org), but in case they don't have their formal IRS 501(c)(3) status yet, you can give to Martha's Kitchen
and mark the donation as "for Lighthouse". They are a "financial sponsor" for Lighthouse, which is a term that has some kind of legal significance I don't understand, but I know the money will get there.
Why on hold? That's another example of rich privilege. Why should she have her sentence delayed until all appeals are exhausted? Non-rich people are not typically afforded such luxury, it's off to jail immediately.
> Why should she have her sentence delayed until all appeals are exhausted?
Because the legal system would grind to a halt if everyone got their day in court, but chugs along just fine if only a small privileged group is given full protection under the law.
It's the same reason why Snowden is hiding in Russia, while another prominent individual who stole classified documents hasn't even been arrested.
> another prominent individual who stole classified documents hasn't even been ...
Close watchers of the case assume timing of an indictment to be predicated on minimizing risk of civil disorder. Therefore after mid-term elections, and as early as practical before 2024 campaigning ramps up:
Could be noise (it often is with him) but Trump's mentioned—today or yesterday, I think—Nov. 15th as the date for some "big announcement". It's been expected that he'll announce his 2024 candidacy at some point, to try to head off indictments or other legal trouble, or at least make more political hay out of them. Might be that's what he's got planned for that day, if he expects an indictment after the noise from the midterms dies down. Far enough out not to make the midterms a referendum on him (that is, GOTV for the other side by accident) like it might if he announced today or earlier, and early enough to slip in before the DOJ feels comfortable issuing an indictment because there will surely be all kinds of disputes going on. Maybe even timed well to ride that disinfo wave for some free publicity.
Lock her up and throw away the key. What she did was incredibly perverse, disgusting, and immoral. She proved to millions of women that they too can get ahead, for a little while, by cheating, cajoling, and scamming their way to the top.
For women needing role models, she set them back greatly.
Did the company actually believe that the breakthrough could be made? That is a huge distinction between a scam and a scientific experiment that did not yield positive results. It did become an outright scam after a while, though.
Moral of the story: don't mess with extremely rich people's money unless you yourself are also extremely rich.
> I’m not the only person. A lot of the people in the Valley were skeptics. The venture capitalists didn’t believe her for a second. She’d wave her arms and they’d say, “We have to know how this works.” And she’d say, “It’s a trade secret.” And they’d say, “Get out of here.”
> No. I just thought everybody was crazy. I mean, look at the board, that’s insane. That’s not corporate feasance, that’s malfeasance to have a board that knows nothing about any of this.
Contrarian opinion: the real villains in this story are the morons who advised a twenty something college genius to go after patents and pursue a strategy of developing in secret.
I am still very suspicious that she will not go to prison. I was frankly shocked that the jury found her guilty. She has a lot of privilege, and Justice has been shown to very kind to such people.
Almost no one beats federal charges, because if the they're coming after you they'll have an airtight case before you ever go to trial. They'll put the screws to everyone you know, your bank, your dog, your coffee shop to get the evidence they need. If they think there's even a chance you'll beat the charge, they just don't bring the case.
[EDIT] If you disagree, I'd suggest you read a bit that Ken White has written about federal prosecutions. Basically if they really want you, they'll trip you up in interviews and charge you with lying to the FBI.
> I'd suggest you read a bit that Ken White has written about federal prosecutions. Basically if they really want you, they'll trip you up in interviews and charge you with lying to the FBI.
This is just another reason to take the wargames advice when it comes to talking to the police:
Yeah, for sure. Even if you just want to be a good citizen it's in your best interest to steer clear of FBI questioning in general. They'll squeeze you hard if they think you know something valuable, even if you in fact know nothing. They're incentivized to do so, and face no repercussions if they're wrong.
I'm curious what these trip-ups look like, if anyone has the relevant info to share here. It seems easy to make the argument that the FBI is just tricking people, but I suspect that the lies people are caught in are much more sinister.
> a federal jury found Stewart, who maintained her innocence, guilty of conspiracy, obstruction and two counts of lying to federal investigators (a securities fraud charge was dismissed)
The original charge didn't stick, but they convicted on statements made to the FBI during the investigation.
As the other comment pointed out, they have a set of very particular facts and will press you with questions about dates, times, amounts, who, what, where, and when. If you say a not true statement about one of those things they charge you with lying. The relevant law is 18 U.S. CODE § 1001. It's 3 pronged and the 2nd says "makes any materially false, fictitious, or fraudulent statement or representation; or". I don't believe there is a requirement in this law for criminal intent, caveat IANAL.
Suspects often trip themselves up lying to federal law enforcement officers about stuff that's not even really sinister or criminal. They tell small lies to avoid embarrassment or make themselves look better. People tell little white lies all the time in regular conversations and find it hard to break the habit when being interrogated by the FBI. Then when they get caught in a minor discrepancy they double down with bigger lies and dig themselves into an even deeper hole.
The conviction of Martha Stewart didn't relate to any of the principal claims made against her but rather fell under the catchall "obstruction" and "lying to investigators". That she, rather than many of her much more connected and culpable contemporaries, went to prison is something of a travesty.
Anyhow, it belies the notion that privileged white people don't go to prison. I actually know someone who did, and it wasn't for some catchall gotcha charge.
I'm willing to put money on the line right now saying that Lizzie will go to prison.
Five months at the most comfortable female prison camp and five months on her horse farm? That's not exactly doing hard time. Also, Martha's crimes compared to Holmes were a lot less severe. I contend that you or I would have faced a much harsher sentence.
Maybe I am taking crazy pills, but even Unabomber at his unshaven peak (far from what most people would consider photogenic) was appearing more sane and photogenic than Holmes in her own promo photoshoots.
Agreed with your ultimate conclusion though. No matter how you stack the cards here, I had a gut feeling that she would make it out just fine, with Sunny being scapegoated as the "manipulator". Don't get me wrong, I believe he deserves at least just as much blame as Holmes. But he stood no chance.
I didn't go to Sunny's trial, but it didn't seem to generate much drama.
The idea that he was the manipulator is a "finding of fact" in legal parlance. She can't raise that on appeal. Maybe if the defense tried and the judge refused to allow it, that could be appealed as an "error" and thus appealed. Offhand I don't think that happened in her trial, but I could be wrong (?)
Only a new trial could bring that up. An appellate court could order a new trial; that happens sometimes.
And, of course, in the sentencing hearing, they can try to blame Sunny. I don't think that reduces her sentence to zero, if it works at all.
IANAL, so someone who is: feel free to correct me.
I haven't read the trial transcripts but "manipulator" isn't really a formal term in criminal law. Even if the jury found that Ramesh “Sunny” Balwani encouraged Elizabeth Holmes to commit her crimes, that wouldn't be considered grounds for an acquittal, new trial, or lighter sentence. Adult, mentally competent defendants are legally considered to be responsible for their own actions (except for rare circumstances of coercion or threats which are obviously not a factor here).
When you consider her (mostly old male) investors, especially that pervert Bill Clinton, they weren't charmed by her stilted personality or her bizarre sanpaku eyes. They were thinking with the little head.
Bill appeared on a discussion panel with her once and Hillary's 2016 Presidential Campaign cancelled hosting an event at Theranos HQ after the leaks on Theranos (lack of) progress became public.
Please don't bring partisan misandry to HN, we're better than this.
> If I had to come up with “fair” sentencing criteria, it would be “what’s the least restrictive way we can make sure this person doesn’t pose a danger to society and people are discouraged from similar acts.”
This is a bad take imo. There's also a need for punishments to deter future misconduct by others.
If I, as a hypothetical startup founder, know that I can defraud my investors (among other things!) at the risk of just an embarrassing trial, I am much more likely to engage in fraud than if I risk GOING TO FEDERAL PRISON.
I'm generally not a huge fan of incarceration. But in the case of those whose crimes are premeditated and serious -- and who had every advantage growing up -- I think some prison time is appropriate.
Tim Draper has continued to defend her and maintain that Theranos was legitimate, and some big-name VCs appear to have gotten more comfortable cutting big checks to possible frauds. I suspect she'll have an opportunity to commit a similar crime if she's so inclined.
A lot of other frauds seem to be more about creating an aura of wonder and a cult of personality that people invest in, and they are smart enough not to make specific claims. For example, "you'll be in on the ground floor of this rocket" is entirely metaphorical if there is no floor and no rocket. "The Army is using this machine on the battlefield with Med-Evac teams" is a potentially fraudulent statement without a lot of nuance, and you can't walk it back by saying what you mean is that someone you were talking to in the DOD mentioned the finished product could be useful for them.
Agreed, but the part where we discourage similar act is very related to the prison time she will do. Anything else will not discourage other people to scam, because worst case scenario you just loose reputation and money, but best case scenario you are a billionaire.
Given how bad those scams are for society, it's the discouraging is very important, and a strong message should be sent.
How many people do you think harsher sentences would make a deterrent difference for?
The number of tech CEOs is small. Of those, what percent do you think would be ok With fraud if it were only 18 months years in prison? What is the change if it were >18 months?
Are any choices being changed at all?
I think it is basic misunderstanding of the human mind.
Another important aspect of a sentence is scaring off. When she gets 18 months, scamming people out of 1.4 billion dollar suddenly becomes a lot more attractive. Well, for attractive, innocent looking women at least.
> She’s suffered huge and profound consequences for her actions.
Such as? Any financial and reputational damage she's suffered just put her back on the same level as us mere mortals. Indeed, she's still able to afford the expensive legal team that's litigating these appeals. Something most of us couldn't do.
Here's where Techcrunch cancelled themselves because Erlich Bachman's garbage standup said "bitch", but not because they crowned Theranos as the next big thing [0].
I'll just be honest. I'm fully aware of all the fraud Holmes committed, I've read the book, etc. She deserves prison.
But as a juror I'd have a very hard time sending a mother of two very young children to prison for the rest of her life, for a crime that did not (albeit by luck) result in any physical harm. It no longer just impacts only her.
I'm not trying to justify this position in in any legal sense. It is what it is.
Cynically I almost wonder if one of her reasons for having kids was to play into exactly this line of thinking. She knew prison time was a possibility, and she made her choice.
But she's 38, and she may have decided that even an 8-10 year sentence would make it impossible for her to have children later, so did it now while she's free.
>But she's 38, and she may have decided that even an 8-10 year sentence would make it impossible for her to have children later, so did it now while she's free.
That's her decision to make, no one can stop her or anything, though that also means only very rarely seeing your child for the first 8-10 years of their life.
As a parent who doesn't enjoy young children, honestly being able to jump in at the less physically demanding ages (like 5+) sounds like a dream, if somehow it can be navigated while still paying top people to take care of them (her family can) and have them not hate you. For the first couple years with a kid I thought about how prison would have had a lot more freedom than parenthood, and yes I've been locked in a cell before (although not for years). If you get tossed in a cell with chill people it's honestly way more peaceful than a baby/toddler.
If Holmes actually wanted kids IMO it does seem like the stars align for her to do it now while the sociopathic upsides are at their maximum. There's a decent chance the baby will be shrieking in someone's face while she peacefully sleeps in minimum security bunk. She likely won't experience the tantrums, the worst of the sleepless nights, changing diapers, potty training, the worst years of illness and communicable disease, and when she emerges her children will be semi-rational beings capable of logic and physically durable and possibly even independent enough to be left alone briefly while she goes on a trip to the store or a run.
I wouldn't go this far, but I do overall agree that you can come into a child's life at 5+, or even 10+, and still have a very meaningful relationship with them.
So I really don't blame her for trying to give herself that chance.
It's mind blowing to me she hasn't run, TBH. In 20 years (the likely most she could get) she will be 58 and the kids will be gone. She could probably live in an extremely backward 3rd world shithole under an assumed name and have some chance at escaping justice at least long enough to not miss the entirety of the rest of her youth.
She must think she's going to get a short sentence.
At 38, she's not going to miss much of her youth anyway. She's going to miss her kids being young, but running away wouldn't fix that unless she runs away with them in tow. But doing that would be much harder than running away alone, and it would fuck up her kids lives as well.
As it stands, the kids will be relatively fine, the father's family is apparently wealthy. Dragging them into a life on the run in 3rd world shitholes would be doing those kids a great disservice.
Well it's a good thing then that jurors don't decide sentencing. They only have to declare her guilty (which they did). The factors you mention are for a judge to consider.
The fact that no patients were harmed, or as I understand it, in any way exposed to potential harm, her case seems common: someone promotes their new idea before they get it off the ground, fake it til they make it. Her tech didn't make it and then she lied a bunch. I don't see what years in prison solves. She is of literally no harm to society so as long as you keep her away from healthcare and money.
As a juror you're not being asked whether she should go to prison considering she's a mother of two children, that's s different question. You're being asked whether she's guilty of the crimes she's accused of.
