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January 3, 2022

Elizabeth Holmes convicted on 4 of 11 fraud charges ... but now can be sentenced on all and more

The high-profile fraud trial of Theranos founder Elizabeth Holmes resulting in a mixed verdict, but her conviction on four counts each with 20-year maximums means that she now faces up to eight decades in federal prison. And, as regular readers know, her acquittal/non-conviction on various charges do not preclude the federal judge at sentencing from considering evidence associated with those charges.  This short New York Times piece, headlined "What happens next to Elizabeth Holmes," provides some details about what may lie ahead:

Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, now awaits sentencing after being found guilty of four of 11 charges of fraud on Monday.

Ms. Holmes, 37, left the San Jose, Calif., courtroom through a side door after the verdict was read in the case, which was closely scrutinized as a commentary on Silicon Valley. She was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty on four other counts. The jury was unable to reach a verdict on three counts, which were set aside for later.

After the verdict was read, defense and prosecution lawyers discussed plans for Ms. Holmes’s sentencing, the status of her probation and the fate of the three hung charges. Judge Edward J. Davila of the Northern District of California, who oversaw the case, said he planned to declare a mistrial on those charges, which the government could choose to retry. The parties agreed that Ms. Holmes would not be taken into custody on Monday.

A sentencing date is expected to be set at a hearing on the three hung charges next week. Ms. Holmes can appeal the conviction, her sentence or both. She will also be interviewed by the U.S. Probation Office as it prepares a pre-sentence report....

Each count of wire fraud carries up to 20 years in prison, though Ms. Holmes is unlikely to receive the maximum sentence because she has no prior convictions, said Neama Rahmani, the president of the West Coast Trial Lawyers and a former federal prosecutor.

But he said her sentence was likely to be on the higher end because of the amount of the money involved. Ms. Holmes raised $945 million for Theranos during the start-up’s lifetime and those investments were ultimately wiped out.

Given the amount of loss and other factors likely to lead to upward guideline adjustment, Holmes is sure to face a very high guideline sentencing range (perhaps a range as high as life imprisonment). But her lack of criminal history and other potential mitigating personal factors leads me to expect her to receive a below-guideline sentence. But exactly what that sentence might be (and what the parties will argue for) will be interesting to following in the months ahead.

January 3, 2022 at 09:23 PM | Permalink


I pity this bright, well-educated young woman. Her life will be forever changed and even following her release from prison (20 years from now), she will never again regain what she had and who she was. It is hard to imagine her receiving a sentence of less than 20 years, given the amounts of money lost by investors, almost $1 billion. My friend Sholam Weiss, whose sentence was commuted by President Trump, received a sentence of 845 years in a case where the losses were only about $60 million.

Posted by: Jim Gormley | Jan 4, 2022 8:04:04 AM

I am not sure that pity is the word to express what I feel. Part of me sees her as a Robin Hood like figure as anyone who soaks the rich is ok with me. However her disregard for patients lives and her deliberately sexist defense erases any good feels I might have. So I don't pity her any more than I'd pity anyone stuck in a cage.

Posted by: Daniel | Jan 4, 2022 11:54:12 AM

I was not to pleased to see that a whistleblower had 400k in legal expenses fighting off Theranos counsel. Someone in the audience needed regular blood tests and said the whistleblower might have saved her life. This is serious.

I'd want to see 25 years here.

Posted by: William C Jockusch | Jan 5, 2022 8:26:41 AM

Jim Gormley--

A question and a proposition.

Do you think the defendant's greed and rampant dishonesty have anything to do with her present difficulties?

My proposition is this: I'll bet you $100 that her prison sentence is less than 20 years.

Posted by: Bill Otis | Jan 5, 2022 2:51:45 PM

Her lawyers need the latest edition of "171 Easy Mitigating Factors." She qualified for at least 22 of them of the top!!

Posted by: Michael Levine | Jan 5, 2022 6:19:12 PM

She will get the beautiful woman with big blue eyes downard variance to no more than five years.

Posted by: anon12 | Jan 5, 2022 6:20:56 PM

Bill, Happy New year to you and yours. Good to see you back on this blog. I agree with you, but go further: she will get no more than 8.

Posted by: Michael R. Levine | Jan 5, 2022 6:24:27 PM


Any defense counsel who doesn't yet have his 171 Factors needs to get it pronto.

Posted by: Bill Otis | Jan 5, 2022 8:04:49 PM

The guidelines are over-weighted towards "countable" things, like the amount of money lost, so I expect her guideline will be off the charts. Most of the legal talking heads think she will get less than 20, which is also what Bill Otis (above) thinks, and I agree.

I do not pity her, but I think 25 years is excessive. Personally, I think 5 years is the sweet spot, though I expect her to get more than that. Five years is a lot; I suspect most people reading this have never even spent 5 nights in prison, much less years. When did it happen that sentences of multiple years became thought of as lenient?

Posted by: Marc Shepherd | Jan 6, 2022 10:13:20 AM

My 25-year-suggestion is based on four things:

1) Her attorneys went after whistleblowers. That's disgusting.
2) The utter disregard of the safety of people who were having their blood tested.
3) The funds she fleeced from investors were utterly wasted at best. That's several lifetimes of wasted effort.
4) She led the scheme, essentially from start to finish.

I still think it's about right. I don't think it will actually happen.

Posted by: William C Jockusch | Jan 6, 2022 3:49:02 PM

William Jockusch, to pragphrase the immortal words of Humprey Bogart in the Maltese Falcon, "If they give you life, and if your a good girl, you'll be out in 20, and I'll be waitiing for you. If they hang you, I'll always remember you."

Posted by: anon12 | Jan 6, 2022 10:12:46 PM

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