Judging Freedom - Elizabeth Holmes found guilty of defrauding Theranos investors

Episode Date: January 4, 2022

Elizabeth Holmes was found guilty of defrauding Theranos investors, and now faces 20 years in prison. Judge Napolitano breaks it all down. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Save $80 with code SPACE80 at Talkspace.com. hello everyone judge andrew napolitano here judging freedom on a pop-up judging freedom today is tuesday january 4 2022 and yesterday elizabeth holmes who is the founder of a company called Theranos, was convicted in federal court in San Francisco of duping investors, some very prominent investors of a lot of money. former Secretary of State Henry Kissinger of $3 million, and other wealthy individuals, Betsy DeVos, who was the Secretary of Education in the Trump administration, her family lost tens of millions of dollars. What did Elizabeth Holmes do? Well, she founded a startup in Silicon Valley in that portion of California between Palo Alto, where Stanford is located, and the city of San Francisco, Northern California, where a lot of the high-tech people live and work. She founded a startup which supposedly could test blood in a rapid way at a fraction of the time that standardized tests could test blood and would produce startlingly accurate results.

Turned out, of course, that it was all grossly exaggerated, but the exaggerations were gross and profound because they included in them endorsements of competitors who, of course, wanted Ms. Holmes and Theranos to go away. And the last thing they would have done was to engage in supporting her project. So Pfizer, for example, Ms. Theranos was convicted of forgery by including in materials she sent to potential investors an accolade from Pfizer, which of course is a competitor of hers. But the essence of the charges against her, and she faces about 20 years in jail. I'll tell you why it's only 20, because hundreds of millions of dollars were duped out of investors.

The essence of what she did was deception, a material misrepresentation, lying about something and having someone rely on the lie. That's called fraud. In this case, the reliance consisted of hundreds of millions of dollars being invested and all of it being lost when this house of cards came tumbling down. How did it come tumbling down? Because employees revealed that the company was failing while Ms. Holmes was still out there seeking investor money. And then people fled from the company.

And then a client stopped using the company's services. And then it became apparent that the company couldn't deliver as promised. She was convicted on seven of 13 counts. Each count is a potential 20 years in jail, but she won't get 20 years in jail per count because she was acquitted on some of these charges. So some of the representations she made were true. Not all of them were false. And the jury found that she should only be convicted because that's what the law says on the false ones. So I can tell you from having sentenced over a thousand people in my career as a judge. When the judge is confronted with sentencing a white-collar criminal defendant who's been acquitted of some of the charges but convicted of most of them,

that lessens the acquittals, lessens the amount of time in jail even for the ones for which she was convicted. Prediction, she'll probably get about 12 to 15 years in jail, and in the federal system, she'll serve 80 to 85 percent of that time. Judge Napolitano on judging freedom. Have a good one.