# Should Elizabeth Holmes get jail time? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [March 15, 2018, 8:54pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626 "2018-03-15T20:54:08Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 17, 2018, 4:20am UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/41 "2018-03-17T04:20:04Z")
> [@Stranger\_On\_A\_Train](#): > > I don’t see how or why the US government would bail out major banks for making fraudulent estimations of risk on collatoralized debt obligations and mortgage-backed securities and yet hold no one legally accountable, but they did. > > Stranger The reason they bailed out the banks was that when one bank that was not bailed out failed, the impact was pretty substantial. No one really cares if this company fails, except the investors. Plenty of investors have lost plenty of money on plenty of companies without being bailed out. As for why no one went to jail, you got me. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [March 17, 2018, 4:36am UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/42 "2018-03-17T04:36:32Z")
The likelihood of a government bailout for Theranos is nonexistent. Theranos does not have (or appear to have) any systemic importance to the economy, its products (such as they are) are not used by the government in any quantity, and the company has just a couple hundred employees left. Criminal charges against Holmes are likely. She committed a pretty blatant multi-year fraud against her shareholders. It’s always tough to tell who will actually wind up behind bars in white collar cases, even big ones, but it wouldn’t surprise me if she ends up doing some time. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 17, 2018, 4:41am UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/43 "2018-03-17T04:41:56Z")
> [@Voyager](#): > > That’s James Mattis as in current Secretary of Defense. Matthew Yglesias: [James Mattis is linked to a massive corporate fraud and nobody wants to talk about it](https://www.vox.com/2018/3/16/17124288/mattis-theranos-board-trump), including me because he’s one of the few sane voices in the administration protecting us from pointless nuclear war with Korea. Shhhh! > [@](#): > > Now, if Boards have any responsibility, maybe some of these clowns should suffer some consequences from this scam. > [@Robot\_Arm](#): > > Responsibility is for poor people. Also the middle class, to be scrupulously fair. White collar crimes in general and high flying crimes in particular get kiddie gloves. > [@Stranger\_On\_A\_Train](#): > > Both rightfully deserve to be vilified, but I’d also like to see Shkreli skewered on a thousand rusty spikes, while I’d just like to see Holmes gently slapped with a wet trout a couple hundred times. Both are likely to come through their particular infamies and find some future ‘success’ scamming the shit out of credulous investors, because that’s how these kinds of people get on. The upthread parallels to the financial crisis were apt. The consequences of large scale fraud can be rather devastating to the economy and by extension our nation’s health, but while 6 and 7 figure frauds are the criminal’s problem, 9 and 11 figure frauds are the public’s problem. Yes, we need new laws and a bigger supply of pitchforks. I’m not even especially vengeful: I think 1-3 year sentences handed out to scores of executives might focus minds a tad. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [March 17, 2018, 11:53pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/44 "2018-03-17T23:53:29Z")
She cheated investors. People who are assumed to be knowledgeable and sophisticated. Given the number of people who went to jail after the 2008 financial meltdown (ie none), I would have a very hard time sending her to jail. ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [March 18, 2018, 12:18am UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/45 "2018-03-18T00:18:24Z")
> [@Measure\_for\_Measure](#): > > White collar crimes in general and high flying crimes in particular get kiddie gloves…we need new laws and a bigger supply of pitchforks. I’m not even especially vengeful: I think 1-3 year sentences handed out to scores of executives might focus minds a tad. While I’ve been disgusted to see light sentences being given to some of these people, it’s an illusion that “white collar crime” has little consequence. From a WSJ blog article: \*"Here are the 10 longest prison sentences for white-collar crimes. Let us know if we missed any. 1.) Sholam Weiss, 59 Sentence: 835 years Release date: 11/23/2754 2.) Keith Pound Sentence: 740 years Died in prison in 2004 at the age of 51 3.) Norman Schmidt Sentence: 330 years Died in prison in 2013 at the age of 78 4.) Robert Thompson, 47 Sentence: 309 years Release date: 12/29/2277 5.) Bernie Madoff, 75\* Sentence: 150 years Release date: 11/14/2139 6.) R. Allen Stanford, 63 Sentence: 110 years Release date: 4/17/2105 7.) Will Hoover, 62 Sentence: 100 years Release date: 5/13/2049 7.) Richard Harkless, 69 Sentence: 100 years Release date: LIFE 8.) Karen Bowie \*\* Sentence: 80 years Release date: n/a 9.) Frederick Brandau, 68 Sentence: 55 years Release date: 8/08/2047 10.) Scott Rothstein, 51 Sentence: 50 years Release date: n/a 10.) Thomas Petters Sentence: 50 years Release date: 4/25/2052 10.) Tim Durham, 51 Sentence: 50 years Release date: 1/25/2056 ?.) Keith Simmons, 48 Sentence: ??? Release date: ??? 11.) James Koenig, 61 Sentence: 44 years Release date: n/a 1. Martin Sigillito, 64 Sentence: 40 years Release date: 2/15/2047 _Notice that Mr. Madoff lands at the center of the list. Douglas A. Berman, a law professor at the Ohio State University, pointed out that his sentence has become an important benchmark. “Nobody can say, ‘Well Madoff only got 50 and I wasn’t nearly as bad,’ ” Mr. Berman said."_ \*to save you having to look up Sholam Weiss, this is part of his Wikipedia entry: "On February 15, 2000, the Middle District Court of Florida (Orlando) sentenced Weiss, to a term of imprisonment of 845 years, for racketeering, wire fraud, and money laundering, and a restitution of $125,016,656 (amount of loss is attributable to him but did not take into account any liquidated assets recovered by the receivers), and a fine of $123,399,910, in connection to the collapse of National Heritage Life Insurance Company.[2][3] On July 28, 2016, the government acknowledged by “notice to the court” that Weiss’ $125 million restitution had been paid in full." He was originally sentenced to 845 years but got 10 years taken off, which makes all the difference. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [June 15, 2018, 9:30pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/46 "2018-06-15T21:30:29Z")
[Federal charges filed.](https://www.wsj.com/articles/u-s-files-criminal-charges-against-theranoss-elizabeth-holmes-ramesh-balwani-1529096005) ---
**Author:** ![DavidwithanR](https://avatars.discourse-cdn.com/v4/letter/d/3bc359/32.png) [@DavidwithanR](https://boards.straightdope.com/u/DavidwithanR)\ **Post date:** [June 15, 2018, 9:41pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/47 "2018-06-15T21:41:25Z")
> [@Omar\_Little](#): > > Elizabeth Holmes is the defamed CEO of Theranos, that settled fraud charges with the SEC yesterday. She will pay a $500,000 fine; return 18.9 million shares of stock to her company, thus relinquishing her control; and not be permitted to hold an officer or director position with a publicly traded company for a period of 10 years. > > She is accused of raising over $700 million of equity for Theranos under fraudulent means. The company is basically worthless today. > > Let’s compare her to Martin Shkreli, famed “pharma bro”, who earlier this week, was sentenced to 7 years of prison and required to pay millions in restitution including surrendering his valuable Wu-Tang Clan album, estimated to be worth a couple of million $$. He defrauded several investors out of approx. $11 million through a Ponzi scheme. > > Does she get a pass because she’s a cute blonde princess looking girl that was backed by some of the Wall street elite. Or was Shkreli penalized not really for his security fraud, but because he’s a douche that jacked up certain pharmaceutical prices by 1000x, which wasn’t really illegal, but came off really bad. She doesn’t need jail time. She just needs to be permanently and personally on the hook for the entire 700 million. Jail is getting off lightly, to a fraud artist. Being in deep crushing personal debt for the rest of her life is what she’s really afraid of. ---
**Author:** ![DavidwithanR](https://avatars.discourse-cdn.com/v4/letter/d/3bc359/32.png) [@DavidwithanR](https://boards.straightdope.com/u/DavidwithanR)\ **Post date:** [June 15, 2018, 9:57pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/48 "2018-06-15T21:57:08Z")
To clarify my stupid sounding post: I think fraud artists such as this should just be compelled to live in society while personally making full restitution, plus paying both actual and punitive damages to every person affected, or literally die trying. ---
**Author:** ![Merneith](https://avatars.discourse-cdn.com/v4/letter/m/57b2e6/32.png) [@Merneith](https://boards.straightdope.com/u/Merneith)\ **Post date:** [June 15, 2018, 11:39pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/49 "2018-06-15T23:39:58Z")
Here’s an Ars Tech post about the criminal charges filed against Elizabeth Holmes - > **[Disgraced Theranos founder Elizabeth Holmes indicted on criminal charges](https://arstechnica.com/tech-policy/2018/06/disgraced-theranos-founder-elizabeth-holmes-indicted-on-criminal-charges/)** > > Two counts of conspiracy to commit wire fraud and nine counts of wire fraud. > [@Ars Tech link above](#): > > Federal prosecutors have indicted Theranos founder Elizabeth Holmes and the company’s former president Ramesh “Sunny” Balwani with nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Prosecutors claim that the pair defrauded investors, doctors, and patients while promoting and running their now disgraced blood-testing startup. > > In the new court filing—submitted Thursday, June 14 in federal court in San Jose, and unsealed on Friday—prosecutors allege that Holmes and Balwani engaged in a scheme to mislead investors about the state and capabilities of the company’s blood-testing technology and defrauded them out of more than $100 million. The prosecutors also allege that the pair defrauded doctors and patients by knowingly misleading them with false advertising and marketing that stated that their company could provide accurate and reliable health tests on just drops of blood from a finger-prick with their proprietary technology. The suspiscions that Holmes was getting off lightly compared to Martin Shkreli appear to be unfounded. OTOH - the suspicions about the people who threw money at Holmes remains plausible. > [@Ars link again](#): > > Meanwhile, WSJ reporter John Carreyrou recently revealed that [Holmes was seeking Silicon Valley investors for a new start-up](https://www.vanityfair.com/news/2018/06/elizabeth-holmes-is-trying-to-start-a-new-company). She very well may have good luck, given that some of her previous investors [still support her work.](https://arstechnica.com/science/2018/05/check-out-this-surreal-chat-with-theranos-investor-who-says-hes-thrilled/) No fool like an old fool. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [June 15, 2018, 11:53pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/50 "2018-06-15T23:53:08Z")
> [@Stranger\_On\_A\_Train](#): > > …the reality is that she was very good at sussing out what investors were personally interested in and promising to deliver with enthusiastic but non-specific claims and purported proof-of-concept that were falsified or grossly exaggerated evidence; a medical “Music Man” as it is, albeit without any clear endgame. I think the _Music Man_ analogy is a good match. Holmes charmed investors and the public in much the same way Harold Hill charmed River City, with the same lack of substance behind it. If only Liz had met her Marian, it might have been different. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [June 16, 2018, 2:15am UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/51 "2018-06-16T02:15:19Z")
What I’m wondering is how early did the fraud begin? At one point, she was a Stanford undergrad with a neat idea who dropped out to pursue it. By itself, surely not such an unusual story. I’ll bet half or more of the students (and faculty) at Stanford are looking for a gold mine. But surely she had some proof of concept that she used to demonstrate the validity of her idea, and which convinced the VCs to give her money. Or are they so hungry for the Next Big Thing that they don’t bother to run a sanity check on a proposal? ---
**Author:** ![TroutMan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troutman/32/6721_2.png) [@TroutMan](https://boards.straightdope.com/u/TroutMan)\ **Post date:** [January 23, 2019, 3:53pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/52 "2019-01-23T15:53:56Z")
For anyone interested in the case, I highly recommend [_Bad Blood: Secrets and Lies in a Silicon Valley Startup_](https://www.goodreads.com/book/show/37976541-bad-blood) by John Carreyrou, the journalist who first broke the story. I’m halfway through it, and it’s fascinating. He absolutely rips Holmes to shreds in every way, to the extent that I wonder if she killed his puppy or something. [There are also multiple documentaries](https://www.biospace.com/article/as-attorneys-wrangle-over-criminal-charges-two-theranos-documentaries-will-be-unveiled-this-week/) coming out about Holmes and Theranos. One is being shown at Sundance this week, and ABC has a 6-part podcast releasing starting today, with a preview shown tonight (Jan 23) during Nightline. A movie adaptation of _Bad Blood_ is reportedly in the works with Jennifer Lawrence as Holmes. ---
**Author:** ![TroutMan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troutman/32/6721_2.png) [@TroutMan](https://boards.straightdope.com/u/TroutMan)\ **Post date:** [January 23, 2019, 4:05pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/53 "2019-01-23T16:05:44Z")
> [@Dewey\_Finn](#): > > What I’m wondering is how early did the fraud begin? At one point, she was a Stanford undergrad with a neat idea who dropped out to pursue it. By itself, surely not such an unusual story. I’ll bet half or more of the students (and faculty) at Stanford are looking for a gold mine. But surely she had some proof of concept that she used to demonstrate the validity of her idea, and which convinced the VCs to give her money. > > Or are they so hungry for the Next Big Thing that they don’t bother to run a sanity check on a proposal? The book goes into this a bit. The groundwork for fraud was there pretty much from the beginning: over-promising the technology, unrealistic sales estimates, and faked demonstrations. It became outright fraud when they reached the point that they had to actually fudge numbers to maintain the fiction. The book argues that Safeway and Walgreens (the two big companies who bought into it) stayed in it way longer than reasonable because of “fear of missing out” on a revolutionary technology. One of the Walgreens execs made a comment about not wanting to see a Theranos device in every CVS store in a couple years because Walgreens got cold feet. Holmes was pretty adept at blocking attempts to validate the technology, and at ingratiating herself to C-level execs who would then push back on their own people when concerns were raised. ---
**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\ **Post date:** [January 23, 2019, 7:33pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/54 "2019-01-23T19:33:48Z")
> [@TroutMan](#): > > … ingratiating herself to C-level execs … [rhetorical] And how, exactly, was that done, in this case? :rolleyes: [\rhetorical] ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [January 23, 2019, 7:55pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/55 "2019-01-23T19:55:31Z")
> [@TroutMan](#): > > > [@Dewey\_Finn](#): > > > > What I’m wondering is how early did the fraud begin? At one point, she was a Stanford undergrad with a neat idea who dropped out to pursue it. By itself, surely not such an unusual story. I’ll bet half or more of the students (and faculty) at Stanford are looking for a gold mine. But surely she had some proof of concept that she used to demonstrate the validity of her idea, and which convinced the VCs to give her money. > > > > Or are they so hungry for the Next Big Thing that they don’t bother to run a sanity check on a proposal? > > The book goes into this a bit. The groundwork for fraud was there pretty much from the beginning: over-promising the technology, unrealistic sales estimates, and faked demonstrations. It became outright fraud when they reached the point that they had to actually fudge numbers to maintain the fiction. > > The book argues that Safeway and Walgreens (the two big companies who bought into it) stayed in it way longer than reasonable because of “fear of missing out” on a revolutionary technology. One of the Walgreens execs made a comment about not wanting to see a Theranos device in every CVS store in a couple years because Walgreens got cold feet. Holmes was pretty adept at blocking attempts to validate the technology, and at ingratiating herself to C-level execs who would then push back on their own people when concerns were raised. As I remember, their big claim that received all the attention was that they said they’d be able to do all the usual blood tests with just a drop of blood from a pinprick, rather than several vials as is usually done. So that was always bullshit? Didn’t any of the VCs or corporations like Walgreens test them on these claims? ---
**Author:** ![TroutMan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troutman/32/6721_2.png) [@TroutMan](https://boards.straightdope.com/u/TroutMan)\ **Post date:** [January 23, 2019, 8:31pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/56 "2019-01-23T20:31:08Z")
> [@Dewey\_Finn](#): > > As I remember, their big claim that received all the attention was that they said they’d be able to do all the usual blood tests with just a drop of blood from a pinprick, rather than several vials as is usually done. So that was always bullshit? Didn’t any of the VCs or corporations like Walgreens test them on these claims? It’s difficult to believe, but no, the VCs and corporations didn’t test them, or they granted them extreme leeway when tests didn’t work or equipment wasn’t ready. The selling points were a pinprick of blood, tested in a “portable” automated machine that could be installed in stores or homes, and results within minutes. Theranos was really trying to make this happen (it didn’t start out as a scam), but they starting selling the product before they figured out how to make the machines work. They had a machine that _kind of_ worked for one specific type of blood test. It was very unreliable in performance and accuracy, but maybe they could have done something with it in a few years. But a major problem is that Holmes told Walgreens they could provide a single machine that ran several types of blood tests, then set about trying to figure out how to make it work after closing the deal. They never got close to anything that could do that. An example of Holmes’ M.O.: Safeway was going to create “wellness centers” in their stores where shoppers could get their blood tested while they waited. They actually remodeled several stores in anticipation of this. When it came time for the trial run in a few stores, Safeway was surprised that instead of machines, Theranos put phlebotomists in the stores, and then sent the samples to their lab (and they were withdrawing complete vials of blood, not a pinprick). Then Theranos would run the tests with other commercial equipment or even send samples to other labs. And on top of all that, the results weren’t even reliable due to shoddy practices. It’s truly unbelievable how long they were able to get away with stuff like this. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [January 23, 2019, 8:45pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/57 "2019-01-23T20:45:10Z")
Damn. Sounds like honesty is the only thing holding me back from wealth and fame. (I remember the heyday of the dotcom insanity, when the stupidest ideas got all sorts of VC funding. It never made any sense to me that people would throw money at many of those companies.) ---
**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\ **Post date:** [January 23, 2019, 8:59pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/58 "2019-01-23T20:59:40Z")
> [@Dewey\_Finn](#): > > Damn. Sounds like honesty is the only thing holding me back from wealth and fame. (I remember the heyday of the dotcom insanity, when the stupidest ideas got all sorts of VC funding. It never made any sense to me that people would throw money at many of those companies.) I think a lot of people were, and still are, under the spell of Amazon. With enough hubris and good intention, you can convince yourself and a lot of people your idea is going to make millions using the internet. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [January 23, 2019, 9:27pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/59 "2019-01-23T21:27:59Z")
Amazon does make money, just not in the core business. And that’s mostly by design, as far as I can tell. They make a pile of money through AWS and a [growing ad business](https://www.nytimes.com/2019/01/20/technology/amazon-ads-advertising.html). ---
**Author:** ![typoink](https://avatars.discourse-cdn.com/v4/letter/t/ecb155/32.png) [@typoink](https://boards.straightdope.com/u/typoink)\ **Post date:** [January 23, 2019, 10:01pm UTC](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626/60 "2019-01-23T22:01:56Z")
Jon Lovett (former Obama speechwriter, current Pod Save America pundit, and generally pretty cynical guy) told a story on his show about meeting Holmes at a party a while back. This was, IIRC, before charges were public but definitely after news about Theranos being fraudulent had broken. He said she seemed completely sincere and passionate, and that he walked away thinking she was either a truly brilliant humanitarian inventor being raked over the coals by jealous vultures or an absolute sociopath. And leaning towards believing the former. She clearly has an astonishing talent for seeming credible. [Previous page](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626.md?page=2) [Next page](https://boards.straightdope.com/t/should-elizabeth-holmes-get-jail-time/810626.md?page=4)