Former Theranos CEO Elizabeth Holmes sentenced to 11 years in prison A federal judge on Friday sentenced former Theranos CEO Elizabeth Holmes to 11.25 years in prison and three years of supervised release for defrauding investors in the failed blood testing company. Holmes, facing 11 charges, was found guilty in January 2022 of conspiracy to commit wire fraud and three counts of wire fraud, and …
As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching". Why didn't the consiglieri of rich people do their work and ask for an specialist insight of the product?
A lot of them did. Every time she went to an investor who knew about the industry, they rejected her immediately. That's why she had to carefully find people who wouldn't ask too many questions and who could be fooled by faked financial and medical documents. Even those relatively stupid people asked for such things, but they assumed that when reports from companies or agencies well-respected for financial or medical expertise said the company was good that those reports were real. They were forgeries. Don't assume the investors were so stupid that they didn't look for any proof, as the effort to defraud them was real and serious. They didn't properly investigate and will deservedly lose money from it, but they don't deserve much of the blame.
Also you factor that into the investment returns:
They claim to detect these 20 diseases in a single 1ml sample for $1. OK that's ridiculous, but if they can do 10 tests on a 20ml sample for $10 then we are still 10x up on the competition.
Problem is when instead of switching to a realistic product they just keep hyping the impossible one.
"As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching". Why didn't the consiglieri of rich people do their work and ask for an specialist insight of the product?"
Fear of missing out likely. Think of how many millions they could have lost of they waited for some due diligence to be performed while the price of the stock kept rising.
As an enginerd, I can spot the BS in lots of thing having to do with engineering and the state of the art. If I were contemplating a big investment in something like Theranos, I'd talk to some experts in the field first. Even if I needed to pay them a consulting fee, it would be better than losing my investment. At least I could be reasonably sure the consulting money went to somebody that gave me good value in return.
...and stuff like this wouldn't take long to get a well judged response on from somebody who knew what they were talking about. These experts, now decried by the political press as being naysayers in all forms, are experts for a reason and know their subject. Not all will agree but with blatant nonsense like Theranos' claims any independent with any half reasonable level of expertise would have come down on the "this is bullshit" side pretty much instantly. There are occasions when something may warrant a little more investigation, but that's also a reasonable response - as in "it's probably bullshit but there is a chance that they could be onto something, checking in more detail is recommended".
Physics and chemistry don't bend to charlatan's wills.
> As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching".
Two reasons: Investigations take time, and they want to be first in line for those lovely, big fat rewards. Second, an investigation might reveal that there is bullshit approaching and they might be forced to reconsider the investment. It's best not to ask the question if you might not like the answer.
If I was going to invest in something like that, I'd at least insist on some sack-time with Ms. Holmes for my trouble.
None of the bio-tech VC's would touch Theranos even in the seed stage. It was that obvious it was a total fraud from the get go. But Draper, Fisher, Jurvertson stepped in with seed money and got the ball rolling. And cashed out when the Bigger Fools came along.
So when is Tim Draper going to be charged and hauled in front of a court? Without Tim Draper there would have been no Theranos. He made it happen. It would have remained the bizarre ramblings of a very creepy (even for Stanford) narcissistic fantasist. There are some real nutcases wandering around The Farm. And those people who died or suffered serious health problems due to this massive fraud might still be alive today. Or have been treated earlier.
Its not like Draper does not have form with this kind of stuff. VC financed scam companies. Going back decades. But they usually dont kill people or do serous harm to peoples health. So lets put the real guilty people on trial. The facilitators and prime movers.
It seems to me she was a true believer in the technology. There are stories of her berating lab workers to work harder to make the technology work. The fraud was playing for time until the technology started to work which she seemed to believe it would if the scientists just worked harder.
I don’t see much of the principle of caveat emptor here. The investors need to emply some scientific advisors who know their onions before laving large amounts of moolah on startups like this. The basic idea is not impossible. I just think the sensitivity of the detection tech is not there yet.
If you have had a blood test lately you will see the size of the tubes filled. That is not just a finger drop of blood.
I recently had a lumbar puncture, a needle was inserted under the membranes to sample the CSF. I’m awaiting news of the results 6 weeks later. Some things still take time.
Believer in the technology? No, she was a manager who thought that shouting and forcing people to work would automatically fix any technical or scientific issues. In addition, she was knowingly faking everything that didn't work so she never had to consider whether her idea was possible or feasible given how many smart people couldn't get it working.
Is the idea possible? Sure, eventually. Just as television would have been possible in 1800. Yet if I was running a company in 1800 and insisted that television could be invented if I shouted at engineers enough, none of the necessary technologies would have come to pass. In addition to being happy to commit fraud and to give people inaccurate test results, she was very bad at her job of managing people or or figuring out what advances were feasible and using that knowledge to obtain a real result.
"No, she was a manager who thought that shouting and forcing people to work would automatically fix any technical or scientific issues."
Once again here another example that you can't railroad until it's time to railroad.
I love the James Burke Connections series and there has been a few more along the same lines that show how we got to where we are today in terms of technology, society, etc. One thing that should be very apparent is that huge leaps in technology are excruciatingly rare. Even then, it's often incremental improvements that happen rapidly over time rather than one big step.
Looking back, I wish my Uni course requirements included some classes in engineering history. It's been independent study when I can find a book or video from somebody that has done the research. A very good lesson at present is the story of Uranium. It was thought to be very rare and in the 1940's the US was buying up as much as they could worldwide while the Manhattan project was still secret. Once the cat was out of the bag and a big demand was in place, it was found all over. I see much the same thing happening with Li and Co. I'm seeing more and more stories about deposits now that there is a big market for both. While Cobalt has a tainted past due to where easy to get surface deposits exist, the requirement for the metal in quantity will drive out the family and individual miners since they can't produce in the quantities that manufacturers want to purchase in. The same goes for what the West would call "underage" labor.
Anybody claiming that they can fully automate an automobile plant needs to be screened for insanity. If it could be done, the big players would have cracked that nut. They do continuously make strides towards complete automation, but it will be some time if it can ever be acheived or it's deemed to be worthwile. As one of the biggest and most competitive industries on the planet, it can be a good place to draw parallels from.
This was strictly a fraud trial and I am not conversant enough with US jurisprudence to know who would prosecute her for the damage done to patients (not to mention threatening doctors). She deliberately harmed -- or chose to ignore the harm -- caused to patients by the bogus test results. That deserves a response!
They tried. Some of the charges concerned fraud to patients, essentially selling them useless or harmful tests. Unfortunately, the jury found her not guilty on those charges (her COO did get found guilty on those). I have no good explanation of why they did that, but it now means the chances of using the same charges against her are almost zero (you cannot be charged with the same thing again unless serious flaws were found in the proceedings). There aren't a lot of laws that can be used to charge her criminally, but she could still be sued by patients. I do not know enough to know if there's any chance of that working.
It’s a sign of just how sick the US has become.
She and or her company was not prosecuted for submitting falsified results to the FDA.
She and or her company was was not prosecuted for defrauding customers by charging for non existent technology.
She and her company was not prosecuted for medical negligence that endangered patients lives, hell no one has even bothered investigate.
The only thing that mattered was she exposed how dumb the financial industry and its cheerleaders are (cover of Time magazine! ) and is being punished accordingly. If she had mentioned snake oil in her financial reports she would still be a free woman.
"She and or her company was was not prosecuted for defrauding customers by charging for non existent technology."
Actually, she was charged with this one. Her COO was too and found guilty. She was found not guilty for reasons I don't understand or support. This was the charge they used to attempt to punish her for harm to patients, and you can also bet that the harm to patients was one of the reasons they wanted to pursue the other charges this far; she appears to have enough barriers to being charged with the direct harm, but she's still going to prison because they pursued charges that worked.
It's longer than I expected her to get. Still not long enough IMO, given people's health and lives were put at risk and we may never know how many people died as a direct result of this fraud, but it is at least something. Given she's a reasonably attractive, wealthy, and pregnant white woman, I was expecting her to basically get a slap on the wrist of a couple of months that she could serve on weekends in some minimum security prison and then maybe a year or two of probation. Her little sprog will be in middle school around the time she gets out of prison. I'm sure the other children at some elite prep school will be ever so kind to them.
From what I can recall, they were still doing blood tests the old fashioned way and making claims about their new process to raise investment. It's wasn't the fake machinery/technology that was being used to perform the tests. It's like the scam where somebody fills what looks like their gas tank with water, adds a couple of pills and drives off making it appear they have come up with a way to run a car on water. In reality, the car was fitted with another tank that was filled with good ol' petrol. They come back in a day or so and do the same thing but sell the yokel at the gas station a bottle of the pills at a discount price who then goes on to ruin their car's fuel system.
I would think that if the company was providing false test results and people were injured or killed, Elizabeth would not have been able to make bail and a whole bunch of other people would also be in the dock for murder.
Well, from the book or podcast on it (can't remember which). There's at least one patient who suffered as a result.
A lady who'd suffered at least 2 miscarriages. Theranos result showed she was going to lose her current baby. Doctor flummoxed by results, had reliable reputable test done, all OK.
Just think of the distress that mother went through.
Not exactly. They did use existing machines rather than their own, but they weren't conducting the normal tests. Their claim was that they could test on a lot less blood on their machine. In order to hide the fact that they were using someone else's machine, they still collected less blood for use. The reason the competitors' machines use more blood is that you get unreliable results if you collect a lot less and pad the sample with other substances to get it up to volume. They were using reliable machines in a way that produced unreliable results anyway.
As for the results of this, it's hard to know. If the machines reported false positives, the patients likely sought medical attention and got corrected data from real machines. A terrifying and expensive situation, but not a lethal one. The lethal option is that someone used the test and got a false negative thus avoiding necessary treatment, but it would be hard to prove that because they would either have died without getting treatment or looked like someone who didn't bother testing until it was too late. They probably exist, but they're less likely to know it.
> Holmes in an emotional speech told the court that she regretted her failings and having failed the employees, investors, and patients she tried to serve.
This is not true - should it be in quotation marks? She didn't fail people she tried to serve; she deliberately claimed for millions of dollars and crazy amounts of press that something that is currently impossible was in the process of being fully industrialised. That's not failing people you tried to serve.
I always thought there were two possibilities here:
The charitable one: That she had a what if moment. What if we could come up with a technology that would allow us to diagnose a huge number of diseases from a tiny sample of blood. Now there are plenty of doctors and scientists who could tell you a whole number of reasons why this would be hard, but being charitable maybe she thought it might be possible. Maybe it came from a misunderstanding of how this shit actually works, who knows? But the pressed ahead anyway. Until the investors money ran out and the project was no further forward. And then naively she decided to get more investment because surely the quantum leap was right around the corner. Repeat until the investors have had enough and they call the cops.
The uncharitable one: She's a con artist.
...Theranos was small beer. The company was just guilty of wishful thinking (and overenthusiastic marketing). If that truly is a crime then most of SV would be in the clink.
While crypto itself is mostly uninteresting/harmless it does have the characteristic of an unregulated security. In the creative hands of the financial engineers it turns into a monster that can fleece more investors for more money and at a speed that a Theranos could only dream of. The problem isn't the asset, though -- its uusally straightforward enough to tell whether something has intrinsic value or not but once its been sliced, diced, securitzed, sold and resold the people who end up with the stuff haven't a clue what they've bought. Its like subprime without the inconvenience of having to mess with tangible assets like housing.
The evidence for the prosecution, m’lud ...... https://cryptome.org/2022/11/holmes-1655.pdf
And Holmes' Preliminary Statement/Mea Culpa is not surprisingly similar to the squawking all are hearing from Sam Bankman-Fried of very recent FTX and Alameda collapse fame/infamy ...
"I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again,” .... SBF Issues Another Rambling Apology And "Description Of What Happened", Comes Off As Disturbed Sociopath
Unfortunately such rampant cynical pre-meditated criminal abuse is not confined to, and professionally argued to be acceptable, only in America.
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