from the the-harder-they-fall dept.
Elizabeth Holmes Found Guilty on 4 of 11 Charges
Elizabeth Holmes found guilty on 4 of 11 charges:
Elizabeth Holmes was convicted today of three counts of criminal wire fraud and one count of criminal conspiracy to commit wire fraud. The jury delivered its verdict after six days of deliberation.
The government's victory in the case is a rare rebuke for tech startups, which often pitch investors on their technological prowess and business acumen using wildly optimistic assumptions.
Theranos was, perhaps, an extreme example, raising over $900 million on the back of claims that its proprietary tests were better, cheaper, and less invasive than the competition. None of those claims was true, and unlike many other Silicon Valley startups, the health and safety of patients was on the line.
Holmes was found guilty of defrauding Lakeshore Capital Management (the family office of the DeVoses) of $100 million, PFM Healthcare (a hedge fund) of $38 million, and an LLC connected to Daniel Mosley (Henry Kissinger's former estate attorney) of $6 million. She was also convicted of conspiracy to commit wire fraud against Theranos investors more generally. On three charges, all alleging wire fraud against investors, the jury returned no verdict. Holmes was acquitted of all other charges, including those that involved defrauding patients. She faces up to 20 years in prison.
With the guilty verdict, Holmes, the founder of the company, is the first Theranos executive to be held criminally responsible for her actions, though she may not be the last.
Holmes to face maximum of 80 years in prison when she’s sentenced in September:
While she is likely to receive prison time for defrauding investors, she will be able to spend the next eight and a half months out on bail. She faces a maximum sentence of 20 years in prison for each of the four counts she was convicted of, though it’s unlikely that she’ll be sentenced to all 80 years.
Holmes has been out on bail since June 2018, when she and alleged co-conspirator Ramesh “Sunny” Balwani were charged. Both were released after posting $500,000 bonds and surrendering their passports. Now that Holmes has been convicted and is awaiting sentencing, her bond will have to be secured by property. Their trials have been repeatedly pushed back, first because of the COVID pandemic and then later because Holmes gave birth.
Part of the reason Holmes’ sentencing has been postponed is because the government still has to prosecute its case against Balwani.
2022/01/04 - Elizabeth Holmes Found Guilty on 4 of 11 Charges
2020/09/13 - Judge in Theranos Fraud Case Orders 14-Hour Psychological Test for Holmes
2019/07/01 - Theranos Founder Elizabeth Holmes to Face Trial Next Year on Fraud Charges
2018/09/06 - Theranos to Dissolve in a Pool of Blood
2018/06/17 - Elizabeth Holmes Steps Down as Theranos CEO as DoJ Levels Charges
2018/03/15 - Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud
2017/12/24 - Theranos Given Indirect Lifeline From Softbank
2016/10/06 - Theranos Lays Off 340, Closes Labs and "Wellness Centers"
2016/08/03 - Theranos Introduces New Product to Distract from Scandal
(Score: 3, Interesting) by krishnoid on Wednesday January 05 2022, @04:51AM (12 children)
Can anyone find her full 2014 TED talk anywhere? As soon as you hear a few words out of her mouth in this clip, you have to assume she either had a medical condition, surgery, or was faking it [youtu.be] ... 'bro'?
(Score: 3, Informative) by drussell on Wednesday January 05 2022, @05:36AM (3 children)
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @07:57PM (2 children)
Oh that shit is hilarious. I could only stand like 20 seconds though. What a dumb whore. She should get a reduced sentence if she agrees to be perpetually sexually available to everyone she screwed. She can't use the voice though. It's scary.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @01:08AM (1 child)
You're a creepy, disgusting person.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @01:25AM
But not wrong.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @09:23AM (4 children)
Finally saw her on a TV clip last night. Sounfs trans or a guy doing drag. The turtle neck fetish would be a convenient way to hide an adam's apple. "oh, she had a baby in the last year?" Did she actually have it, or ws this adopted/surrogate?
Because that voice just screams "I'm a guy."
(Score: 4, Interesting) by Thexalon on Wednesday January 05 2022, @02:04PM (2 children)
She's not trans: She is an assigned-female-at-birth cisgender woman.
Her low voice was something she intentionally adopted, because apparently she learned somewhere that people with internal biases against women are more likely to believe things said at a lower pitch. She might well be right about that, since her technique by all appearances worked until reality caught up with the fact that her stuff never worked.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by krishnoid on Wednesday January 05 2022, @06:55PM
In that case, I'll ruin the video forever for anyone who watches it:
Still, probably a good test for how much content a given speech actually has in it.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @11:11PM
If you pay attention to politics and media, a number of politicians and talking heads, both male and female, do the exact same thing.
(Score: 2) by drussell on Wednesday January 05 2022, @02:38PM
"Elizabeth Holmes Accidentally uses REAL VOICE !!"
(Score: 2) by Beryllium Sphere (r) on Wednesday January 05 2022, @05:06PM (2 children)
She is supposed to have "charisma". People responded like they were hearing the Voice of Saruman.
Big investors should take someone on the spectrum to meetings who can see through that.
(Score: 2) by krishnoid on Wednesday January 05 2022, @06:52PM
Or anyone who will actually wake up during a meeting and accidentally choke on a little drool when anything falsifiable and heretofore unknown is mentioned. You could even dress them in yellow so they actually look the part of a canary.
(Score: 2) by krishnoid on Wednesday January 05 2022, @07:35PM
Saruman, or ... you know, I bet this is *exactly* how [youtu.be] a few of the major investor meetings went down. You know, without the actual gunfire and physical restraints.
(Score: 4, Touché) by drussell on Wednesday January 05 2022, @05:27AM (3 children)
The whole thing was a complete sham and scam from day one, but since she's completely clueless and essentially said "you can't listen to those silly engineer type people when they say x y or z can't actually be done" because you just have to believe harder, she now argues that she somehow shouldn't be responsible for peddling complete BS.
(Score: 2) by epitaxial on Wednesday January 05 2022, @01:10PM
Wish I could find the article but some university admits they gave her a degree because of her father. She didn't even come close to completing the work.
(Score: 2) by Thexalon on Wednesday January 05 2022, @02:00PM (1 child)
She liked to pretend she was a female Steve Jobs, and that included having a reality distortion field where so long as she said it with enough confidence, it must be true.
And I'm really really surprised investors bought into this. Like, if someone made an investment pitch to me of some fancy new tech, I'd invariably say "I'll let you know soon", contact some people with a background in the field in question at some universities or something and say "OK, does this seem like something that could ever actually exist and function?" and if their rating is "it's nonsense" I wouldn't give the scammer/idiot a dime. But apparently some big-name VCs managing a lot more money than I ever expect to see in my lifetime apparently don't bother with this very simple precaution, just like a lot of investors on crowdfunding websites also apparently don't bother with that.
I don't know who the investors were that got defrauded, but my goodness, some people should be fired for that.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by Nuke on Thursday January 06 2022, @02:39PM
Among others : Rupert Murdoch, Henry Kissinger, Larry Ellison, Betsy DeVos, the Walmart owners, and New England Patriots owner Robert Kraft. Murdoch invested $125m but in 2017 he sold out for $1
Holmes went out of her way to attract big-name investors. Bad mistake - big names don't take accept being scammed lying down, and pissing off Murdock who controls newspapers including the Wall Street Journal was about the worst target she could have chosen.
(Score: 4, Insightful) by looorg on Wednesday January 05 2022, @07:20AM (11 children)
So they could perform about 1% of what they said. Did any of it actually work tho? From the article it seems that when it worked it produced a lot of errors (people having HIV when they didn't and so on) and they more or less had to be rigged to produce something.
Still a machine that can perform some tests from just a drop of blood, if it works, might still be a viable product couldn't it?
But it seems most of the charges here are fraud charges against (or from) the investors. Not that the machine wasn't working, or I guess that is why it's fraud -- or that it wasn't working to claim, not that it wasn't working at all. But it seems more about that she took a lot of money and not that the device wasn't working, or well "working" at about 1% of what was promised.
Is the problem just that they lied to much? After all a lot of companies claim their product does things that they don't really do very well or properly or does in a really shitty manner. Or was it that they lied to the wrong people, as in it's ok to lie a little to customers but not to investors (or people with money)?
The patients she, or the company, failed or defrauded didn't matter tho. They are apparently the other charges that was dropped. So I guess the lesson here is that you can defraud people as long as they are sick and poor but once you mess with the rich you get the stick?
(Score: 2) by bzipitidoo on Wednesday January 05 2022, @07:57AM (2 children)
Perhaps it's the embarrassment. The investors should've known better, they really should have. There was all kinds of evidence that Theranos was a fraud, but they wanted to believe it was real. These investors are supposed to be savvy, and an incident of this sort exposes them too. They look like a pack of idiots. She mixed the Kool-Aid. They drank it.
(Score: 2) by bradley13 on Wednesday January 05 2022, @09:05AM (1 child)
Ah, but why did the investors want to believe? First, let's state the obvious: she was an attractive young woman and the investors were guys. Second, the requirements of progressivism: female CEOs of tech companies are rare, so criticizing her would have been seen as sexist. Combine the two, and they shut down their critical thinking and opened their collective wallets.
Which was stupid, but doesn't alter the fact that Holmes lied and defrauded them. Just because you leave your house unlocked doesn't mean people are free to rob you. It's nice to see her found guilty.
Also, as I understand it, civil suits can use this judgement to support damages for patients who relied on Theranos results.
Everyone is somebody else's weirdo.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @01:33AM
It doesn't really matter if she was a woman. Narcissist gas-lighting sociopaths use whatever God gave them as talents - could be that the very, very best need to be attractive or, as you say, female, and so the ones that end up on TV are in that select class of human.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @11:02AM (1 child)
There is no longer even a pretense that people are equal. The 1%* is an exclusive club and you aren't in it.
(khallow will be along in a minute to claim that is exactly the way things should be.)
* It's actually less than 0.01%, but the 1% label has stuck now.
(Score: 2, Funny) by khallow on Wednesday January 05 2022, @06:41PM
Of course not. What probably happened here is that the fraud against patients and doctors wasn't as open/shut as the fraud against investors. At a glance, there are several ways this could fail. Perhaps it didn't meet the conditions [investopedia.com] for wire fraud.
If interstate communications weren't used to market to patients and doctors (apparently, Theranos's product was only distributed in two states - everything in California would likely not qualify as interstate wire fraud, and if Arizona products were similarly managed/marketed in state, then that's it). The hung jury charges might also have come from this.
There are some other possibilities. Alternately, maybe she wasn't involved in the advertising and marketing on the patient side, but that's a pretty thin defense. Or that perhaps the false advertising didn't meet the conditions of fraud.
For example, this story [nbcnews.com] claims Theranos was secretly running almost all blood tests on competitors' machines. In that case, it may well be that Theranos delivered on almost all of its promises to patients and doctors, which would greatly weaken the charges of fraud since the patients likely received the services they paid for.
(Score: 2) by crafoo on Wednesday January 05 2022, @03:19PM
It doesn't work at all. They would take full blood samples "just in case, to have some spare material" and just run standard blood tests on that, faking the machine results. It was all a 100% scam from day 1 to defraud investors.
(Score: 2) by ElizabethGreene on Wednesday January 05 2022, @04:18PM (1 child)
You've hit on my big disappointment with this case.
People got bad test results and made medical and life decisions based on bad data. The physical and emotional pain this caused is incalculable, and that was just written off. That sucks.
I understand the logic of it too; it's relatively trivial to prove fraud against investors. It's much harder to prove that a specific patient was harmed beyond what they would have been if things worked properly. It still sucks.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @09:35AM
It didn't suck if you made money off of it. Just sayin'. That's how it is in the bright new world.
(Score: 4, Informative) by DeathMonkey on Wednesday January 05 2022, @06:30PM (1 child)
My understanding is that she didn't defraud any end users, though.
She didn't defraud sick people because she just sent those samples out to normal labs to get the results done then lied to the investors about how her magical machine actually did all the work in a second.
(Score: 1, Informative) by Anonymous Coward on Wednesday January 05 2022, @08:03PM
as usual, many poops for you. so many poops!
(Score: 2) by krishnoid on Wednesday January 05 2022, @07:57PM
Yes! This is exactly what I want from a *diagnostic* system, of all things. In retrospect, it looks like it would have been easier to just convince an existing testing lab [questdiagnostics.com] to provide it as a consumer service.
(Score: 2) by darkfeline on Wednesday January 05 2022, @07:22AM (10 children)
Once again the big guy wins and the little guy loses. It kinda sucks that the big investment firms were scammed out of money, but how about regular people who may have gotten faulty medical tests from Theranos and been injured due to it (ignoring false negatives or getting treated for false positives)?
We'll have to see what sentence she gets, but she's got the advantage, as women receive 39% shorter sentences than men controlling for all other factors and from what I've heard she's been playing up her femininity such as dropping the deep voice she used during her Theranos reign.
Join the SDF Public Access UNIX System today!
(Score: 1, Informative) by Anonymous Coward on Wednesday January 05 2022, @09:38AM (2 children)
So who you gonna sue? Holmes? She's going to jail, and it's not like anyone is going to give her a book deal. She's going to get out of jail in her 50s. Do you really believe her new husband is going to stand by her? He's got money, he's got options, and a decade in jail ages you. And not in a "Betty White" kind of way.
Maybe she can sell Amway. (if you've been following the case you'll understand why that's funny).
(Score: 2) by Dale on Wednesday January 05 2022, @03:12PM (1 child)
I would be very surprised if she gets anything approaching 20 years. Our system simply does not typically punish white collar crime that harshly. In addition, she has no prior record and will be seen as sympathetic during any sentencing hearings. I'm guessing something in the 7-10 year range and she'll be out in 5-7. I'm not saying I agree with it, just that is the more probable outcome.
(Score: 2) by krishnoid on Wednesday January 05 2022, @08:03PM
She certainly changed her look [elle.com] to target those kinds of results.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @01:57PM (3 children)
She also got pregnant before her trial. Doesn't make any sense unless it's to gain sympathy from the court/jury.
(Score: 2) by maxwell demon on Wednesday January 05 2022, @03:13PM (2 children)
What makes you think that her pregnancy was in any way related to the trial?
The Tao of math: The numbers you can count are not the real numbers.
(Score: 1) by khallow on Wednesday January 05 2022, @06:55PM
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @09:42AM
Y'all are just jealous incels wishing you could boff the lady CEO who humiliates men like you. There's websites that cater to you, you're not alone.
(Score: 2) by Beryllium Sphere (r) on Wednesday January 05 2022, @05:12PM (2 children)
There's a detailed algorithm of points and charts to arrive at a recommended sentence. It's possible for a judge to override that and show favoritism toward a woman but it would show.
One former US attorney whose blog I follow estimated that the recommended sentence will be somewhere in the range 15-20 years.
I'm interested in criminal justice reform and I'd enjoy looking at the research you mentioned. In general, women and men get into prison from very different paths and I'm full of curiosity how the researchers controlled for all other factors and still had a sample left over.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @11:25PM
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @01:22AM
Recommendations don't mean shit. It will all come down to what the judge decides to do, which can vary widely.
(Score: 3, Interesting) by Runaway1956 on Wednesday January 05 2022, @03:00PM (1 child)
First, the whole oxycontin thing. Now Theranos and Holmes. Couple that with Google and Facebook being slapped around in the EU, and possibly in the US soon. Yes, things are looking up. It's time for Big Business to take another look at all their "business models". People don't like being ripped off again and again.
I've got an idea for a business model! How 'bout you just produce some product or service, and sell it at an honest price? No bullshit, no hype, no sneaky contracts and EULAs - just offer your product, sell it if you find buyers, and leave it at that! And honor that whole 'first sale' thing, and the right to repair.
I'm dreaming though. We have a long way to go before Big Tech and Corporate America are put in their places.
Don’t confuse the news with the truth.
(Score: 2) by DannyB on Wednesday January 05 2022, @04:52PM
It seems like building some product or offering some service, and then trying to do your very best at it, is a time honored way of doing business.
Problem: some people just want to get rich without actually working.
A ban on nuclear weapons could be enforced by the threat of use of a stockpile of banned nuclear weapons.
(Score: 0) by Anonymous Coward on Wednesday January 05 2022, @05:03PM (1 child)
Why was the media so obsessed with this case?
Are they going to drop it now or will we be treated to 'Elizabeth Holmes tweets from jail cell'
(Score: 2) by Beryllium Sphere (r) on Wednesday January 05 2022, @05:18PM
If she tweets she can get in a ton of additional trouble. Phones are forbidden and there's no real Internet access. There are kiosks for text-only messages that can be emailed to people on the outside but that's it.
Well, someone must have written an email to twitter gateway, but the BOP requires written consent from the recipient to get messages from a prisoner.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @01:57AM (1 child)
She could have made much bank, and it would have been more difficult for the MFICs to admit being fooled, if she got into Covid testing.
(Score: 0) by Anonymous Coward on Thursday January 06 2022, @09:44AM
Voting machines also may have been synergetic with the infospace platform.