How Come Elizabeth Holmes is not in Prison?

[Science Fan]

Yesterday, on the net, I saw some articles regarding Theranos's CEO, Elizabeth Holmes, regarding some financial penalties she has been assessed. However, she fraudulently claimed that some device her company produced was capable of performing more than 200 diagnostic tests of blood, when it could only do 12. She lied to investors about this, and also falsely claimed her product was used by the Department of Defense. Something in the neighborhood of $750 million dollars was taken in by her acts of fraud. That's a huge act of theft, and yet, she will not face any prison time, as all of her penalties are going to be merely financial.

Imagine someone breaking into a home and stealing a TV set. That's no where near the taking of $750 million; yet, if that person gets caught, he's likely to do some jail, or even prison, time. So, why is there such a double standard when it comes to "white-collar crime"? How many pensions did she wipe out by her fraud? How many lives ruined? And yet, not even one day in jail?

The law should be fairly applied to everyone, and that means people who steal hundreds of millions by fraudulent acts should be given lengthy prison sentences.

[FlashDangerpants]

she will not face any prison time, as all of her penalties are going to be merely financial.

That's unlikely. You have a federal agency called the Securities and Exchange Commission which enforces regulations. but it is a regulator of companies and directors, like the FCC. It is not an agency like the FBI or DEA that hunts criminals. In short it has no powers to launch a criminal prosecution. It can pursue defendants through civil court. It can also suspend various types of license and prevent some sorts of trades through various exchanges.

Settling with SEC in a civil case as has happened here, does not shield you against criminal prosecution by other agencies. The DoJ will deal with the criminal aspect. If they decide not to pursue the case for some reason, she is vulnerable to prosecution still by DAs in any number of jurisdictions where anyone who fell victim to the fraud can be shown to have suffered physical or financial harm. Given that the harm she did seems to have affected people in more or less every state, jail time for her remains highly probable.

However, it's not very likely that she wiped out any pensions at all. Any pension fund which invests your entire pot in a single company will face a visit of their own from the SEC, and probably from the DoJ too.

[Science Fan]

Well, except for the fact that it has been known for a long time that she committed this fraud, and no one has yet come forward with any criminal charges. What are they waiting for then? She should have been charged criminally long ago. It would be an extremely simple case to prosecute --- we have records of her statements regarding what her product could allegedly do, and we know the device does not even come close to doing what was claimed. The case could actually secure a conviction just with those facts, and no others. In addition, there are insiders who have come forward regarding the fraud that was committed. This would be like shooting fish in a barrel. Yet, nothing is happening. Even state authorities can bring criminal charges in the state where her business had its main operations, or was incorporated, and they have done nothing. And it's not as if a prosecutor would not enjoy the free publicity.

[FlashDangerpants]

Well, except for the fact that it has been known for a long time that she committed this fraud, and no one has yet come forward with any criminal charges. What are they waiting for then?

Due process. You don't walk into a court with a handful of newspaper cuttings and demand somebody goes to prison. You assemble a case that represents the entirety of the facts, or it gets dismissed with prejudice.

She should have been charged criminally long ago. It would be an extremely simple case to prosecute --- we have records of her statements regarding what her product could allegedly do, and we know the device does not even come close to doing what was claimed. The case could actually secure a conviction just with those facts, and no others.

She would barely need to hire a lawyer if somebody attempted to mount a prosecution the way you describe. For a start, you need to have the product thoroughly examined by actual experts and a proper professional report must be written. You need to interview every possible witness in order to work out who are the accomplices, and to make sure the accused isn't able to point the finger of blame elsewhere. How does the court know she wasn't herself the victim of a massive scam perpetrated by others if you don't do the work to prove it to a standard beyond doubt? You must perform discovery within every possible document; including millions of emails, contracts of extraordinary complexity, invoices and bank statements. All this must be cross referenced, indexed and shared with the defence counsel.

Fraud on that scale is an inherently complex thing and the investigation requires maybe millions of man hours to conduct thoroughly. In a legal system that presumes innocence (which I assume you want your own to keep doing) even quite blatant fraudsters often walk free because cases are improperly assembled by overworked prosecutors.

In addition, there are insiders who have come forward regarding the fraud that was committed.

Her lawyers are going to ask questions about their testimony to see if they can be accused of fabrication, or even being the true criminals in this matter, pulling the wool over their poor naieve client's eyes. Perhaps you want the prosecution to double check that sort of thing beforehand? The judge certainly does and will toss the case if they don't.

This would be like shooting fish in a barrel. Yet, nothing is happening. Even state authorities can bring criminal charges in the state where her business had its main operations, or was incorporated, and they have done nothing. And it's not as if a prosecutor would not enjoy the free publicity.

Given the number of inadequate tests carried out, the DA in any state, irrespective of where the head office resides, should be able to show that somebody in his jurisdiction received the wrong medical care as a result of this misbehaviour and was harmed. But the DoJ is on the case. I believe in the US system the prosecutorial discretion of the federal authorities trumps that of local prosecutors. So the feds get first dibs.

[Science Fan]

Boy you have trouble processing information. No, the case would not be difficult. Yes, experts would be needed, but experts are not by any means a big deal in litigation. Especially when dealing with a claim that a device can do more than 200 tests, and it can only do, at most, 12. Holmes is the person who came up with the device, so no, your claim that maybe she was lied to, does not work. It especially does not work when she's receiving hundreds of millions of dollars for telling people that the device does things that it does not, and cannot do. Being that far off the mark -- only 12 tests instead of more than 200 ---- is a lie. Keep in mind that fraud claims can even be based on recklessness. The device did roughly 5% of the number of tests it was claimed capable of doing.

Think what you want, but you have no clue what you are yapping about here when it comes to litigation. Go try some criminal cases and then get back to me.

[Science Fan]

You don't even understand the federalist system in the USA. The Feds do not have exclusive jurisdiction, and nor do the states have to wait to prosecute to see what the feds will do. There is no double jeopardy between the federal government and the states, which means both the states and the federal government can prosecute a defendant for the same conduct. That's why there was two Rodney King criminal trials in the USA, and not just one ---- the federal government's jurisdiction is not dependent on the results of a state prosecution, and the opposite is also true.

[Science Fan]

Oh, her lawyers are going to cross-examine the witnesses against her. So? She headed the company and was in charge, so she can't escape liability by passing it off on a subordinate. At best, it may reduce a charge, but even that is far-fetched because she is the one in charge, she herself bragged about what the device could do, and she had no basis to make these claims. The fraud had to originate with her as the company head and the inventor.

But, thanks for at least answering one question why white-collar criminals get treated far easier than other criminals ---- people like you are all too willing to engage in bullshit apologetics regarding major crimes.

[FlashDangerpants]

Boy you have trouble processing information. No, the case would not be difficult.

It's a huge fraud case with thousands of relevant documents. Those aren't easy when you do them properly.

Yes, experts would be needed, but experts are not by any means a big deal in litigation. Especially when dealing with a claim that a device can do more than 200 tests, and it can only do, at most, 12. Holmes is the person who came up with the device, so no, your claim that maybe she was lied to, does not work.

I work for an R&D firm that manufactures blood testing equipment for rapid DNA analysis. It takes teams of scientists from multiple disciplines as well as software developers, Bioinformaticians,as well as both mechanical and electrical engineers to design a product that requires FDA approval similar to Theranos'. Millions of simulations are involved, and thousands, if not hundreds of thousands, of physical experiments through several phases of development, which all generates a shit ton of paperwork that all has to be meticulously stored. Theranos will have thousands of lab notebooks alone which are all part of the paper trail for this prosecution.

Elizabeth Holmes did not do all that by herself, she is a college dropout and therefore not qualified for some of it. She probably performed exactly zero experiments, same as the guy who founded my firm does absolutely none either (and he is qualified for them). It would take a lot of conspirators to fake all that, but the head guy doesn't necessarily have to be one of them.

So the prosecution, if done properly by professionals instead over the internet by fools, would want to make sure they could demonstrate what she knew and when, and which orders she gave to whom. Remember they need to work out all the people to prosecute, which will be many.

It especially does not work when she's receiving hundreds of millions of dollars for telling people that the device does things that it does not, and cannot do. Being that far off the mark -- only 12 tests instead of more than 200 ---- is a lie. Keep in mind that fraud claims can even be based on recklessness. The device did roughly 5% of the number of tests it was claimed capable of doing.

Theranos got FDA approval for their technology, which is a painstaking process that cannot be blundered through. There is no scope for citing recklessness under those circumstances.

You don't even understand the federalist system in the USA. The Feds do not have exclusive jurisdiction, and nor do the states have to wait to prosecute to see what the feds will do. There is no double jeopardy between the federal government and the states, which means both the states and the federal government can prosecute a defendant for the same conduct. That's why there was two Rodney King criminal trials in the USA, and not just one ---- the federal government's jurisdiction is not dependent on the results of a state prosecution, and the opposite is also true.

As I understood it the Federal case only convened a grand jury after the state case had failed to convict, and was for a specifically federal crime that's not on the state statute books. It wouldn't have gone ahead had the local court not delivered a fairly blatant miscarriage of justice as the officers would have been in prison.

We both know it's exceedingly rare for a single crime to be prosecuted at both state and federal level, and we are both aware that federal prosecutions typically trump state ones if the crime involves interstate commerce. And if a dozen prosecutions are initiated at once then 11 have to wait for the first one to complete. In this instance one would certainly expect the agency with the larger resources to take the lead, and as there is a DoJ case in the works, they have the people, so don't bullshit me.

But, thanks for at least answering one question why white-collar criminals get treated far easier than other criminals ---- people like you are all too willing to engage in bullshit apologetics regarding major crimes.

You are taking an absurdly simplistic view. I haven't given you any reason to suppose I actually consider Holmes anything other than crook. I just understand the thing about having to prove stuff to legal standards, which are more exacting than the tabloid fuelled rage you are wielding.

[-1-]

Imagine someone breaking into a home and stealing a TV set. That's no where near the taking of $750 million; yet, if that person gets caught, he's likely to do some jail, or even prison, time. So, why is there such a double standard when it comes to "white-collar crime"?

There is no double-standard. My electric bike was stolen in living daylight, recorded by cameras. I reported it to police, and told them exactly where the cameras were located, and who owns the tapes. Police did nothing but scratched its ass.

Compare this to stealing a candy bar at a grocery store, and you are charged with theft. Immediately. The police will come in record time to arrest you.

A friend of mine, a girl who is in Mensa, explained this to me: we live in a capitalist world, where trade is of utmost importance. More so than private property. But less so than personal safety. Police therefore will use all kinds of resources to find a murderer, a rapist, or someone who beat up someone else (in this order), then find those who commit crime against capitalism, and finally when it has resources left over after that, it will find criminals who break the law re: personal property, fraud, etc., any crime that does not affect capitalist ideals.

She said that I had already paid my monies for the e-bike, when it was stolen, so there was no need from the viewpoint of capitalist concerns to pursue the thief or thieves. Instead, I was regarded as one who is likely going to buy yet another e-bike to replace the one that got stolen-- this is good for the economy, so there was NO reason, from the establishment's point of view,to find my e-bike and return it it to me.

That was one damn smart girl. Her explanation makes complete sense.

[henry quirk]

What's her net worth?

[-1-]

What's her net worth?

I don't know. I normally don't ask my friends for full financial disclosure.

[Science Fan]

1: Your analogy regarding your bike is not a good one. The person who stole your bike was unknown, and your bike was not worth anywhere near $750 million. In the case of Ms. Holmes, we know who she is, we know how she committed fraud to rake in hundreds of millions, and she has not done any jail time, and no one is prosecuting her. If someone stole a TV from a home, and their identity was known, they would be prosecuted, provided the statute of limitations had not run, and they could easily do some jail time. There are many people sitting in prison who stole far less than what she did.

It's also not justified by capitalism, since fraud falls outside legit capitalist activity. Holmes actually undermines the markets because of her fraudulent conduct.

[Kayla]

the explanation I got from a lawyer friend is that it is hideously difficult to prosecute white colar crime in criminal courts

white collar criminals know the law, they know when to keep their mouth shut, they will not try to defend their actions to the police detective, they are very hard to bait into confessing, they want their lawyer before they want anything

regular criminals, she told me, are often dumber than a sack of dead mice. She had a client who did a home invasion, and by the time she got to the police station, he confessed to everything. the cops kept telling him that he is a worthless piece of shit and that he is not even worthy to lick the shoes of the people he robbed, etc etc. - that despite his protests that he wants a lawyer.

eventually they were able to goad him into trying to provide a moral justification for his actions and that included confessing to the alleged facts

if this person was not an idiot he would not have done the home invasion in the first place - and even if he did, the evidence was iffy enough (until he talked) that she could plea bargain it down to probation and some counselling if he just kept his mouth shut

also the evidence of white collar crimes can consist of hidemous amount of paperwork and computer files and someone has to go through it all, normal crimes do not create that amount of evidence

[QuantumT]

IMO prison should only be for those who makes crimes endangering peoples physical/mental health and lives. Killers obviously too.

Other crimes should be punnished by X weeks/months of excommunication, X depending on the seriousness of the crime. Excommunication as in being physically visibly labelled as such, and meaning to be unworthy of a home, a job, recieving money and other benefits of society.

In the case the OP started this thread with, 10 years Xcom seems appropriate.

That's just my two cents.

[-1-]

A friend of mine, a girl who is in Mensa, explained this to me: we live in a capitalist world, where trade is of utmost importance. More so than private property. But less so than personal safety. Police therefore will use all kinds of resources to find a murderer, a rapist, or someone who beat up someone else (in this order), then find those who commit crime against capitalism, and finally when it has resources left over after that, it will find criminals who break the law re: personal property, fraud, etc., any crime that does not affect capitalist ideals.

She said that I had already paid my monies for the e-bike, when it was stolen, so there was no need from the viewpoint of capitalist concerns to pursue the thief or thieves. Instead, I was regarded as one who is likely going to buy yet another e-bike to replace the one that got stolen-- this is good for the economy, so there was NO reason, from the establishment's point of view,to find my e-bike and return it it to me.

That was one damn smart girl. Her explanation makes complete sense.

Sure. Protect and serve … social order.
That’s why cops exist.
That’s the principle of cop.

Capitalistic cops, communist cops, dictator’s cops.
The details of the social system don't matter.

The principle of cop doesn't depend on capitalism.

The motto of cops everywhere is protect and serve … the social order.

In the United States, where individualism is emphasized, this is an acceptable motto because individuals recognize the necessity of self-reliance.

Those who protect and serve the individual are called personal attorneys and bodyguards, not cops.

Walker, you mixed up the originators of the quotes with the quotes.

You quoted me as saying something I did not say at all. Please be careful in your quoting systemics.

I asked the mods to erase your immediately preceding post to this one. This I asked not out of anger or resentment, but only because you quoted me as saying something I did not say at all. I can't abide by that.

I righted it here, but please, be more careful next time.