10 ms·

> Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this. An elite, highly politically connect

> Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this. An elite, highly politically connected, young, blonde, Caucasian woman will not spend time in prison for a dubious charge of white collar crime. There is little to no hope of that in today's society, regardless of how damaging her actions are. Edit: I'd love to be proven wrong on this comment, but I don't have much faith that this will ever come to happen. It is laughable to think that the American justice system is actually neutral across races or socioeconomic lines. Also, I agree that Theranos is toast. I just think it will try to become toast somewhat quietly.

rbcgerard 10y ago
Martha Stewart?
thucydides 10y ago
We shall see.
imjk 10y ago
I guess you've never heard of Martha Stewart then. I'm only joking of course.
dragonmum 10y ago
> a dubious charge Given what has come out so far, is the charge of criminally misrepresenting the efficacy of the product really dubious?
- deleted 10y ago
  [deleted]
downandout 10y ago
It's called fraud, and she defrauded and embarrassed many of the people she is "connected" to. Despite your assertion to the contrary, many white people have gone to jail for fraud. I also don't think there is much behind-the-scenes lobbying happening on her behalf (in fact there may be some lobbying against her).
- micaksica 10y ago
  IANAL, but federal criminal procedure requires more than just a smell of fraud to convict someone in a federal court. A Federal prosecutor either needs a political bone to pick or a pretty easy to convict case to push for charges. Federal prosecutors have limited time and pick things that either grant them political expediency or they believe that they have enough evidence that the person they are going after is going to end up convicted with some certainty. The problem here is not that Theranos has failed or has misrepresented the product, it's that Holmes personally needs to have been found to directly misrepresent the company in a fraudulent fashion. Her and Theranos can likely be sued (as civil cases require "preponderance of evidence") but I highly doubt you can prove fraud beyond a reasonable doubt unless there is a much greater scandal that is unearthed during an investigation. And that's probably not going to happen. So let's talk about a federal investigation of Theranos, then: this is someone who has had James Mattis, the current prime candidate for Secretary of Defense, for help and sits on the board of Theranos [1]. She is connected to most of the political elite (Kissinger et al, all of the VC/finance world.) If anyone can put down an FBI investigation on her person, it would be someone this well connected to organizations that the FBI themselves lean upon in some way or another. This is Washington, and let's be real, favors are favors. Helping one of these guys somewhere in some way buys you favors, and you may be able to trade to get the investigation off of your back. Furthermore, what stands to be gained by all of those on this board in power by prosecuting Holmes? It would tarnish the reputation of potential cabinet members and all others in Washington that "believed in" Holmes and her ideas. The political PR nightmare for these guys isn't worth the trouble of being involved in this. It becomes scandal for them. They would best see the company fade into irrelevance, and begin setting up the message that this is just another failed entrepreneurial case, of people making a moonshot and missing it. Tell Holmes it's OK, give her a powerful position in some healthcare think tank, and be on your way. Also, what message does it stand to give the American public that have been sold on this visionary? The PR storm told people here is a white, female college dropout who hit the Forbes list and achieved the American dream. Do you really want to start a news cycle where Holmes is now being thrown in prison? Do you want that message, especially when so much of Washington is connected to it? That's emotionally heartbreaking to many. So there's no bone to pick, if anything negative political blowback, an uncertain ability to prove Holmes herself defrauded people, and enough political power to tell the FBI to look at someone else. This is why I say there's little to no hope of her going to prison for this. Holmes knows what she is doing on that front, even if her visions didn't fully materialize. She has played the PR game pretty well up until this point, shoved her chips all in on the moonshot, and failed to deliver the goods. Frankly, I think she has thought all this through and her bets are on what I've said above. The question is whether or not this line of thinking is incorrect. I am armchairing it, and her life is on the line. [1] http://www.fiercebiotech.com/medical-devices/theranos-asked-military-general-for-help-tamping-down-misinformation-from-dod http://www.fiercebiotech.com/medical-devices/theranos-asked-...
akeck 10y ago
Martha Stewart?
- madeofpalk 10y ago
  Orange Is The New Black?
- derrickdirge 10y ago
  I suppose she was twice Elizabeth Holmes's age when she was incarcerated, but otherwise she ticks every box on the 'there's no way she'll do time' checklist.
  - wavefunction 10y ago
    She was a convenient sop. Who cares if Martha Stewart engages in a little insider trading while we've got the "financial professionals" leading our countries into economic ruin and socialized bailouts of professed "experts."
    - wavefunction 10y ago
      Downvote cause you have nothing to offer in reply. I have karma to burn for days.
    - icebraining 10y ago
      The whole point made by micaksica was that people like her (elite, politically connected, white, women, etc) wouldn't be convicted. If she was just a sop, then the counterexample is even stronger, since it means they don't even have to do anything particularly egregious to go to jail.
  - etangent 10y ago
    Out of curiosity, why do you think we should be more lenient on old people than we are on young? Older people tend to be more connected than young ones, on average.
deleted 10y ago
[deleted]
brian-armstrong 10y ago
Three words for you: Law and order
- MaxfordAndSons 10y ago
  I think you misunderstand the phrase. It's a euphemism, relating to people and crimes about as far removed as possible from Holmes and her fraud.
  - brian-armstrong 10y ago
    I meant it in a sarcastic way. Sadly that doesn't come through text.
rayiner 10y ago
Why would you like to be proven wrong if you think the charge against her would be "dubious?"
- micaksica 10y ago
  Well, if the charge is dubious, that's fine. I don't want to be proven wrong. I want the courts to work. I don't want someone prosecuted over a half-case. Emotionally, I'd like to see a smoking gun, and I'd like to believe that corporate leadership will be held accountable for misrepresentation of their company. I don't believe that it's good for society that you can gain financial wealth or political influence by selling people nothing more than a lot of hot air, and startups/entrepreneurs have enough snake oil as-is. Theranos being able to succeed at this type of behavior gives others the incentive to attempt the same behavior themselves. I believe that companies should have to provide social value for success, not promise everyone a lot of social value with no ability to return. I don't believe that "fake it til you make it" shouldn't be a viable corporate structure for any startup. Take VC with an idea, execute on your idea, profit. Steps 1 and 2 should not be able to be easily inverted for as long and as far as Theranos has taken it.
deleted 10y ago
[deleted]
LargeCompanies 10y ago
Martha Stewart served sometime then house arrest now a cooking show with Snoop Dog. Her criminal record is worse then his and his persona has been about thug life(not that he is at all).
mimimimi 10y ago
Very true indeed. Trump got elected. That pretty much means that as long as you have power and say the right things you can get away with almost anything. I used to be stupid enough to believe this was not true in our country but god bless Trump, he opened my eyes.
- jamiek88 10y ago
  Me too. This isn't even political to me, this is psychological. A whole new world of how to deal with the public and media. It's blown my mind.
  - mimimimi 10y ago
    Same here. I keep thinking that there must be a way to legally take advantage of people that will easily believe Trump's lies. There just have to be a way, anybody have any good startup ideas? I'm not joking. Half the country is willing to elect Trump. I'm sure there is a market there.
    - deleted 10y ago
      [deleted]
    - icebraining 10y ago
      https://news.ycombinator.com/item?id=13027976 https://news.ycombinator.com/item?id=13027976
      - deleted 10y ago
        [deleted]
    - benatkin 10y ago
      How about Televangelism or Multi-Level Marketing?
    - JanezStupar 10y ago
      Have you considered the opposite? That perchance, Trump supporters may not be all the bad stuff some folks believe them to be. And that you are being a sheep and taken advantage off, by smart Trump supporters? Just asking.
Spooky23 10y ago
That's a pretty ignorant statement. How do you explain Martha Stewart? Typically principals in schemes like this are smart enough to avoid direct links and work through minions. Based on the story on Ars Technica (http://arstechnica.com/science/2016/11/the-personal-bloodbath-behind-theranos-rise-and-fall/ http://arstechnica.com/science/2016/11/the-personal-bloodbat...) she personally retailiated against someone who pointed out some of the problems with the business. If Ars has that story, you can bet the US Attorney will get stories at least as juicy and incriminating.
- oh_sigh 10y ago
  She's not young
  - deleted 10y ago
    [deleted]
- cmdrfred 10y ago
  Martha Stewart isn't all that wealthy or politically connected. Have a case from this decade?
  - Spooky23 10y ago
    Uh, no. She owned a healthy portion of a public company and hung out with plenty of political types.
spraak 10y ago
It's refreshing to see on HN more people aware of injustice based on skin/race, thank you!
Lewton 10y ago
Will you update your views of the American justice system if she ends up in jail?
- micaksica 10y ago
  Yes. That is the only rational thing to do.
deleted 10y ago
[deleted]
deleted 10y ago
[deleted]
xeno6696 10y ago
Whites are convicted of fraud far more often than any other race: https://ucr.fbi.gov/crime-in-the-u.s/2013/crime-in-the-u.s.-2013/tables/table-43 https://ucr.fbi.gov/crime-in-the-u.s/2013/crime-in-the-u.s.-...
- deleted 10y ago
  [deleted]
- exolymph 10y ago
  It's not the absolute numbers that matter, it's the proportional ones.
  - JanezStupar 10y ago
    What do you mean?
  - otalp 10y ago
    That's right, and in that statistic it shows that 66% of people arrested for fraud are white, which is not disproportionately low, and only 1% of those arrested are Asian. I mean from the raw numbers provided by the FBI it's impossible to conclude if there is a bias or not, since only a minority of the cases where people are arrested for fraud are high profile.
hueving 10y ago
Do you have any stats showing minorities are convicted of white collar crimes more frequently than Caucasians? Or is this just flame bait?
macspoofing 10y ago
Your comment (like this response) adds nothing to the discussion.
cowsandmilk 10y ago
Completely agree that she won't spend time in prison. Those pointing to Martha Stewart and Enron are underestimating how connected Elizabeth Holmes is. Enron didn't have members of the board like Henry Kissinger, Bill Frist, and Sam Nunn. Normal companies don't have those people and certainly normal startups don't have those people. Holmes had easy access to high level members of government at the early stages of her company. Her connections are much stronger and higher level than anything Martha Stewart has/had. Of course, I would argue Elizabeth Holmes committed much worse crimes.
- SilasX 10y ago
  But IIRC, Ken Lay was on the short list for Energy Secretary, so he was definitely connected.

rbcgerard 10y ago

Martha Stewart?

thucydides 10y ago

We shall see.

imjk 10y ago

I guess you've never heard of Martha Stewart then. I'm only joking of course.

dragonmum 10y ago

> a dubious charge Given what has come out so far, is the charge of criminally misrepresenting the efficacy of the product really dubious?

deleted 10y ago
[deleted]

downandout 10y ago

It's called fraud, and she defrauded and embarrassed many of the people she is "connected" to. Despite your assertion to the contrary, many white people have gone to jail for fraud. I also don't think there is much behind-the-scenes lobbying happening on her behalf (in fact there may be some lobbying against her).

micaksica 10y ago
IANAL, but federal criminal procedure requires more than just a smell of fraud to convict someone in a federal court. A Federal prosecutor either needs a political bone to pick or a pretty easy to convict case to push for charges. Federal prosecutors have limited time and pick things that either grant them political expediency or they believe that they have enough evidence that the person they are going after is going to end up convicted with some certainty. The problem here is not that Theranos has failed or has misrepresented the product, it's that Holmes personally needs to have been found to directly misrepresent the company in a fraudulent fashion. Her and Theranos can likely be sued (as civil cases require "preponderance of evidence") but I highly doubt you can prove fraud beyond a reasonable doubt unless there is a much greater scandal that is unearthed during an investigation. And that's probably not going to happen. So let's talk about a federal investigation of Theranos, then: this is someone who has had James Mattis, the current prime candidate for Secretary of Defense, for help and sits on the board of Theranos [1]. She is connected to most of the political elite (Kissinger et al, all of the VC/finance world.) If anyone can put down an FBI investigation on her person, it would be someone this well connected to organizations that the FBI themselves lean upon in some way or another. This is Washington, and let's be real, favors are favors. Helping one of these guys somewhere in some way buys you favors, and you may be able to trade to get the investigation off of your back. Furthermore, what stands to be gained by all of those on this board in power by prosecuting Holmes? It would tarnish the reputation of potential cabinet members and all others in Washington that "believed in" Holmes and her ideas. The political PR nightmare for these guys isn't worth the trouble of being involved in this. It becomes scandal for them. They would best see the company fade into irrelevance, and begin setting up the message that this is just another failed entrepreneurial case, of people making a moonshot and missing it. Tell Holmes it's OK, give her a powerful position in some healthcare think tank, and be on your way. Also, what message does it stand to give the American public that have been sold on this visionary? The PR storm told people here is a white, female college dropout who hit the Forbes list and achieved the American dream. Do you really want to start a news cycle where Holmes is now being thrown in prison? Do you want that message, especially when so much of Washington is connected to it? That's emotionally heartbreaking to many. So there's no bone to pick, if anything negative political blowback, an uncertain ability to prove Holmes herself defrauded people, and enough political power to tell the FBI to look at someone else. This is why I say there's little to no hope of her going to prison for this. Holmes knows what she is doing on that front, even if her visions didn't fully materialize. She has played the PR game pretty well up until this point, shoved her chips all in on the moonshot, and failed to deliver the goods. Frankly, I think she has thought all this through and her bets are on what I've said above. The question is whether or not this line of thinking is incorrect. I am armchairing it, and her life is on the line. [1] http://www.fiercebiotech.com/medical-devices/theranos-asked-military-general-for-help-tamping-down-misinformation-from-dod http://www.fiercebiotech.com/medical-devices/theranos-asked-...

akeck 10y ago

Martha Stewart?

madeofpalk 10y ago
Orange Is The New Black?
derrickdirge 10y ago
I suppose she was twice Elizabeth Holmes's age when she was incarcerated, but otherwise she ticks every box on the 'there's no way she'll do time' checklist.
- wavefunction 10y ago
  She was a convenient sop. Who cares if Martha Stewart engages in a little insider trading while we've got the "financial professionals" leading our countries into economic ruin and socialized bailouts of professed "experts."
  - wavefunction 10y ago
    Downvote cause you have nothing to offer in reply. I have karma to burn for days.
  - icebraining 10y ago
    The whole point made by micaksica was that people like her (elite, politically connected, white, women, etc) wouldn't be convicted. If she was just a sop, then the counterexample is even stronger, since it means they don't even have to do anything particularly egregious to go to jail.
- etangent 10y ago
  Out of curiosity, why do you think we should be more lenient on old people than we are on young? Older people tend to be more connected than young ones, on average.

deleted 10y ago

[deleted]

brian-armstrong 10y ago

Three words for you: Law and order

MaxfordAndSons 10y ago
I think you misunderstand the phrase. It's a euphemism, relating to people and crimes about as far removed as possible from Holmes and her fraud.
- brian-armstrong 10y ago
  I meant it in a sarcastic way. Sadly that doesn't come through text.

rayiner 10y ago

Why would you like to be proven wrong if you think the charge against her would be "dubious?"

micaksica 10y ago
Well, if the charge is dubious, that's fine. I don't want to be proven wrong. I want the courts to work. I don't want someone prosecuted over a half-case. Emotionally, I'd like to see a smoking gun, and I'd like to believe that corporate leadership will be held accountable for misrepresentation of their company. I don't believe that it's good for society that you can gain financial wealth or political influence by selling people nothing more than a lot of hot air, and startups/entrepreneurs have enough snake oil as-is. Theranos being able to succeed at this type of behavior gives others the incentive to attempt the same behavior themselves. I believe that companies should have to provide social value for success, not promise everyone a lot of social value with no ability to return. I don't believe that "fake it til you make it" shouldn't be a viable corporate structure for any startup. Take VC with an idea, execute on your idea, profit. Steps 1 and 2 should not be able to be easily inverted for as long and as far as Theranos has taken it.

deleted 10y ago

[deleted]

LargeCompanies 10y ago

Martha Stewart served sometime then house arrest now a cooking show with Snoop Dog. Her criminal record is worse then his and his persona has been about thug life(not that he is at all).

mimimimi 10y ago

Very true indeed. Trump got elected. That pretty much means that as long as you have power and say the right things you can get away with almost anything. I used to be stupid enough to believe this was not true in our country but god bless Trump, he opened my eyes.

jamiek88 10y ago
Me too. This isn't even political to me, this is psychological. A whole new world of how to deal with the public and media. It's blown my mind.
- mimimimi 10y ago
  Same here. I keep thinking that there must be a way to legally take advantage of people that will easily believe Trump's lies. There just have to be a way, anybody have any good startup ideas? I'm not joking. Half the country is willing to elect Trump. I'm sure there is a market there.
  - deleted 10y ago
    [deleted]
  - icebraining 10y ago
    https://news.ycombinator.com/item?id=13027976 https://news.ycombinator.com/item?id=13027976
    - deleted 10y ago
      [deleted]
  - benatkin 10y ago
    How about Televangelism or Multi-Level Marketing?
  - JanezStupar 10y ago
    Have you considered the opposite? That perchance, Trump supporters may not be all the bad stuff some folks believe them to be. And that you are being a sheep and taken advantage off, by smart Trump supporters? Just asking.

Spooky23 10y ago

That's a pretty ignorant statement. How do you explain Martha Stewart? Typically principals in schemes like this are smart enough to avoid direct links and work through minions. Based on the story on Ars Technica (http://arstechnica.com/science/2016/11/the-personal-bloodbath-behind-theranos-rise-and-fall/ http://arstechnica.com/science/2016/11/the-personal-bloodbat...) she personally retailiated against someone who pointed out some of the problems with the business. If Ars has that story, you can bet the US Attorney will get stories at least as juicy and incriminating.

oh_sigh 10y ago
She's not young
- deleted 10y ago
  [deleted]
cmdrfred 10y ago
Martha Stewart isn't all that wealthy or politically connected. Have a case from this decade?
- Spooky23 10y ago
  Uh, no. She owned a healthy portion of a public company and hung out with plenty of political types.

spraak 10y ago

It's refreshing to see on HN more people aware of injustice based on skin/race, thank you!

Lewton 10y ago

Will you update your views of the American justice system if she ends up in jail?

micaksica 10y ago
Yes. That is the only rational thing to do.

deleted 10y ago

[deleted]

deleted 10y ago

[deleted]

xeno6696 10y ago

Whites are convicted of fraud far more often than any other race: https://ucr.fbi.gov/crime-in-the-u.s/2013/crime-in-the-u.s.-2013/tables/table-43 https://ucr.fbi.gov/crime-in-the-u.s/2013/crime-in-the-u.s.-...

deleted 10y ago
[deleted]
exolymph 10y ago
It's not the absolute numbers that matter, it's the proportional ones.
- JanezStupar 10y ago
  What do you mean?
- otalp 10y ago
  That's right, and in that statistic it shows that 66% of people arrested for fraud are white, which is not disproportionately low, and only 1% of those arrested are Asian. I mean from the raw numbers provided by the FBI it's impossible to conclude if there is a bias or not, since only a minority of the cases where people are arrested for fraud are high profile.

hueving 10y ago

Do you have any stats showing minorities are convicted of white collar crimes more frequently than Caucasians? Or is this just flame bait?

macspoofing 10y ago

Your comment (like this response) adds nothing to the discussion.

cowsandmilk 10y ago

Completely agree that she won't spend time in prison. Those pointing to Martha Stewart and Enron are underestimating how connected Elizabeth Holmes is. Enron didn't have members of the board like Henry Kissinger, Bill Frist, and Sam Nunn. Normal companies don't have those people and certainly normal startups don't have those people. Holmes had easy access to high level members of government at the early stages of her company. Her connections are much stronger and higher level than anything Martha Stewart has/had. Of course, I would argue Elizabeth Holmes committed much worse crimes.

SilasX 10y ago
But IIRC, Ken Lay was on the short list for Energy Secretary, so he was definitely connected.