Elizabeth Holmes is going to prison – with a $500M bill | Hacker News Reader

Elizabeth Holmes is going to prison – with a $500M bill

theregister.com

90 pointsdamethos105 comments

10 years used to feel like a really long time to me. Now that I have two young kids the idea of missing out on 10 years of their life growing up is in the impossible to handle part of my brain. I feel bad for everyone effected and yes even her.

Well then they she shouldn't have decided to get pregnant as sson as the jury decided to convene.

Obviously it sucks for the kids. But they're rich. They'll have good foster care. And she doesn't care that she can't see them, she knee that was a risk when she had them, she took that gamble to try to stay out of prison.

This is psychopath we are talking about. And letting her off the hook because she has kids is going to encourage every other psychopath to do the same. That'll create more orphans in the long term.

She likely had children because she thought it would make her more sympathetic. Unlikely given how she acts and treats all around her that the children are more than pawns in her game.

Imagine being her child; imagine growing up knowing that in all likelihood, you only exist because your mother wanted to stay out of prison.

Get in line with the billions of other people with unsatisfactory lives.

i suppose the good news is her child will always have the money to pay for all the therapy to handle those issues herself.

I think the worst part is that she could have done the work to change as a person, realize her narcissism, realize how to overcome that and perceive the world differently. Yet it won't matter. Her children will always be perceived this way. At least in the near term. I imagine by the time they are in their 20s they will have some kind of personality disorder as well.

I have the capacity to feel really bad for her kids. I couldn't care less about the rich investors money she squandered, but as a mother I'm spitting furious that she would bring two children into this world, knowing that she was guilty for the fraud that she stood accused of. She's begged the courts for leniency on behalf of her children, and I really want to believe that she didn't have children for that sole purpose, but I don't.

or perhaps not every human decision /behavior should be interpreted with too much intentions. Most likely she actually believed in how it could have worked out.

There is a difference between believing she operates under such cold calculus, and not believing she doesn't. I could be convinced one way, but not the other.

One the other hand, if she waited until after prison to have children, she might have been to old to have them.

♬ cry me a ri-iver ... ♬

If I were being uncharitable, I'd say she had the kids to try and avoid going to jail. If she were a psychopath it's the sort of thing she might pull. On the other hand it may have been the only opportunity to have kids if she knew she was going to go inside for a while, so she maximised her opportunity.

Doing whatever she wants out of self interest, and damn the consequences to those to who she's responsible for? Story checks out, but that's not much more generous.

It looks like straightforward cost externalization: she achieved reproduction, the consequences of growing up without a mother are her children's problem, and the burden of raising them is distributed among other family members.

By the way, is Elizabeth Holmes married? Whose children are they?

Another rich heir. They mostly reproduce with each other and with top sport/entertainment people, but her reputation made that only the first category is available to her.

Do not feel bad for her. Do not even give her a single thought.

It's pretty important to dehumanize and de-empathize with people who offend or break the law. A good justice system and society is built in doling out punishments without reflection or understanding.

I see the valid point you make about how civilization should strive to be above cruel, black/white judgement and ideally encourage empathy towards others in order to be considered just. But I also can't argue against an average citizen not having enough empathy/attention to give (from the limited pool we all have) to one of the biggest and most infamous con artists of our time. It's not like she's in there for just doing drugs.

Law should not be one's entire moral compass, but the things she did are undeniably extreme.

Huh, you may be right.

Despite me being pretty sure you're being sarcastic.

if you focus enough on someones misery you can feel bad for anybody ... even Ted Bundy or Hitler ... but empathy is resource that should be wisely spent and allocated. instead of focusing on people who caused harm to others I can choose to do so for people who didn't. after all compassion isn't working in parallel

She's still a person. I agree with the weight of the sentencing and the amount she received and that she should never be allowed to be a director of a company again, but there's got to still be a small evolutionary part that empathises with anyone looking down the barrel of consequences of this magnitude.

I haven't followed this closely but frankly I feel similarly. I think only people who are violent and dangerous to other people should be locked up, and even then only until they are no longer dangerous.

If things can be organised so she is no longer capable of defrauding people (banned from holding certain positions in companies etc.) I don't see why she should be locked up.

I'm sure I would feel differently if I had been defrauded by her, but isn't that exactly why the burden of justice fulls on people other than the aggrieved?

So what consequences do you propose for those that create such frauds that should act as an effective deterrent? Being 'demoted' after the fact doesn't really encourage anyone not to get to the top and do fraud in the first place.

I sympathise with this view in general and with her situation having kids she won't be able to see for 10 years.

But us I understand in this specific case she played an important role in driving one of her employees to suicide, and her fraud concerning her tech is not just financial, it was giving people false information about their health, including cancer - which is close to violence to me.

In fact my sympathy with this case is not that it is too harsh for a small crime (fraud), it is that the crime is so huge that she must have been psychopath and might deserve mental treatment. Genuinely how can someone live with giving hundred of thousands of people false health information based on a test they know is garbage?

She is dangerous to other people. Let's not forget that this was medical fraud - people's lives were affected due to bad diagnoses.

> I think only people who are violent and dangerous to other people should be locked up, and even then only until they are no longer dangerous.

What about people who knowingly allow the blood of cancer patents to be tested using technology which they know does not work?

You're discounting the deterrent effect. Defrauding investors has a huge negative impact on society, to say nothing of bogus blood test results, deceiving regulators, and ruthlessly threatening legal actions against whistleblowers and journalists.

Don't worry. She will absolutely not serve 10 years.

What is the minimum she must serve?

OP is absolutely wrong about this. Federal law requires that you serve 85% of your sentence before becoming eligible for parole or early release. She'll serve at minimum 9.5 years, (so, technically correct, but not what OP likely meant) unless she's pardoned or the sentence is overturned on a further appeal.

You're right, of course. Our nation would never be lenient on white collar crime.

She chose to have those children, most likely as a bargainimg chip, so that makes her an even worse person in my book. I hope she rots in there.

> . I feel bad for everyone effected and yes even her.

While I do feel bad about the kids, I also know that society has normalised taking children away from one parent, often with little to no recourse.

So while I feel bad for the kids, it's no worse than what society has done to million of children, and do to thousands per day, even as I type out this message.

At least her kids will have advantages the other kids don't get.

>> Charges for which Holmes was convicted in January. These included three counts of wire fraud and one count of conspiracy to commit wire fraud.

Naive question: Why do they call this wire fraud? Where is the wire in this fraud?

Probably to telegraph the fact that it’s not using actual physical paper documents?

There is an appropriate name like Investment Fraud. Just wondering why don't use it and lump everything into under wire fraud which makes it seem a petty crime.

Because names are sticky and you don’t need generalised category names if there’s only one thing in the category. I’d imagine wire fraud was named when telegraph wires were the only long distance instant communication.

I am not a lawyer but I believe if the fraud involves any kind of electronic communications, like sending a term sheet to an investor via email, then it can be charged as wire fraud.

As opposed to mail fraud -- basically any kind of fraud committed via electronic communication. At the time they would have been thinking of telegrams and phones, but the statute covers fraudulent materials "transmitted by means of wire, radio, or television communication", so that covers the Internet as well.

If you commit all your fraud via Starlink, could you make the argument that you didn't do it over wire?

It includes "radio".

Ah, but what about the lasers?

High frequency radio signals?

That is certainly not possible, because there is a wire between Starlink router and Starlink antenna! :)

There's definitely a wire somewhere in the mix. Probably more than one!

You can try almost anything in a courtroom, whether something’s likely to work is wholly another matter. When in doubt, legal processes tend to try to defer to precedent and prior case law.

My guess is they would see a parallel between other also-not-really-telegraph-wire technologies on which others were convicted of wire fraud, and a Starlink connection.

This means it probably wouldn’t legally be treated as appreciably different from any other current physical or wireless connection.

The court will argue that even your so-called wireless device has wires inside it.

I thought the term "wire fraud" meant "wire" in the sense of "telegraph". That is, it's fraud relying on telecommunications, which could include landline telephone, satellite, microwave, radio or internet. Have I got that wrong?

You are correct. It was a bad joke on my part.

Hmm smoke singnals, semaphores and International Code of Signals.

I think the correct way is to pick something really old... Now your co-conspirators likely will screw it up.

Good!

It’s amazing to me just how long wealthy people in the US can string this stuff out and jump on every last technicality for months on end.

I know she wasn’t convicted of the harm she did (and would have continued to do) to the public, but she clearly is a danger and has learned nothing. Needs to be in jail.

She's already demonstrated she is a flight risk dumb enough to buy a one way ticket.

Does anyone have a clear and simple answer on why she got two years less than Sunny Balwani?

Best analysis I've seen: "Balwani might have been perceived as someone “a little bit older and wiser” who should’ve known better."

https://qz.com/theranos-sunny-balwani-jail-time-elizabeth-ho...

If the court system can try kids as adults for their heinous crimes, then the "should've known better" reasoning doesn't stand up. Plus she went to fancy schools, and was highly educated. She already "knew" better than most people living in the US.

They both should have gotten longer jail sentences, their convictions should have been about the people she harmed with her machines. Instead it was all about how she and Balwani mislead/ripped off their investors (who didn't even do their own work in due diligence).

Now Balwani is serving at a Club-Fed prison. The $452 million restitution she's been slapped with? Just for investors, it seems. Can anyone find an article that states actual people being victims? Nearly all news reports say the restitution is for "victims", but then the victims are just Safeway, Rupert Murdoch, Walgreens... etc.

There is no justice here. Not in the ruling, not in the sentencing, not even for real people. "Being wiser" or "older" is just a BS made-up reasoning. Let's at least not sugar coat why she got less of a ruling than Balwani. It's enough of an insult to those who were actually affected to have seen how this all played out.

> Can anyone find an article that states actual people being victims?

Here's one: https://www.cnbc.com/2021/09/21/theranos-test-gave-false-mis...

My understanding is that there were a few at the trial

Yes, they used these employees statements to establish wrongdoings that Theranos committed... for the sole purpose of proving that the investors were defrauded. Not for people who had incorrect results, who then had to make hard life decisions based on it, not to mention the emotional trauma that this can inflict.

By "victims", I meant it in the context of the restitution. None of that half billion dollars that she owes goes to these people. All the articles I've read say she has to pay her victims in the title. But if you read the articles closely, they just say it's to pay back investors.

I understand your questioning of the situation but I think its pretty clear. She was not convicted of anything related to patients or their results so of course they are not her victims.

Jeffrey Schenk, an assistant U.S. attorney and lead prosecutor, said in court on Wednesday that Mr. Balwani should receive a longer sentence than Ms. Holmes because he oversaw Theranos’s lab, which endangered patients.

“Mr. Balwani had significant autonomy in running the lab. He made decisions that directly impacted the information that was communicated to patients,” Mr. Schenk said. The lab, he added, was the source of “some of the greatest harm.”]

[1] https://web.archive.org/web/20230307122401/https://www.nytim...

Balwani's story is quite amazing. The dude won startup lottery and made enough money that he wouldn't have to worry rest of the life. He had a mansions, sports cars and lived his life happily. One day this young women walks in his life and wants help with her startup. The dude throws away everything to make her startup success, burns midnight oil and torches ethics. He is much older and thinks he is in love. Only later to realize that the woman was simply using him and chewed him out as soon as his purpose was done. They became so adversarial in the end that they literally campaigned to have each other in prison.

Important Life Lesson for Everyone: If you made your money, do NOT fall in love (or, god forbid, marry without iron-clade prenup).

You are throwing the baby out with the bathwater there.

Still better than bringing a baby into this world as s defense tactic in court.

Definitely don't think it is clear cut that he was the one being used.

I think the important life lesson is: do NOT deliberately grossly defraud people

Do fall in love. If you're rich enough, you can survive on half your wealth nicely, but in that case do take the prenup because you are a financial target.

Don't lose your ethics. He deserves quite a bit of his downfall.

Prenup doesn't protect you from the US justice system though.

There's a believe that he was the one pushing her to commit this fraud.

She's white and he's not

She's also a woman. Women tend to get lighter sentences, especially if they have children.

Now do SBF

> ...pair jointly responsible for repaying $452,047,268 (£361,533,844) to Theranos investors defrauded by the pair.

Alright, how do they repay this?

They almost certainly won't.

Yeah, but how does this work once she gets out of prison? A percentage off her paycheck every week 'til she dies?

Maybe something like this: https://www.vice.com/en/article/epxm5n/gary-bowser-small-apa...

Her husband is an heir. She will never work again.

Ha ha, on the nose! Only satire can say it like it is, right.

> "'Liz' learns you don't screw over rich people"

Will she still be wealthy?

Her wealth was all on paper, that paper being equity in Theranos. By the time she was indicted her net worth was listed as zero.

In that case will this restitution likely never be paid?

Some might, if they go after her new husband's rather substantial property.

Seems unlikely they'll be able to do that, given they married after all the fraud took place, and I doubt Billy Evans would be stupid enough to put her name on any joint accounts or similar.

Can they do that?

Genuinely unsure how US law works in this scenario. If the assets are in her husbands name, and are clearly not proceeds of the Theranos saga, can they be seized? (Especially given that they came into her life after all of this).

My assumption would have been that she’d essentially remain penniless in her own name until after any limitations of claims had expired (20 years I believe from elsewhere in the thread) and the debt had been written off.

Also does she spend the 11 years in jail or is it a half in/half out thing? I imagine there’s a lot of ways this still gets argued down to a much shorter time period but admittedly IANAL.

I think you usually can go after the spouse's assets. But it seems less likely to be a viable avenue in this case since she met and married him after she was indicted.

She could probably sell her old turtlenecks on Ebay.

Perhaps she'll sell us a biography. But how can anyone believe any story coming from Elizabeth Holmes. She has some serious credibility problems.

The sentencing judge believed her when she said she bought a one way ticket to Mexico after she was convicted to attend a friend's wedding, not to flee from incarceration.

I believe the judge also referred to her as "brilliant", omitting the words "con artist".

Since entrepreneurs often take out loans with their equity as collateral it's likely she's actually negative zero.

No. The court has kindly ordered to pay half billion to her billionaire investors. Apparently they are going in prison ONLY because they screwed investors. I truly don't understand this part. These investors agreed to give money based on risk/reward. They were on the board and happily paddled along. They literally didn't cared even when issues were brought to them. They thought it is just like WeWork/Uber founder doing bullshit for exponential growth. Only when press released news and they thought they might get some mud, they pressed eject button.

No one should be going to prison because of these billionaire investors.

Outright fraud is a very different thing in all contracts because there’s no meeting of the minds by definition. In fact, the incentives are typically the other way in private capital markets. Most investors are extremely wary of getting into lawsuits with companies they invest in even if they’re getting screwed / there’s fraud because it reflects poorly on you as an investor. Often better to just take the loss.

No one is going to prison because of billionaire investors. They’re going to prison because of fraud. Now maybe the billionaire investors managed to get a DA to take on the case in the first place and that’s a problem, but not because she shouldn’t be going to prison.

No, but her husband, Billy Evans, has some wealth.

wealthy family, wealthy network - answer: yes

It is not a real prison. She will probably go to Bryan Minimum Security [1][2]. No fences. Dormitories. Visitations. Gym, etc. The fine is large, but symbolic. From the article, chance of full recovery is very low. No mention, if this would be converted to house arrest at some point.

[1] https://en.wikipedia.org/wiki/Federal_Prison_Camp,_Bryan

[2] https://en.wikipedia.org/wiki/Elizabeth_Holmes

Where I live the goal of prison is rehabilitation, not the ever greater fulfilment of a christianity-induced punishment fetish (and there are studies that support that the former is more effective at returning you functioning, tax-paying members of society once the sentence is over).

So while I agree that in the US white colar criminals tend to suspiciously often get the lighter punishment and that this fact is a glaring injustice, I think the US prison system as a whole is so utterly misconstructed, that this cricicism is a drop in a vast ocean of injustices.

Why shouldn't nonviolent offenders go to a minimum security prison?

Did I say that they should not?

The point based system you have for assigning people to prison types might look fair, but coupled with predictive policing (aka positive feedback) and the police-tendency to let crimes slip for some demographics and not others, it leads to injustice.

interesting that it sounds like a bad thing that the prison is minimum security.

As a Dane the American prison system baffles me. it obviously doesn't work and has commercial interests to the entire countrys detriment.

yet I still feel this schadenfreude and the sentiment that sentences should be rougher and longer.

where does this societal incongruence come from?

Because people have gotten life sentences for petty crimes like stealing a pair of socks. You have to compare Holmes’ case with how other people get crushed by the criminal justice system, and then you can’t help but notice the double standard.

https://www.democracynow.org/2012/10/25/a_life_sentence_for_...

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