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It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Investors know that every

It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans. But a patient does not expect for their blood test results to be completely wrong. Her tests weren't giving false-negatives or false-positives, they were using lab techniques that we have known to be inaccurate for decades. She knowingly sold Walgreens on 1 test, and then performed a different test. I need to sit down and properly inform myself about how the prosecutors fucked that up so badly.

bee_rider 5y ago
Is this actually the end of her legal trouble? I assumed they were pushing the financial stuff because it is relatively easy to prove, and would go after her for more serious medical crimes over time.
danjac 5y ago
It's a bit like Al Capone being done for tax evasion rather than murder - you convict them on the charges that have the most evidence and are likely to stand up in court, even if they are lesser charges from a criminal and moral standpoint.
stock_toaster 5y ago
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Not excusing it, but maybe it was a company vs personal thing (eg. consumer harm perhaps didn't pierce the corporate veil[1]). Whereas Fraud against investors is much more of a personal/individual thing. [1]: https://www.law.cornell.edu/wex/piercing_the_corporate_veil https://www.law.cornell.edu/wex/piercing_the_corporate_veil
- rectang 5y ago
  In other words, successful "fraud laundering".
gitfan86 5y ago
Fraud means that you lied for personal gain. There is more evidence of her lying directly to investors than to patients.
dathinab 5y ago
> defrauding patients about their test results Because und test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything. And what the user bought was the test result. As far as I understood, with my very limited understanding of US law it seems hard to sue as a consumer as you where deceived but not hurt/damaged in any way.
- schappim 5y ago
  >> test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything. Guess they just answered the question of "If you can't tell the difference, does it matter?".
- buzzdenver 5y ago
  Wasn't Theranos' claim that they could do tests from much less blood? So how could the results be accurate if they presumably didn't have enough samples?
  - cpitman 5y ago
    They were often doing full blood draws, not finger pricks.
  - azernik 5y ago
    During the purported early use of their technology, they were also taking full-size blood draws for "validation" against existing machines, i.e. the results were actually from off-the-shelf full-sample-size machines.
- rossdavidh 5y ago
  If Theranos still existed as a company, some of their results were bogus enough that they probably could get sued (IANAL). But Theranos doesn't exist any more.
- ClumsyPilot 5y ago
  "test results where in general correctish" "we gave you treatmemt for wrong type of cancer, close enought!"
trimbo 5y ago
Could this be because they were secretly doing the testing using traditional lab testing machines (as described in Bad Blood)? Maybe that made it hard to prove any specific test was tainted.
l33tman 5y ago
My layman's interpretation is that she willingly defrauded investors but did in fact deliver test results to the patients, albeit at a lower quality level than you would expect in the industry. I think in the HBO documentary they say the unravelling started because of FDA complaints on the bloodwork being sub par. But I think you can't jail someone for 120 years because they did a shoddy product. Maybe the prosecutors simply went for the biggest bang for their buck?
- thallium205 5y ago
  Prosecution went for both, but the jury only agreed with the fraud.
kjaftaedi 5y ago
They had a fully functional lab though, it just wasn't using Theranos' devices. This is what they did to Wallgreens, they sold them on the idea that they would have theranos machines in-store, but instead what they did was do IV blood draws (calling it a comparison check) .. and then would just process the samples the same way as everyone else using standard equipment. People were getting good results because Theranos was using machines from Siemens in their hidden lab.
- justinator 5y ago
  I believe they also reverse engineered a lot of the third party machines, in an attempt to make them work the way they wanted to. That's... that's bad.
  - keypusher 5y ago
    But not illegal, except under very specific circumstances.
  - ghshephard 5y ago
    I think that's entirely fine - both for patients and investors (Siemens might be a bit Irate, but I don't know if I would put that in the "Bad" category). The issue would be if they informed their investors that tests were being done on Theranos technology, but were actually using siemens technology. With regards to the patients - all they should care about is accuracy of test results - whether Theranos was doing it with Theranos tech, Siemens Tech, Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient - they just want to get the highest quality information possible, regardless of the route taken.
    - jmcgough 5y ago
      > Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient Those machines weren't designed to work that way though, so the test results were wildly inaccurate when they did dilutions. And they fired people who wanted to delay rollout in order to ensure that they had consistently accurate results.
bellyfullofbac 5y ago
Iirc with Fyre Festival the dude got convicted of wire fraud for defrauding an investor, not for selling tickets to a sham festival. The joke was, screw the small people, that's fine, screw a rich investor, that's when you go to jail...
- schoen 5y ago
  "Everything is securities fraud" https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
- mardifoufs 5y ago
  It's more that wire fraud can cover pretty much anything, making it a lot easier for the feds to get a conviction. Plus, the charges weren't related to the festival or its investors; it was for a whole different scammy "venture." I'm not even sure they could be criminally charged for a sham festival since the festival did actually happen. I'd imagine that the whole thing turning out to be a complete wreck would probably be something that could be handled in a civil case.
berberous 5y ago
>> Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans. The above does not excuse fraud. Investors know their investments are risky, but that does not give you permission to deliberately lie or mislead, with an intent to deceive the potential investor. For example, if you tell investors that you anticipate getting $50M in new contracts over the next year, well, assuming you mean it in good faith, that's not fraud even if it doesn't pan out or was delusional to begin with. If you tell an investor you just signed a contract for $50M, in order to get them to invest, and that's a total lie, that's fraud. Whether or not the investor did appropriate due diligence to confirm that fact or not, it's still criminal.
- deleted 5y ago
  [deleted]
- chihuahua 5y ago
  In one sense you are correct, just because investors are knowingly making speculative investments, that doesn't make it OK to defraud them. On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. It would be unreasonable to expect patients requesting a blood test to be suspicious and question the results.
  - hn_throwaway_99 5y ago
    > On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. If you've ever dealt with competent VCs, they are very skeptical, which is why they pretty much ignore your forward looking statements and just look at your current data. And the reason they do that is because forward looking statements can be all kinds of BS, but current data is just facts (unless you're lying about them, in which case it's fraud). Of course, they also want to know your vision and drive for the future, but they'll basically ignore statements like "We have 10 big deals I'm the pipeline" and just say "How many signed contracts do you have?"
GhostVII 5y ago
There was pretty strong evidence she defrauded investors, lots of hard evidence of her making claims that we now know aren't true. I haven't heard much strong evidence that she intentionally defrauded patients though. I think it is totally possible that she lied to investors about Theranos's capabilities (ex. How many tests they could run), while still thinking that the tests they were running were accurate.
dmix 5y ago
They farmed out the patient results to real machines pretending they were using Theranos. So they were technically real.
- lbriner 5y ago
  As other posters have commented, since they were claiming results from much smaller samples, these "good" machines weren't given the amount of blood required for reliable results so this is also fraudulent and much worse imho because the people operating these machines must have know they were artifically amplifying samples.
a-dub 5y ago
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. my thoughts exactly. i'm woefully underread on the whole situation but something is weird and different about it. one thing that does jump to mind is that the investor list and board composition isn't what i'm used to seeing for stem ventures. i can imagine that perhaps they're less forgiving of failure and were operating with more blind trust in company leadership on stem/technology matters.
- 300bps 5y ago
  To me it seems like a simple matter of don't mess with people that have money.
- csours 5y ago
  My impression is that the defense put the onus on the lab directors etc and that she didn't know what was going on. I don't buy that, but the jury is supposed to go on only evidence presented at the trial, so I guess the defense did a good job.
- eternalban 5y ago
  It’s the elephant in the room. Hardly ever remarked upon but a complete head scratcher. This company is fated to play a staring role in at least one conspiracy theory going forward.
  - CRConrad 5y ago
    A useful reminder (in advance) that not all conspiracy theories are necessarily false.
jen20 5y ago
I've been reading Dorothy Atkins' live tweet coverage of the trial since day 1, and it gives a blow by blow account of it. It starts at [1], and runs all the way up until the verdict. Strongly recommended. [1]: https://twitter.com/doratki/status/1435590320897478657 https://twitter.com/doratki/status/1435590320897478657
- unkulunkulu 5y ago
  Great source! Thank you! For those stuck at the end of first day coverage the way I found is: type «from:doratki day 2» in search
  - unkulunkulu 5y ago
    For day 2 in particular you want the sep 14 tweet, the nov one is day 2 of Holmes testimony
gjsman-1000 5y ago
Don’t forget she is still facing 3 counts that were declared mistrialed. She could get longer.
TheCondor 5y ago
Are Walgreen's customers given any sort of guarantee about the results? I mean, if you could find someone that experience material loss from it, or death, I think they'd have a very legitimate chance to sue. It's not clear to me what promises Walgreen's is actually making though.
- InfiniteRand 5y ago
  How does it work in a case where the customer's relationship is with a reseller, but the reseller was given false information from the test maker? Is only the test maker liable, or are both the reseller and test maker liable?
simplicio 5y ago
Just going by Carryous podcast, it seems like there was a lot more hard evidence (emails, transcripts, texts, etc) that she was knowingly lying to investors. On the other hand, I don't think there was any hard proof that she didnt know the results delivered by her labs (which were using third party machines, albeit ones being used improperly), were bunk.
- chihuahua 5y ago
  I feel like John Carreyrou deserves a medal for exposing the entire scam. First in WSJ articles and then in his book, which is a great read. It's incredible how much trouble this caused for him when Theranos tried to fight him. Who knows how long the scam would have continued without him, and how many more people would have gotten bogus test results. If Tiger Woods can get a presidential medal of freedom for playing golf, it seems like it's the least they could do for Carreyrou.
- alanh 5y ago
  I agree the proof for defrauding investors was less arguable. However there were still clear indications that she should have known the tests offered to patients were unreliable. For example, Schultz told her, before resigning, that it was not OK for Theranos to continue re-running their benchmark tests until they got a passing result (kind of like shaking the magic 8 ball until it, on the fourth shake, correctly answers the question “Is today Sunday?” — then selling it as an oracle). One employee flagged it for her attention that females were getting results that should only be possible if they had prostates — and she dismissed this as well! There was other evidence introduced during court that showed she knew the tests her company was doing for customers were not as accurate as she claimed, too. I would have loved to see her found guilty on these counts as a result, and I would also love to hear about the jurors' reasoning for not doing so.
rossdavidh 5y ago
They weren't really being charged with the stuff about patients, in part I think because the communication between Holmes and investors was direct, whereas Holmes was not personally communicating with the patients. Basically, the prosecutors went for the charges that were easier to prove. If Theranos still existed as a company, it would doubtless be getting buried under a blizzard of charges relating to how Theranos, the company, treated their patients. One of several reasons why Theranos the company no longer exists.
- andrei_says_ 5y ago
  What happened to the people working for Holmes/Theranos who were doing the legwork of systematically and knowingly defrauding patients?
  - HWR_14 5y ago
    It's fairly easy to set up situations where the people doing the actual work are not knowingly defrauding anyone. The salespeople are told the machine is real, the delivery people never see inside the lab, the testers inside the lab are trained by the few people really in on it (I don't think they had the proper independent training) so they don't know how bad the tests are, and the scientists think everyone knows they're working on version 2.0 but they're told not to discuss readiness, leading the salespeople to get the wrong idea. Heck, most frauds don't want their people to know that it's a fraud - too many people raises secrecy and conscience issues.
    - andrei_says_ 5y ago
      In other words, Theranos was intentionally set up as a criminal organization?
- alanh 5y ago
  > [She wasn’t] really being charged with [wire fraud with regard to] patients Unless the word "really" is doing some heavy lifting here, this is incorrect. There were multiple counts directly and specifically related to defrauding patients. These counts came back not guilty, but they were, in fact, charged, and customers testified in court in support of these charges.
colechristensen 5y ago
Eh, what seems easiest to prove gets prosecuted. Like mob bosses getting convicted of tax evasion. The lies to patients and investors were quite well linked anyway, if you want to think about it like that.
mdoms 5y ago
My guess about the discrepancy is that the lies she told investors were more brazen and came directly from her own mouth. She told investors and journalists that Theranos was working on military contracts (no such contracts ever existed), and she straight up told investors that no third party testing was involved in Theranos test results (a lie). She directly ordered employees to omit positive test results from investors' blood tests because she didn't have confidence in the results. This is all documented and she has admitted to much of it. The lies told to patients and fraudulent test results could be (and were) denied by saying she wasn't aware of what was happening in the labs. It's not that investors are more important in the eyes of the law or that patients weren't lied to, it's about the quality of the evidence available. Her not guilty verdicts do not mean she's innocent, simply that there wasn't enough evidence available to convince a jury.
nradov 5y ago
Those patients might have standing to file a civil class action suit against Holmes. Not sure if she has enough assets left to make that worthwhile.
- hellbannedguy 5y ago
jcranmer 5y ago
It's not particularly surprising, if you assume that the jury was essentially looking for a specific, traceable line between representations from Elizabeth Holmes herself (and nobody else) and the subsequent payment as a necessary element of fraud. (Whether or not the jury was doing so could be guessed from reading the jury instructions, which I haven't done). Being found guilty of defrauding investors in that light is easy because Holmes did specific acts, such as basically saying "we're endorsed by $BIG_PHARMA" knowing that they weren't, as part of her investor pitch--that's a pretty unambiguous traceable injury. But tracing anything she herself said to getting a random schmoe on the street to take a blood test... again, if you think fraud requires that specific act, it's not hard to see why someone would vote not guilty there. Of course, I would still have liked to see her proclaimed guilty on fraud for the test results. But as abhorrent as her actions may have been, they may not have necessarily climbed the bar into illegality.
- michael1999 5y ago
  This diffusion of responsibility in corporations drives me crazy. A CEO can create a crimogenic environment, and as long as there are enough layers of management or outsourcers, you can't pin the specific crime on anyone, and you can't jail a corporation.
- gkoberger 5y ago
  I agree with everything you said, but I think the person you're replying to is less upset at the prosecutors/jury, and more upset about the laws in the first place. They protect the rich and powerful, and don't worry about the average person getting hurt.
  - saurik 5y ago
    I maybe agree that that's what that comment probably should have been focussed on, but they did explicitly cal out the "prosecutors" for having "fucked up" getting the conviction.
  - piaste 5y ago
    In this case it seems to be a matter of distance, not power. Imagine that, rather than the CEO making shit up, the case was about a lowly lab technician who faked results out of laziness or recklessness. Even though his fraud ultimately impacted the patients, he would probably still get convicted for defrauding his boss or the company he directly worked for, not the patients he never met or knew.
harha 5y ago
Makes me wonder how much of the rapidly established covid testing infrastructure around the world delivers actual results. Fun fact: In some places like Singapore you don't even get the chance to test again to verify the result, you just serve your time in quarantine and then get back your "safe" status.
- ghshephard 5y ago
  Probably for the best back in populations of close to 0 community incidence, low acquired immunity, and prior to the vaccines being available. Better to have a few hundred (few thousand?) people incorrectly spend time in quarantine, than to have community spread results in people/businesses being locked down.
  - harha 5y ago
    That's the state right now with almost all of the population vaccinated. I don't think it's for the best, it ignores any other medical conditions and offers no way to double check a result that could come from a dodgy test center.
    - ghshephard 5y ago
      I think once their is some population immunity, that you start to put more effort into confirming people really are infectious. It's partially why I don't think the CDC rules about not requiring a test after the fifth day really matters in most places in the United States - 20+% of people in the general population are already infected in places like New York. Wearing a mask for 5 days after quarantining for 5 days, while not ideal - ensures that our medical and logistic and other critical systems keep working for the next 3-4 weeks.
- gbear605 5y ago
  At least in the last few months, at-home tests have been available to replicate lab results, and they seem to be consistent.
- amirkdv 5y ago
taf2 5y ago
Didn’t the FDA approve her tests… Yup - https://www.businessinsider.com/theranos-gets-fda-approval-2015-7?amp https://www.businessinsider.com/theranos-gets-fda-approval-2...
- phonon 5y ago
  That was just one test, for Herpes.
- HWR_14 5y ago
  They approved the Herpes test not all the other tests she was selling. And they approved it after they had been selling other tests for over a year.
TeeMassive 5y ago
Weren't they secretly testing blood samples with actual working machines?
- HWR_14 5y ago
  In some cases they were, in other cases they tried their machines. Even when they used the real machines, it's unclear if they had enough blood, skilled operators, time and maintenance to generate accurate results.
- tcoff91 5y ago
  They misused the real machines. I highly recommend reading or listening to Bad Blood. Excellent book, I could hardly put it down.
lr4444lr 5y ago
It upsets me, but I wouldn't say "blows my mind". Prosecutors need to focus their strike where the charges are the strongest against well armored defendants. The people who suffered health-wise will now be able to more easily win civil suits, which will help them more than adding jail time to her impending swntence.
hatware 5y ago
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Maybe it's just me, but with all the anti-consumer practices going on, it doesn't surprise me in the least. Gotta protect those profits.
sundvor 5y ago
Well, they got Al Capone on tax evasion... In my own mind, the test result fraud is far worse ethically - however as long as she is locked up, it still works.
- lbriner 5y ago
  This wouldn't be satisfying. It is hard to accept that one person was responsible for all of the dishonesty. Even if you were "only" the CFO or COO, you must know what is happening in the company. What about all of the scientists who must have knowingly been reporting results that were not consistent with best (or legal) practice? There is obviously a culture issue with "white collar" crime and a large hole in most countries ability to correctly police what is and isn't acceptable. There are also questions around "business secrets" and how these were used to justify a lack of scrutiny or due-diligence.
jlduan 5y ago
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Not excusing it. But maybe the jurors think the doctors and/or insurance companies ordered/interpreted these tests have some responsibilities too?
secondaryacct 5y ago
But then you must charge all the employees who did so, instead of her. Her crime is fraud because she told investor one thing and commanded employees another. But it's not the army, they could refuse, they all did the tests and gave the false results back to humans, which is unfathomable in healthcare. She s eventually responsible but her job was on investor relationship.
- HWR_14 5y ago
  > But it's not the army, they could refuse Officers are not only allowed to, but required to, refuse illegal orders in the Army. Enlisted troops are allowed the "just following orders" excuse, but not officers who should know better.
  - dragonwriter 5y ago
    > Enlisted troops are allowed the "just following orders" excuse Within certain bounds; even enlisted can be convicted of crimes for following palpably unlawful orders.
abosley 5y ago
Go research wire fraud.
helsinkiandrew 5y ago
“Everything is securities fraud”. I can’t find details of the specific wire fraud charges that she was found guilty of, but it is far easier to find and prove technical breeches of law (documents showing X was claimed to investors to obtain money when other documents show it wasn’t true) than proving intent or knowledge by the accused beforehand.
- alanh 5y ago
  Money Stuff reader detected (Me too)
nopenopenopeno 5y ago
Juries are not the brightest bunch. Anyone with even the most fleeting ability for critical thought can avoid jury duty. This is by design, of course.
- nroach 5y ago
  Some people choose to serve on juries out of a sense of civic responsibility and don’t seek exclusion.
  - nopenopenopeno 5y ago
    Why would I believe that happens to any measurable extent? I mean, sounds nice but it also sounds like a fairy tale.
    - avgcorrection 5y ago
      That oneself and one’s peers are smart and most everyone else is an idiot is an even more enticing fairy tale.
      - nopenopenopeno 5y ago
        That’s not even close to my point.
    - bigbillheck 5y ago
      A couple years ago the only reason I wasn't on a jury was because I wasn't one of the people whose name was randomly drawn, after they'd filtered out everybody who was unable to serve or had other conflicts that would make them unfit (such as 'visceral opinions about the nature of the charges'). Could I have gotten out of it? Sure. Could I have gotten out of it without lying under oath? I don't see how.
      - nopenopenopeno 5y ago
        “without lying under oath”
jjav 5y ago
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Exactly. This is the exact opposite of the justice I'd expect. Invest money? Expect to lose it most of the time, that's the game. Pay for a service? There should be an expectation of honest delivery of said service.
hef19898 5y ago
Didn't they use real lab equipment to conduct real tests? In which case the results would be ok, it just wasn't the tech she promised. Quite a while I read something about the details, so.
- thallium205 5y ago
  They didn't run a traditional test all the time.
gigatexal 5y ago
I get that investors should know any investment can go to 0. But she was defrauding them by outright lying about how well the tech worked and what it could do. This verdict I think restores that contract between entrepreneurs and investors by saying if both invest in good faith then the whole thing works out. Otherwise we allow grifters like her and her business partner to suck good money out of the system. Now future folks who would try to do the same have this verdict to look at. Patients who were wronged by the company did get screwed though. Such is the nature of trials by jury sometimes the jury doesn’t come through.
shultays 5y ago
> Investors know that every dollar they put into a company could disappear Is not it kinda different if you are being lied though? If Holmes were faking her accomplishments and you investments were depending on those then I don't see why this wouldn't be fraud If the patients were still getting correct results (I assume they were still being tested, but in traditional ways) then it makes sense that they were not being scammed
1vuio0pswjnm7 5y ago
"But a patient does not expect for their blood test results to be completely wrong." The patient's state of mind, e.g., their expectations, is not an element of wire fraud. Only Holmes' state of mind is relevant; specifically, her intent.
- 1vuio0pswjnm7 5y ago
  "As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success.34 It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendants communications were reasonably calculated to deceive persons of ordinary prudence and comprehension.35 Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a nave victim.36 Nevertheless, the courts have long acknowledged the possibility of a puffing defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent.37 In any event, the question may be more clearly presented in the context of the defendants intent and the materiality of the deception.38" https://sgp.fas.org/crs/misc/R41930.pdf https://sgp.fas.org/crs/misc/R41930.pdf "In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception." Whether a patient expected that results might be inaccurate, or even whether a "reasonably prudent" person would have expected results might be inaccurate, is not necessarily a defence to wire fraud. Even if such a defence were asserted, the focus would still be on Holmes, her conduct and her intent, not the patient.
deleted 5y ago
[deleted]
Someone 5y ago
FTA: “This case was specifically about what Holmes told Theranos investors, although her lies also impacted partners and patients.“ If that’s true, it isn’t surprising she wasn’t found guilty for defrauding patients, and more cases (¿maybe one focusing on partners and one focusing on patients?) could follow. I don’t know whether something like that is in the pipeline. Edit: reading https://en.wikipedia.org/wiki/Elizabeth_Holmes#Criminal_charges https://en.wikipedia.org/wiki/Elizabeth_Holmes#Criminal_char..., that’s unlikely to happen: “In February 2020, Holmes's defense requested a federal court to drop all charges against her and her co-defendant Balwani. A federal judge examined the charges and ruled that some charges should be dropped: since the Theranos blood tests were paid for by medical insurance companies, the patients were not deprived of any money or property. Prosecutors would hence not be allowed to argue that doctors and patients were fraud victims. However, the judge kept the 11 charges of wire fraud” I think that leaves open prosecuting for something else than fraud for knowingly delivering unreliable test results, but wouldn’t know what that “something else” would be.
- starfallg 5y ago
  Yes, negligence would be that something else. Theranos had a duty of care to the patients and they very blatantly breached that duty. Fraud deals with purely financial loss, while negligence deals with harm which is much wider in scope.
  - necovek 5y ago
    I am neither American nor a native English speaker, but I always thought fraud was mostly a deliberate action, and negligence was mostly resulting out of either lack of action or accidental consequences of an action. So if a company deliberately and knowingly markets a "sepsis-test" that puts out completely random results and leads to people getting their limbs amputated (bear with me, I know the example is terrible), they can only be held responsible for "negligence" by those patients? Or would patients only be able to claim financial loss due to fraudulent loss of work ability and such? There was similar reporting of those prenatal genetic tests a few days ago (they have led to unnecessary pregnancy abortions due to incorrect results), and I wonder what corrective action we can do to ensure these things don't happen?
spoonjim 5y ago
Cf. Sacklers.
isolli 5y ago
Could it be related to the "Everything is securities fraud" [0] theory? If it's easier to prove that someone defrauded investors, then this is what prosecutors will go for. Side note: I highly recommend subscribing to Matt Levine's newsletter. [0] https://www.bloomberg.com/opinion/articles/2021-02-03/goldman-sachs-goes-to-supreme-court-hedge-funds-won-on-gamestop-kkpoe6ws https://www.bloomberg.com/opinion/articles/2021-02-03/goldma... > As I often write, this theory can turn anything bad that a public company does into securities fraud [...] The stock will drop (because the bad things are bad for the company); the shareholders will sue, saying “you said you were good, we believed you, we bought the stock, but you were bad and we lost money.” And so climate change and sexual harassment and lax customer data protections and mistreatment of orcas can all be transmuted into securities fraud.
pdpi 5y ago
This is a criminal case, which follows stricter rules than civil action. The relationship between Holmes personally and the investors is clear enough, but I can see how any claim of her committing fraud against the patients is much subtler and much likelier to fail.
kingkawn 5y ago
If protection of patient health was a critical component of the US healthcare system we would have a public option. We don't, so we don't. The only thing that is protected in the US is money.

bee_rider 5y ago

Is this actually the end of her legal trouble? I assumed they were pushing the financial stuff because it is relatively easy to prove, and would go after her for more serious medical crimes over time.

danjac 5y ago

It's a bit like Al Capone being done for tax evasion rather than murder - you convict them on the charges that have the most evidence and are likely to stand up in court, even if they are lesser charges from a criminal and moral standpoint.

stock_toaster 5y ago

> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Not excusing it, but maybe it was a company vs personal thing (eg. consumer harm perhaps didn't pierce the corporate veil[1]). Whereas Fraud against investors is much more of a personal/individual thing. [1]: https://www.law.cornell.edu/wex/piercing_the_corporate_veil https://www.law.cornell.edu/wex/piercing_the_corporate_veil

rectang 5y ago
In other words, successful "fraud laundering".

gitfan86 5y ago

Fraud means that you lied for personal gain. There is more evidence of her lying directly to investors than to patients.

dathinab 5y ago

> defrauding patients about their test results Because und test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything. And what the user bought was the test result. As far as I understood, with my very limited understanding of US law it seems hard to sue as a consumer as you where deceived but not hurt/damaged in any way.

schappim 5y ago
>> test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything. Guess they just answered the question of "If you can't tell the difference, does it matter?".
buzzdenver 5y ago
Wasn't Theranos' claim that they could do tests from much less blood? So how could the results be accurate if they presumably didn't have enough samples?
- cpitman 5y ago
  They were often doing full blood draws, not finger pricks.
- azernik 5y ago
  During the purported early use of their technology, they were also taking full-size blood draws for "validation" against existing machines, i.e. the results were actually from off-the-shelf full-sample-size machines.
rossdavidh 5y ago
If Theranos still existed as a company, some of their results were bogus enough that they probably could get sued (IANAL). But Theranos doesn't exist any more.
ClumsyPilot 5y ago
"test results where in general correctish" "we gave you treatmemt for wrong type of cancer, close enought!"

trimbo 5y ago

Could this be because they were secretly doing the testing using traditional lab testing machines (as described in Bad Blood)? Maybe that made it hard to prove any specific test was tainted.

l33tman 5y ago

My layman's interpretation is that she willingly defrauded investors but did in fact deliver test results to the patients, albeit at a lower quality level than you would expect in the industry. I think in the HBO documentary they say the unravelling started because of FDA complaints on the bloodwork being sub par. But I think you can't jail someone for 120 years because they did a shoddy product. Maybe the prosecutors simply went for the biggest bang for their buck?

thallium205 5y ago
Prosecution went for both, but the jury only agreed with the fraud.

kjaftaedi 5y ago

They had a fully functional lab though, it just wasn't using Theranos' devices. This is what they did to Wallgreens, they sold them on the idea that they would have theranos machines in-store, but instead what they did was do IV blood draws (calling it a comparison check) .. and then would just process the samples the same way as everyone else using standard equipment. People were getting good results because Theranos was using machines from Siemens in their hidden lab.

justinator 5y ago
I believe they also reverse engineered a lot of the third party machines, in an attempt to make them work the way they wanted to. That's... that's bad.
- keypusher 5y ago
  But not illegal, except under very specific circumstances.
- ghshephard 5y ago
  I think that's entirely fine - both for patients and investors (Siemens might be a bit Irate, but I don't know if I would put that in the "Bad" category). The issue would be if they informed their investors that tests were being done on Theranos technology, but were actually using siemens technology. With regards to the patients - all they should care about is accuracy of test results - whether Theranos was doing it with Theranos tech, Siemens Tech, Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient - they just want to get the highest quality information possible, regardless of the route taken.
  - jmcgough 5y ago
    > Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient Those machines weren't designed to work that way though, so the test results were wildly inaccurate when they did dilutions. And they fired people who wanted to delay rollout in order to ensure that they had consistently accurate results.

bellyfullofbac 5y ago

Iirc with Fyre Festival the dude got convicted of wire fraud for defrauding an investor, not for selling tickets to a sham festival. The joke was, screw the small people, that's fine, screw a rich investor, that's when you go to jail...

schoen 5y ago
"Everything is securities fraud" https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
mardifoufs 5y ago
It's more that wire fraud can cover pretty much anything, making it a lot easier for the feds to get a conviction. Plus, the charges weren't related to the festival or its investors; it was for a whole different scammy "venture." I'm not even sure they could be criminally charged for a sham festival since the festival did actually happen. I'd imagine that the whole thing turning out to be a complete wreck would probably be something that could be handled in a civil case.

berberous 5y ago

>> Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans. The above does not excuse fraud. Investors know their investments are risky, but that does not give you permission to deliberately lie or mislead, with an intent to deceive the potential investor. For example, if you tell investors that you anticipate getting $50M in new contracts over the next year, well, assuming you mean it in good faith, that's not fraud even if it doesn't pan out or was delusional to begin with. If you tell an investor you just signed a contract for $50M, in order to get them to invest, and that's a total lie, that's fraud. Whether or not the investor did appropriate due diligence to confirm that fact or not, it's still criminal.

deleted 5y ago
[deleted]
chihuahua 5y ago
In one sense you are correct, just because investors are knowingly making speculative investments, that doesn't make it OK to defraud them. On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. It would be unreasonable to expect patients requesting a blood test to be suspicious and question the results.
- hn_throwaway_99 5y ago
  > On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. If you've ever dealt with competent VCs, they are very skeptical, which is why they pretty much ignore your forward looking statements and just look at your current data. And the reason they do that is because forward looking statements can be all kinds of BS, but current data is just facts (unless you're lying about them, in which case it's fraud). Of course, they also want to know your vision and drive for the future, but they'll basically ignore statements like "We have 10 big deals I'm the pipeline" and just say "How many signed contracts do you have?"

GhostVII 5y ago

There was pretty strong evidence she defrauded investors, lots of hard evidence of her making claims that we now know aren't true. I haven't heard much strong evidence that she intentionally defrauded patients though. I think it is totally possible that she lied to investors about Theranos's capabilities (ex. How many tests they could run), while still thinking that the tests they were running were accurate.

dmix 5y ago

They farmed out the patient results to real machines pretending they were using Theranos. So they were technically real.

lbriner 5y ago
As other posters have commented, since they were claiming results from much smaller samples, these "good" machines weren't given the amount of blood required for reliable results so this is also fraudulent and much worse imho because the people operating these machines must have know they were artifically amplifying samples.

a-dub 5y ago

> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. my thoughts exactly. i'm woefully underread on the whole situation but something is weird and different about it. one thing that does jump to mind is that the investor list and board composition isn't what i'm used to seeing for stem ventures. i can imagine that perhaps they're less forgiving of failure and were operating with more blind trust in company leadership on stem/technology matters.

300bps 5y ago
To me it seems like a simple matter of don't mess with people that have money.
csours 5y ago
My impression is that the defense put the onus on the lab directors etc and that she didn't know what was going on. I don't buy that, but the jury is supposed to go on only evidence presented at the trial, so I guess the defense did a good job.
eternalban 5y ago
It’s the elephant in the room. Hardly ever remarked upon but a complete head scratcher. This company is fated to play a staring role in at least one conspiracy theory going forward.
- CRConrad 5y ago
  A useful reminder (in advance) that not all conspiracy theories are necessarily false.

jen20 5y ago

I've been reading Dorothy Atkins' live tweet coverage of the trial since day 1, and it gives a blow by blow account of it. It starts at [1], and runs all the way up until the verdict. Strongly recommended. [1]: https://twitter.com/doratki/status/1435590320897478657 https://twitter.com/doratki/status/1435590320897478657

unkulunkulu 5y ago
Great source! Thank you! For those stuck at the end of first day coverage the way I found is: type «from:doratki day 2» in search
- unkulunkulu 5y ago
  For day 2 in particular you want the sep 14 tweet, the nov one is day 2 of Holmes testimony

gjsman-1000 5y ago

Don’t forget she is still facing 3 counts that were declared mistrialed. She could get longer.

TheCondor 5y ago

Are Walgreen's customers given any sort of guarantee about the results? I mean, if you could find someone that experience material loss from it, or death, I think they'd have a very legitimate chance to sue. It's not clear to me what promises Walgreen's is actually making though.

InfiniteRand 5y ago
How does it work in a case where the customer's relationship is with a reseller, but the reseller was given false information from the test maker? Is only the test maker liable, or are both the reseller and test maker liable?

simplicio 5y ago

Just going by Carryous podcast, it seems like there was a lot more hard evidence (emails, transcripts, texts, etc) that she was knowingly lying to investors. On the other hand, I don't think there was any hard proof that she didnt know the results delivered by her labs (which were using third party machines, albeit ones being used improperly), were bunk.

chihuahua 5y ago
I feel like John Carreyrou deserves a medal for exposing the entire scam. First in WSJ articles and then in his book, which is a great read. It's incredible how much trouble this caused for him when Theranos tried to fight him. Who knows how long the scam would have continued without him, and how many more people would have gotten bogus test results. If Tiger Woods can get a presidential medal of freedom for playing golf, it seems like it's the least they could do for Carreyrou.
alanh 5y ago
I agree the proof for defrauding investors was less arguable. However there were still clear indications that she should have known the tests offered to patients were unreliable. For example, Schultz told her, before resigning, that it was not OK for Theranos to continue re-running their benchmark tests until they got a passing result (kind of like shaking the magic 8 ball until it, on the fourth shake, correctly answers the question “Is today Sunday?” — then selling it as an oracle). One employee flagged it for her attention that females were getting results that should only be possible if they had prostates — and she dismissed this as well! There was other evidence introduced during court that showed she knew the tests her company was doing for customers were not as accurate as she claimed, too. I would have loved to see her found guilty on these counts as a result, and I would also love to hear about the jurors' reasoning for not doing so.

rossdavidh 5y ago

They weren't really being charged with the stuff about patients, in part I think because the communication between Holmes and investors was direct, whereas Holmes was not personally communicating with the patients. Basically, the prosecutors went for the charges that were easier to prove. If Theranos still existed as a company, it would doubtless be getting buried under a blizzard of charges relating to how Theranos, the company, treated their patients. One of several reasons why Theranos the company no longer exists.

andrei_says_ 5y ago
What happened to the people working for Holmes/Theranos who were doing the legwork of systematically and knowingly defrauding patients?
- HWR_14 5y ago
  It's fairly easy to set up situations where the people doing the actual work are not knowingly defrauding anyone. The salespeople are told the machine is real, the delivery people never see inside the lab, the testers inside the lab are trained by the few people really in on it (I don't think they had the proper independent training) so they don't know how bad the tests are, and the scientists think everyone knows they're working on version 2.0 but they're told not to discuss readiness, leading the salespeople to get the wrong idea. Heck, most frauds don't want their people to know that it's a fraud - too many people raises secrecy and conscience issues.
  - andrei_says_ 5y ago
    In other words, Theranos was intentionally set up as a criminal organization?
alanh 5y ago
> [She wasn’t] really being charged with [wire fraud with regard to] patients Unless the word "really" is doing some heavy lifting here, this is incorrect. There were multiple counts directly and specifically related to defrauding patients. These counts came back not guilty, but they were, in fact, charged, and customers testified in court in support of these charges.

colechristensen 5y ago

Eh, what seems easiest to prove gets prosecuted. Like mob bosses getting convicted of tax evasion. The lies to patients and investors were quite well linked anyway, if you want to think about it like that.

mdoms 5y ago

My guess about the discrepancy is that the lies she told investors were more brazen and came directly from her own mouth. She told investors and journalists that Theranos was working on military contracts (no such contracts ever existed), and she straight up told investors that no third party testing was involved in Theranos test results (a lie). She directly ordered employees to omit positive test results from investors' blood tests because she didn't have confidence in the results. This is all documented and she has admitted to much of it. The lies told to patients and fraudulent test results could be (and were) denied by saying she wasn't aware of what was happening in the labs. It's not that investors are more important in the eyes of the law or that patients weren't lied to, it's about the quality of the evidence available. Her not guilty verdicts do not mean she's innocent, simply that there wasn't enough evidence available to convince a jury.

nradov 5y ago

Those patients might have standing to file a civil class action suit against Holmes. Not sure if she has enough assets left to make that worthwhile.

hellbannedguy 5y ago

jcranmer 5y ago

It's not particularly surprising, if you assume that the jury was essentially looking for a specific, traceable line between representations from Elizabeth Holmes herself (and nobody else) and the subsequent payment as a necessary element of fraud. (Whether or not the jury was doing so could be guessed from reading the jury instructions, which I haven't done). Being found guilty of defrauding investors in that light is easy because Holmes did specific acts, such as basically saying "we're endorsed by $BIG_PHARMA" knowing that they weren't, as part of her investor pitch--that's a pretty unambiguous traceable injury. But tracing anything she herself said to getting a random schmoe on the street to take a blood test... again, if you think fraud requires that specific act, it's not hard to see why someone would vote not guilty there. Of course, I would still have liked to see her proclaimed guilty on fraud for the test results. But as abhorrent as her actions may have been, they may not have necessarily climbed the bar into illegality.

michael1999 5y ago
This diffusion of responsibility in corporations drives me crazy. A CEO can create a crimogenic environment, and as long as there are enough layers of management or outsourcers, you can't pin the specific crime on anyone, and you can't jail a corporation.
gkoberger 5y ago
I agree with everything you said, but I think the person you're replying to is less upset at the prosecutors/jury, and more upset about the laws in the first place. They protect the rich and powerful, and don't worry about the average person getting hurt.
- saurik 5y ago
  I maybe agree that that's what that comment probably should have been focussed on, but they did explicitly cal out the "prosecutors" for having "fucked up" getting the conviction.
- piaste 5y ago
  In this case it seems to be a matter of distance, not power. Imagine that, rather than the CEO making shit up, the case was about a lowly lab technician who faked results out of laziness or recklessness. Even though his fraud ultimately impacted the patients, he would probably still get convicted for defrauding his boss or the company he directly worked for, not the patients he never met or knew.

harha 5y ago

Makes me wonder how much of the rapidly established covid testing infrastructure around the world delivers actual results. Fun fact: In some places like Singapore you don't even get the chance to test again to verify the result, you just serve your time in quarantine and then get back your "safe" status.

ghshephard 5y ago
Probably for the best back in populations of close to 0 community incidence, low acquired immunity, and prior to the vaccines being available. Better to have a few hundred (few thousand?) people incorrectly spend time in quarantine, than to have community spread results in people/businesses being locked down.
- harha 5y ago
  That's the state right now with almost all of the population vaccinated. I don't think it's for the best, it ignores any other medical conditions and offers no way to double check a result that could come from a dodgy test center.
  - ghshephard 5y ago
    I think once their is some population immunity, that you start to put more effort into confirming people really are infectious. It's partially why I don't think the CDC rules about not requiring a test after the fifth day really matters in most places in the United States - 20+% of people in the general population are already infected in places like New York. Wearing a mask for 5 days after quarantining for 5 days, while not ideal - ensures that our medical and logistic and other critical systems keep working for the next 3-4 weeks.
gbear605 5y ago
At least in the last few months, at-home tests have been available to replicate lab results, and they seem to be consistent.
amirkdv 5y ago

taf2 5y ago

Didn’t the FDA approve her tests… Yup - https://www.businessinsider.com/theranos-gets-fda-approval-2015-7?amp https://www.businessinsider.com/theranos-gets-fda-approval-2...

phonon 5y ago
That was just one test, for Herpes.
HWR_14 5y ago
They approved the Herpes test not all the other tests she was selling. And they approved it after they had been selling other tests for over a year.

TeeMassive 5y ago

Weren't they secretly testing blood samples with actual working machines?

HWR_14 5y ago
In some cases they were, in other cases they tried their machines. Even when they used the real machines, it's unclear if they had enough blood, skilled operators, time and maintenance to generate accurate results.
tcoff91 5y ago
They misused the real machines. I highly recommend reading or listening to Bad Blood. Excellent book, I could hardly put it down.

lr4444lr 5y ago

It upsets me, but I wouldn't say "blows my mind". Prosecutors need to focus their strike where the charges are the strongest against well armored defendants. The people who suffered health-wise will now be able to more easily win civil suits, which will help them more than adding jail time to her impending swntence.

hatware 5y ago

> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Maybe it's just me, but with all the anti-consumer practices going on, it doesn't surprise me in the least. Gotta protect those profits.

sundvor 5y ago

Well, they got Al Capone on tax evasion... In my own mind, the test result fraud is far worse ethically - however as long as she is locked up, it still works.

lbriner 5y ago
This wouldn't be satisfying. It is hard to accept that one person was responsible for all of the dishonesty. Even if you were "only" the CFO or COO, you must know what is happening in the company. What about all of the scientists who must have knowingly been reporting results that were not consistent with best (or legal) practice? There is obviously a culture issue with "white collar" crime and a large hole in most countries ability to correctly police what is and isn't acceptable. There are also questions around "business secrets" and how these were used to justify a lack of scrutiny or due-diligence.

jlduan 5y ago

> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Not excusing it. But maybe the jurors think the doctors and/or insurance companies ordered/interpreted these tests have some responsibilities too?

secondaryacct 5y ago

But then you must charge all the employees who did so, instead of her. Her crime is fraud because she told investor one thing and commanded employees another. But it's not the army, they could refuse, they all did the tests and gave the false results back to humans, which is unfathomable in healthcare. She s eventually responsible but her job was on investor relationship.

HWR_14 5y ago
> But it's not the army, they could refuse Officers are not only allowed to, but required to, refuse illegal orders in the Army. Enlisted troops are allowed the "just following orders" excuse, but not officers who should know better.
- dragonwriter 5y ago
  > Enlisted troops are allowed the "just following orders" excuse Within certain bounds; even enlisted can be convicted of crimes for following palpably unlawful orders.

abosley 5y ago

Go research wire fraud.

helsinkiandrew 5y ago

“Everything is securities fraud”. I can’t find details of the specific wire fraud charges that she was found guilty of, but it is far easier to find and prove technical breeches of law (documents showing X was claimed to investors to obtain money when other documents show it wasn’t true) than proving intent or knowledge by the accused beforehand.

alanh 5y ago
Money Stuff reader detected (Me too)

nopenopenopeno 5y ago

Juries are not the brightest bunch. Anyone with even the most fleeting ability for critical thought can avoid jury duty. This is by design, of course.

nroach 5y ago
Some people choose to serve on juries out of a sense of civic responsibility and don’t seek exclusion.
- nopenopenopeno 5y ago
  Why would I believe that happens to any measurable extent? I mean, sounds nice but it also sounds like a fairy tale.
  - avgcorrection 5y ago
    That oneself and one’s peers are smart and most everyone else is an idiot is an even more enticing fairy tale.
    - nopenopenopeno 5y ago
      That’s not even close to my point.
  - bigbillheck 5y ago
    A couple years ago the only reason I wasn't on a jury was because I wasn't one of the people whose name was randomly drawn, after they'd filtered out everybody who was unable to serve or had other conflicts that would make them unfit (such as 'visceral opinions about the nature of the charges'). Could I have gotten out of it? Sure. Could I have gotten out of it without lying under oath? I don't see how.
    - nopenopenopeno 5y ago
      “without lying under oath”

jjav 5y ago

> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Exactly. This is the exact opposite of the justice I'd expect. Invest money? Expect to lose it most of the time, that's the game. Pay for a service? There should be an expectation of honest delivery of said service.

hef19898 5y ago

Didn't they use real lab equipment to conduct real tests? In which case the results would be ok, it just wasn't the tech she promised. Quite a while I read something about the details, so.

thallium205 5y ago
They didn't run a traditional test all the time.

gigatexal 5y ago

I get that investors should know any investment can go to 0. But she was defrauding them by outright lying about how well the tech worked and what it could do. This verdict I think restores that contract between entrepreneurs and investors by saying if both invest in good faith then the whole thing works out. Otherwise we allow grifters like her and her business partner to suck good money out of the system. Now future folks who would try to do the same have this verdict to look at. Patients who were wronged by the company did get screwed though. Such is the nature of trials by jury sometimes the jury doesn’t come through.

shultays 5y ago

> Investors know that every dollar they put into a company could disappear Is not it kinda different if you are being lied though? If Holmes were faking her accomplishments and you investments were depending on those then I don't see why this wouldn't be fraud If the patients were still getting correct results (I assume they were still being tested, but in traditional ways) then it makes sense that they were not being scammed

1vuio0pswjnm7 5y ago

"But a patient does not expect for their blood test results to be completely wrong." The patient's state of mind, e.g., their expectations, is not an element of wire fraud. Only Holmes' state of mind is relevant; specifically, her intent.

1vuio0pswjnm7 5y ago
"As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success.34 It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendants communications were reasonably calculated to deceive persons of ordinary prudence and comprehension.35 Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a nave victim.36 Nevertheless, the courts have long acknowledged the possibility of a puffing defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent.37 In any event, the question may be more clearly presented in the context of the defendants intent and the materiality of the deception.38" https://sgp.fas.org/crs/misc/R41930.pdf https://sgp.fas.org/crs/misc/R41930.pdf "In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception." Whether a patient expected that results might be inaccurate, or even whether a "reasonably prudent" person would have expected results might be inaccurate, is not necessarily a defence to wire fraud. Even if such a defence were asserted, the focus would still be on Holmes, her conduct and her intent, not the patient.

deleted 5y ago

[deleted]

Someone 5y ago

FTA: “This case was specifically about what Holmes told Theranos investors, although her lies also impacted partners and patients.“ If that’s true, it isn’t surprising she wasn’t found guilty for defrauding patients, and more cases (¿maybe one focusing on partners and one focusing on patients?) could follow. I don’t know whether something like that is in the pipeline. Edit: reading https://en.wikipedia.org/wiki/Elizabeth_Holmes#Criminal_charges https://en.wikipedia.org/wiki/Elizabeth_Holmes#Criminal_char..., that’s unlikely to happen: “In February 2020, Holmes's defense requested a federal court to drop all charges against her and her co-defendant Balwani. A federal judge examined the charges and ruled that some charges should be dropped: since the Theranos blood tests were paid for by medical insurance companies, the patients were not deprived of any money or property. Prosecutors would hence not be allowed to argue that doctors and patients were fraud victims. However, the judge kept the 11 charges of wire fraud” I think that leaves open prosecuting for something else than fraud for knowingly delivering unreliable test results, but wouldn’t know what that “something else” would be.

starfallg 5y ago
Yes, negligence would be that something else. Theranos had a duty of care to the patients and they very blatantly breached that duty. Fraud deals with purely financial loss, while negligence deals with harm which is much wider in scope.
- necovek 5y ago
  I am neither American nor a native English speaker, but I always thought fraud was mostly a deliberate action, and negligence was mostly resulting out of either lack of action or accidental consequences of an action. So if a company deliberately and knowingly markets a "sepsis-test" that puts out completely random results and leads to people getting their limbs amputated (bear with me, I know the example is terrible), they can only be held responsible for "negligence" by those patients? Or would patients only be able to claim financial loss due to fraudulent loss of work ability and such? There was similar reporting of those prenatal genetic tests a few days ago (they have led to unnecessary pregnancy abortions due to incorrect results), and I wonder what corrective action we can do to ensure these things don't happen?

spoonjim 5y ago

Cf. Sacklers.

isolli 5y ago

Could it be related to the "Everything is securities fraud" [0] theory? If it's easier to prove that someone defrauded investors, then this is what prosecutors will go for. Side note: I highly recommend subscribing to Matt Levine's newsletter. [0] https://www.bloomberg.com/opinion/articles/2021-02-03/goldman-sachs-goes-to-supreme-court-hedge-funds-won-on-gamestop-kkpoe6ws https://www.bloomberg.com/opinion/articles/2021-02-03/goldma... > As I often write, this theory can turn anything bad that a public company does into securities fraud [...] The stock will drop (because the bad things are bad for the company); the shareholders will sue, saying “you said you were good, we believed you, we bought the stock, but you were bad and we lost money.” And so climate change and sexual harassment and lax customer data protections and mistreatment of orcas can all be transmuted into securities fraud.

pdpi 5y ago

This is a criminal case, which follows stricter rules than civil action. The relationship between Holmes personally and the investors is clear enough, but I can see how any claim of her committing fraud against the patients is much subtler and much likelier to fail.

kingkawn 5y ago

If protection of patient health was a critical component of the US healthcare system we would have a public option. We don't, so we don't. The only thing that is protected in the US is money.