Yes to both. Well, not about the tax code. The Guidelines are tough, but not nearly as massive as Title 26. One can, I think, get a basic grip on them in a few working days.
But as to the sentence enhancement for perjury, yes, it's interesting. And note that the enhancement isn't limited to perjury at trial; it applies to any conduct that "obstructs or impedes ... the investigation," including making false statements to investigators.
You tell the cops "I didn't do it" at your peril if you're later convicted. I've read about cases in which enhancement seemed extremely unfair, and I recall hearing a Second Circuit judge saying with some regret in his voice during the argument in one such case that their hands were tied by Supreme Court precedent.
But I don't think it would be the least bit unfair for the judge to hold Holmes's testiphony against her at sentencing.
chancery wrote: ↑Mon Jan 03, 2022 11:41 pmNorthland, IANACrL, but I did a couple of instructive dives into the Federal Sentencing Guidelines during the Bundy fiasco. Treating Count 7 as the baseline offense doesn't mean that the sentence is the maximum provided for the that offense. It's just the start of the calculation, and if that's all there is, it's not necessarily a severe sentence.
Here's the beginning of the analysis by Mitchell Epner (@MitchellEpner) that was mentioned by Popehat in a tweet that Bob posted upthread:
[Clarifying Edit: Section 5G1.2 of the Sentencing Guidelines requires that the sentences run CONSECUTIVELY in order to reach the sentence called for by the Guidelines calculation. I understand that some media outlets are erroneously reporting that Holmes’ twenty year sentences on the three counts of wire fraud will be served concurrently. That is plainly wrong, unless Judge Dávila exercises his discretion to depart from the Sentencing Guidelines.]
"The jungle is no place for a cellist."
From "Take the Money and Run"
Whilst I agree that the whole Theranos debacle is classic snake oil sales etc.....
As far as I can identify the vast majority of the fraud relates to VC funds not individuals and whilst being aggressive in chasing up and punishing "white collar crime" is laudable and appropriate, I feel that the penalties being tossed around are pretty egregious.
I mean, quite literally, nobody died, VC funds that should have done their due diligence lost money, no "Mom and Pops" lost money
In comparison to the Enron scandal where about 90,000 people lost their jobs (Enron and Arthur Anderson), Municipal entities lost substantial amounts of money that had direct effects downstream on budgets in cities etc and the CEO spent 12 years inside.
Mr brolin wrote: ↑Tue Jan 04, 2022 7:05 am
Not seeing equity here.
I am seeing it as a case of how much outrage you can buy when you piss off a group of well connected rich people. That she was a young attractive woman acting out of her station really helped sell the story.
Mr brolin wrote: ↑Tue Jan 04, 2022 7:05 am
Not seeing equity here.
I am seeing it as a case of how much outrage you can buy when you piss off a group of well connected rich people. That she was a young attractive woman acting out of her station really helped sell the story.
Now now.....next you'll be saying "American justice...the best money can buy......" ....
I never knew this thread existed, or I would have been posting from time to time. I currently work in the blood testing industry - I work for a traditional lab testing company, although our lab is automated, with the exception that certain tests are still done the old fashioned way with a lab tech that prepares slides from the sample. Those are primarily tests that fall in the category that we refer to as "hematology" as opposed to "chemistry" or "special chemistry". There are many categories of testing, most of which are capable of being done by a machine as opposed to having a person that is looking at the sample under a microscope.
Others have posted the absolute truth already - there is no way that what she claimed to be trying to do could ever have worked. Traditional labs use mostly Siemens equipment. Those are HUGE analyzers, not a little shoebox. You can't even pick one of them up by yourself. They use tubes of blood, not just a single drop.
How did she get sophisticated investors to put their money in? Simple. Her BEST FRIEND is (was?) the daughter of one of the most renowned investors. He has billions to burn, he can afford to go to the toilet room and flush millions and millions and he will never feel it. He invested in her company because of his daughters friendship, plain and simple. Of course, he did not publicly announce that his daughter was personal friends, who knows if any of the other investors ever knew anyone other than the fact that he invested. That was enough to get them on board.
Her machines never worked. She claimed to be able to do all 200-something tests on a single machine. The best her company ever achieved were 12 tests that could be done on one version of her machines, and most of those results were not valid. Ultimately she had ONE test that actually ever passed muster and that was for herpes. That's it. One test. Behind the scenes, in order to buy time, she was using Siemen's equipment to produce results from blood drawn from the vein, just like any other testing company would do. Her company had all kinds of excuses for why the advertisement said finger stick, but "oh, you have ONE test that needs veinous blood, so therefore we have to take traditional sample for YOU". Except YOU was, you guessed it, everyone.
What did she do after she got her good friend's father to invest? She filled her board full of political heavyweights, not a single doctor, not a single person in the blood testing industry. Those politicians were all old and decrepit - George Shultz was in his 80's. He was a bright man in his day, but in no way was he on the ball or asking the right questions in his capacity as a board member, and neither were any of the other board members.
She is a master of word salad. She duped the jury on most of the counts the same way she duped sophisticated investors. Honestly, I expected a clean sweep of not guilty when I heard that she was going to take the stand, that is how mesmerizing she can be once she starts her shtick.
Also, it came out that one juror had to be removed after being overheard saying she would not send a new mother to prison. Elizabeth is so cunning and such a psychopath that she timed getting pregnant so she gave birth right before her trial. So, there is that, too.
There's a lot of things that need to change. One specifically? Police brutality.
--Colin Kaepernick
Mr brolin wrote: ↑Tue Jan 04, 2022 7:05 am
Whilst I agree that the whole Theranos debacle is classic snake oil sales etc.....
As far as I can identify the vast majority of the fraud relates to VC funds not individuals and whilst being aggressive in chasing up and punishing "white collar crime" is laudable and appropriate, I feel that the penalties being tossed around are pretty egregious.
I mean, quite literally, nobody died, VC funds that should have done their due diligence lost money, no "Mom and Pops" lost money
In comparison to the Enron scandal where about 90,000 people lost their jobs (Enron and Arthur Anderson), Municipal entities lost substantial amounts of money that had direct effects downstream on budgets in cities etc and the CEO spent 12 years inside.
Not seeing equity here.
If there's inequity, I would suggest that it is that the Enron crew got off far too lightly. It should be noted that their fraud was one of the key drivers for the 2004 Sarbanes-Oxley reform package, which greatly increased penalties for executives who cooked the books. More people would have gone to jail and for longer terms than what actually happened.
Theranos was a fraud from the get-go. She carefully constructed her board so that there were no experts in diagnostic testing, because nobody with that expertise would have served. They all knew that what she was trying to do was impossible. Few people with that expertise spoke up called it a fraud when she was getting her initial funding because it seemed so obvious that it wouldn't work that they assumed all the investors would have immediately come to that conclusion. After a couple rounds of funding and putting together a big-name board (that had no relevant expertise but fame from elsewhere), nobody was going to stand in front of the train.
It's also important to note that Theranos actually did put lives at risk. They had started limited operations with both prototypes of the machine and with other testing equipment, and they were delivering high numbers of results with inaccurate results that could easily have resulted in incorrect diagnoses, either false negatives leading directly to patient deaths or false positives leading to unnecessary and potentially risky treatment decisions (it's a bad idea to undergo chemo when you don't desperately need it). Had they gone on to wider operations, it's a certainty that they would have started accumulating a body count.
Holmes' conduct in terms of litigation against employees, extreme secrecy, and all the rest that was well documented in John Carreyrou's book, shows that she knew this to be a fraud. All Silicon Valley companies have confidentiality agreements, but few are as threatening to former employees and disbelievers as Theranos was. Clear evidence of guilt all along.
It would be very nice if she indeed gets 65 years as some of the upthread comments suggest.
I don't think there's much question of whether Holmes was/is full of shit and duped investors. She clearly is and did. We discussed this pretty thoroughly back in FB1, especially after Carreyrou's book came out in 2018. JPC mentioned that some of his VC colleagues had looked at and rejected Theranos after doing just a cursory amount of due diligence. The lack of medical expertise on the board, the lack of verifiable military contracts and the lack of actual test data were red flags visible to anyone bothering to look.
Where I still see some controversy is the degree of criminality being attached to her BS. I think everyone agrees it was criminal, at least to some degree, and I'm glad to see that she was convicted on more than just one or two counts. But I think Mr brolin's point is important - Justice should be fair (yeah, "should" is doing a lot of the work here). How much of this trial was about protecting investors and how much was about punishing hubris, and in particular the hubris of a woman in Silicon Valley? I think it falls more towards the latter, even though hubris isn't a crime. If I look at the prosecution of Anthony Levandowski, whos hubris makes Holmes look demure and who commited not only financial crimes but actual trade secret theft, I see a very different path to justice and a very different outcome.
Edited to add: After reading JPC's post, I do agree that Enron's leadership (and likely Levandowski) should have received harsher sentences. It would be better if Holmes weren't the first poster child for harshly punishing investor fraud, but that's life.
Mr brolin wrote: ↑Tue Jan 04, 2022 7:05 am
Whilst I agree that the whole Theranos debacle is classic snake oil sales etc.....
As far as I can identify the vast majority of the fraud relates to VC funds not individuals and whilst being aggressive in chasing up and punishing "white collar crime" is laudable and appropriate, I feel that the penalties being tossed around are pretty egregious.
I mean, quite literally, nobody died, VC funds that should have done their due diligence lost money, no "Mom and Pops" lost money
In comparison to the Enron scandal where about 90,000 people lost their jobs (Enron and Arthur Anderson), Municipal entities lost substantial amounts of money that had direct effects downstream on budgets in cities etc and the CEO spent 12 years inside.
Not seeing equity here.
You make some very fair points.
I understand that this trial was limited to financial fraud. That said, we can't say that people weren't physically harmed by Holmes' crimes.
Holmes had additional victims. She was running patient's tests on her Edison machines. Those machines were insanely flawed and contaminated. There are patients who suffered needlessly because she committed fraud. While much of the harm to patients was psychological, I suspect there are hundreds of patients who didn't receive timely medical treatment because of Holmes fraud. Her lab workers routinely complained about inaccurate test results. Holmes refused to listen.
If Holmes didn't dupe investors she wouldn't have harmed patients physically, emotionally, and yes, financially. Many using her lab were uninsured.
"The jungle is no place for a cellist."
From "Take the Money and Run"
Mr brolin wrote: ↑Tue Jan 04, 2022 7:05 am
Whilst I agree that the whole Theranos debacle is classic snake oil sales etc.....
As far as I can identify the vast majority of the fraud relates to VC funds not individuals and whilst being aggressive in chasing up and punishing "white collar crime" is laudable and appropriate, I feel that the penalties being tossed around are pretty egregious.
I mean, quite literally, nobody died, VC funds that should have done their due diligence lost money, no "Mom and Pops" lost money
In comparison to the Enron scandal where about 90,000 people lost their jobs (Enron and Arthur Anderson), Municipal entities lost substantial amounts of money that had direct effects downstream on budgets in cities etc and the CEO spent 12 years inside.
Not seeing equity here.
Maybe this shouldn't be part of the equation here, but while - thankfully - no one died, what she did was disgustingly reckless. Her machines were put into actual stores where actual people were having lab work done - tests that they would then be basing potentially major health care decisions on. Yet because the machines didn't work, their test results were useless, and the decisions being made were predicated on faulty information. It's nearly a miracle that no one died. To my IANALs mind, that makes her crime all the more vile, and if she can legitimately be giving a harsh sentence based on the sentencing guidelines, then she deserves it.
Theranos was not a "tech company" as Holmes clearly had everyone stuck in the mode of believing. They were a health care company that USED technology. Just like the company I work for. Her fraud, as JPC said (much better than I did) potentially could have killed people. The only reason it didn't was because the test results her machines were producing were enough out of whack that in many cases doctors would send the patient to a different lab to redo the testing. If they had simply treated patients based on Theranos test results, she probably would have been facing even more severe charges, as there would have been a high body count. This is part of what Carreyrou uncovered and documented in his book and articles he wrote for WSJ.
She used all kinds of loopholes to get around the heavy regulation that normal medical testing labs are subjected to. But it is still shocking that it took articles published in the WSJ to get government regulators off their asses and into her lab to actually see what the heck Theranos was up to. And once they showed up at her lab for a surprise inspection, that is when her company finally came tumbling down.
There's a lot of things that need to change. One specifically? Police brutality.
--Colin Kaepernick
Should we have a different thread for the trial of Holmes' ex-boyfriend and Thernos COO Ramesh "Sunny" Balwan? His trial is scheduled to begin in Feb, but I think it's likely that the trial will be postponed because of Omicron.
If we decide to have a different thread, I suggest that this thread title be changed to "Theranos Aftermath: Elizabeth Holmes". We could title the new thread "Theranos Aftermath: Ramesh "Sunny" Balwan".
"The jungle is no place for a cellist."
From "Take the Money and Run"
Holmes Conviction Bodes Badly for Ex-Theranos President at Trial
Elizabeth Holmes’s criminal conviction doesn’t bode well for her alleged co-conspirator and ex-boyfriend, former Theranos Inc. President Ramesh “Sunny” Balwani.
The guilty verdict for Holmes makes it “extremely unlikely Balwani will be acquitted” when he goes on trial in February on the same charges, said Chris Slobogin, a law professor at Vanderbilt University. “Their actions are too closely bound together to imagine any other result.”
The Theranos founder’s jolting, disturbing allegations that Balwani verbally and sexually abused her figured prominently in her testimony. While prosecutors are highly unlikely to bring up those claims, they almost certainly will show Balwani’s jury the hundreds of text messages and emails between the two, which the government argues make them inextricably linked in the alleged fraud.
Jeffrey Coopersmith, Balwani’s lawyer, declined to comment. Balwani has denied the abuse allegations and has pleaded not guilty to charges he defrauded patients and investors in the blood-testing startup.
Many of the more than two dozen witnesses at Holmes’s trial linked Balwani -- sometimes more deeply than her -- to the same alleged lies at the heart of the government’s case about how the capabilities of the company’s technology were over-hyped to lure hundreds of millions of dollars from investors.
The government might even take some cues from Holmes’s defense: She blamed Balwani’s financial modeling for producing falsely optimistic revenue projections that investors testified they relied on.
"The jungle is no place for a cellist."
From "Take the Money and Run"
I can predict with pretty high certainty that prosecutors will NOT bring up the supposed abuse. As a matter of fact, they spent quite a bit of time and trouble to show emails and text messages that debunk the idea that Balwani in any way abused or coerced her into anything, work related or otherwise. The various written communications between the two of them make it clear that he always deferred to her every single time there was any kind of disagreement between the two of them about anything. She was pretty clearly "in charge" in that relationship. Other than her claims, there doesn't seem to be any supporting evidence that Balwani had the upper hand in the relationship. Quite the opposite. Prosecutors used all those communications between the two of them in cross examination and impeachment of Holmes. And her defense team wasn't able to come up with any texts or emails to show any kind of abusive language or attitude in his emails or texts.
There's a lot of things that need to change. One specifically? Police brutality.
--Colin Kaepernick
chancery wrote: ↑Mon Jan 03, 2022 11:41 pmNorthland, IANACrL, but I did a couple of instructive dives into the Federal Sentencing Guidelines during the Bundy fiasco. Treating Count 7 as the baseline offense doesn't mean that the sentence is the maximum provided for the that offense. It's just the start of the calculation, and if that's all there is, it's not necessarily a severe sentence.
Here's the beginning of the analysis by Mitchell Epner (@MitchellEpner) that was mentioned by Popehat in a tweet that Bob posted upthread:
[Clarifying Edit: Section 5G1.2 of the Sentencing Guidelines requires that the sentences run CONSECUTIVELY in order to reach the sentence called for by the Guidelines calculation. I understand that some media outlets are erroneously reporting that Holmes’ twenty year sentences on the three counts of wire fraud will be served concurrently. That is plainly wrong, unless Judge Dávila exercises his discretion to depart from the Sentencing Guidelines.]
I don't think the clarifying edit is correct about the operation of USSG 5G1.2 Link to USSG 5G1.2. Suppose a defendant is convicted of two counts of tax fraud (26 USC 7201), which have a maximum sentence of five years in jail. The defendant is exposed to a maximum statutory sentence of 10 years. However, the statutory maximums are not all that important to the guideline computations. The guidelines have special rules for taking into account all of counts of conviction and the defendant's criminal history and coming up with an overall recommended sentencing range. (The guidelines were intended to be mandatory, but Supreme Court precedent allows judges the flexibility to provide departures or variances from the recommended guideline ranges.)
If the guidelines called for an overall sentence of three years (and the judge did not depart or vary), section 5G1.2(b) instructs the judge to sentence the defendant to three years on each count, with the sentences to run concurrently.
If, however, the guidelines called for a sentence of ten years, the judge would sentence the defendant to five years on each count, with the sentences to run consecutively. See 5G1.2(d).
If the guideline sentence for Holmes' wire fraud convictions is twenty years or less (and the judge does not depart or vary), the sentencing for each count will be concurrent.
humblescribe wrote: ↑Tue Jan 04, 2022 5:51 pm
I wonder if the prosecutors will let slip to Sunny's defense counsel how many years they will ask the judge to impart on Lizzie.
He may not go to trial if he can plead guilty to the same charges where Lizzie was convicted and receive a corresponding deal at sentencing.
That's an interesting idea.
"The jungle is no place for a cellist."
From "Take the Money and Run"
jcolvin2 wrote: ↑Wed Jan 05, 2022 12:04 am
I don't think the clarifying edit is correct about the operation of USSG 5G1.2 Link to USSG 5G1.2. Suppose a defendant is convicted of two counts of tax fraud (26 USC 7201), which have a maximum sentence of five years in jail. The defendant is exposed to a maximum statutory sentence of 10 years. However, the statutory maximums are not all that important to the guideline computations. The guidelines have special rules for taking into account all of counts of conviction and the defendant's criminal history and coming up with an overall recommended sentencing range. (The guidelines were intended to be mandatory, but Supreme Court precedent allows judges the flexibility to provide departures or variances from the recommended guideline ranges.)
If the guidelines called for an overall sentence of three years (and the judge did not depart or vary), section 5G1.2(b) instructs the judge to sentence the defendant to three years on each count, with the sentences to run concurrently.
If, however, the guidelines called for a sentence of ten years, the judge would sentence the defendant to five years on each count, with the sentences to run consecutively. See 5G1.2(d).
If the guideline sentence for Holmes' wire fraud convictions is twenty years or less (and the judge does not depart or vary), the sentencing for each count will be concurrent.
Thanks, jcolvin2!
"The jungle is no place for a cellist."
From "Take the Money and Run"
The federal court judge set to sentence convicted fraudster Elizabeth Holmes in September ordered Tuesday that she put up property worth $500,000 to help ensure she will not flee to avoid an expected multi-year prison sentence.
The Theranos founder was convicted by a jury in January in U.S. District Court in San Jose of four felony counts, for defrauding investors in her Palo Alto blood-testing startup. Those investors lost $144 million, with legal experts saying Judge Edward Davila, during Holmes’ sentencing, may consider the entirety of funders’ losses, which the federal government has alleged topped $700 million. Holmes, the mother of a child born in July, has remained free during her legal proceedings and while awaiting her sentence.
Davila’s order Tuesday noted that Holmes’ defense team had agreed with the change.
"The jungle is no place for a cellist."
From "Take the Money and Run"
She conveniently had a baby right before her trial started. I think her sentencing is being delayed to September so her child can get the benefit of breast feeding and bonding.
I watched some videos where they went over the federal sentencing guidelines and the likely/possible "points" she will end up with.
She was found guilty of 4 of the felonies. As soon as I knew she was going to take the stand herself I figured she was a master at bamboozling pretty sophisticated investors and business people, the jury doesn't stand a chance against her. Tyler Shultz said that he would go from the lab where he saw with his own eyes how nothing worked and everything was a lie, to her office where she would manage to leave him completely convinced that everything was wine and roses, he would head back to his office and then have to try to convince himself he was seeing what he was really seeing. I'm paraphrasing of course, but suffice it to say she has a gift when it comes to manipulation.
Will be interested to see what kind of sentence she will get.
There's a lot of things that need to change. One specifically? Police brutality.
--Colin Kaepernick
Surprise surprise. The brown man who was in business for years without ever involving himself in fraud gets sucked in by pretty white psychopath and now going to pay a higher price than she will pay. I get that prosecutors do better the second time around but why not practice first on the one who never before committed these kinds of fraud in order to get the real culprit her due. The one who was told over and over again that her idea can’t work and when her board had enough of her gaslighting and was about to drop her she told them Sunny was already in agreement to come on board and put him in a position where he had a super hard choice given that he was in love with her. Well, I guess he’s learned his lesson.
There's a lot of things that need to change. One specifically? Police brutality.
--Colin Kaepernick
The Guidelines are tough, but not nearly as massive as Title 26. One can, I think, get a basic grip on them in a few working days.
This surprised me. 
Tyler Shultz said that he would go from the lab where he saw with his own eyes how nothing worked and everything was a lie, to her office where she would manage to leave him completely convinced that everything was wine and roses, he would head back to his office and then have to try to convince himself he was seeing what he was really seeing. I'm paraphrasing of course, but suffice it to say she has a gift when it comes to manipulation.
