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November 13, 2022

Sentencing memos paint very different pictures of Elizabeth Holmes

Two Reuters articles and ledes highlight the very different portraites of Elizabeth Holmes drawn in recent sentencing filings:

"Elizabeth Holmes seeks to avoid prison for Theranos fraud":

Elizabeth Holmes urged a U.S. judge not to send her to prison, as the founder of Theranos Inc prepares to be sentenced next week for defrauding investors in the blood testing startup. In a Thursday night court filing, lawyers for Holmes asked that she receive 18 months of home confinement, followed by community service, at her Nov. 18 sentencing before U.S. District Judge Edward Davila in San Jose, California.

The lawyers said prison time was unnecessary to deter future wrongdoing, calling Holmes, 38, a "singular human with much to give" and not the robotic, emotionless "caricature" seen by the public and media. "No defendant should be made a martyr to public passion," the lawyers wrote. "We ask that the court consider, as it must, the real person, the real company and the complex circumstances surrounding the offense."

"U.S. seeks 15 years for Elizabeth Holmes over Theranos fraud":

Theranos founder Elizabeth Holmes should spend 15 years in prison and pay $800 million in restitution to investors defrauded in the blood testing start-up, U.S. prosecutors recommended late on Friday.  The Department of Justice recommendation, made in a court filing, came as Holmes prepares to be sentenced next week.

"Considering the extensiveness of Holmes' fraud... the sentencing of 180 months' imprisonment would reflect the seriousness of the offenses, provide for just punishment for the offenses, and deter Holmes and others," the prosecutors said.

The sentencing filings in this high-profile case are, unsurprisingly, quite entextensive ensice.  Holmes sentencing memorandum runs 82 pages, is available at this link, and here is part of its "preminary statement":

Section 3553(a) requires the Court to fashion a sentence “sufficient, but not greater than necessary,” to serve the purposes of sentencing.  If a period of confinement is necessary, the defense suggests that a term of eighteen months or less, with a subsequent supervised release period that requires community service, will amply meet that charge. But the defense believes that home confinement with a requirement that Ms. Holmes continue her current service work is sufficient.  We acknowledge that this may seem a tall order given the public perception of this case — especially when Ms. Holmes is viewed as the caricature, not the person; when the company is viewed as a house of cards, not as the ambitious, inventive, and indisputably valuable enterprise it was; and when the media vitriol for Ms. Holmes is taken into account.  But the Court’s difficult task is to look beyond those surface-level views when it fashions its sentence.  In doing so, we ask that the Court consider, as it must, the real person, the real company and the complex circumstances surrounding the offense conduct, and the important principle that “no defendant should be made a martyr to public passion.” United States v. Gupta, 904 F. Supp. 2d 349, 355 (S.D.N.Y. 2012) (Rakoff, J.).  As discussed in more detail in the pages that follow, this is a unique case and this defendant is a singular human with much to give.

The Government's sentencing memorandum runs 46 pages, is available at this link, and here is part of its "introduction":

The Sentencing Guidelines appropriately recognize that Holmes’ crimes were extraordinarily serious, among the most substantial white collar offenses Silicon Valley or any other District has seen.  According to the Presentence Investigation Report (“PSR”), they yield a recommended custodial sentence beyond the statutory maximum.  The factors set forth in 18 U.S.C. § 3553 — notably the nature and circumstances of the offense, the need for the sentence to reflect the seriousness of the offense and promote respect for the law, and the need for both specific deterrence and general deterrence — demand a significant custodial sentence.  With these factors in mind, the government respectfully recommends a sentence of 180 months in custody.  The Court should also order Holmes to serve a three-year term of supervised release, pay full restitution to her investors (including Walgreens and Safeway), and pay the required special assessment for each count.

I think I'd put the over/under for this sentencing at around 10 years of imprisonment, but I could readily imagine a judge going much higher or much lower.

Prior related posts:

November 13, 2022 at 03:56 PM | Permalink


Reading the fantasyland bilge in Ms. Holmes' sentencing memo makes me grateful, once again, that I never became a defense lawyer. I mean, I'm sure the money is plentiful for a defendant like this but...................good grief.

Posted by: Bill Otis | Nov 14, 2022 10:51:16 AM

Bill - What you may regard as "fantasyland bilge" and excuses others may regard as the impact of deep-rooted traumas early in life (the trauma is not applicable to this particular defendant, but is applicable to many others). We must always remember that some people who are criminals become criminals due to forces not entirely of their own making and our sentencing policies should always allow for people to learn from their mistakes and become better individuals, not hardened from years in prisons under "tough on crime" sentencing policies. Prison must always be a last resort.
Brett Miler

Posted by: Brett Miler | Nov 14, 2022 12:41:29 PM

Given that the product was a fraud from start to finish I have a very difficult time crediting anything that calls Fairness a "real company".

Posted by: Soronel Haetir | Nov 14, 2022 1:10:16 PM

Brett Miller --

"What you may regard as "fantasyland bilge" and excuses others may regard as the impact of deep-rooted traumas early in life (the trauma is not applicable to this particular defendant, but is applicable to many others)."

But I'm talking about this defendant. And could you define "many"? What I found to be characteristic of virtually all defendants was a breathtaking penchant for self-justification.

"Prison must always be a last resort."

For by far the most part, it already IS the last resort. https://ringsideatthereckoning.substack.com/p/where-republicans-got-it-wrong-on

Posted by: Bill Otis | Nov 14, 2022 6:52:26 PM

I take the over based on impact on patients.

Posted by: Lawdevil | Nov 15, 2022 8:22:33 AM

I take it that everyone knows from where Bill Otis speaks: He is a vindicative, sadistic, old-school asshole extremist. He has been bitter his whole life about something. Just a real a dick.

Posted by: Mike | Nov 15, 2022 3:38:15 PM

In my experience, it is often the white collar criminal defendant who has the hardest time coming to terms with what they did. There are a myriad of excuses, but when they do take responsibility for their actions or accept that they made decisions that were criminal, I find the courts are less apt to throw the book at them. Do they still go to prison, yes, and certainly, Ms. Holmes will likely be there soon.

Posted by: atomicfrog | Nov 15, 2022 5:56:00 PM

Mike --

I just want the board to know that I did NOT pay you for your endorsement.

Posted by: Bill Otis | Nov 17, 2022 10:49:51 AM

The part about Holmes that really gets to me is the patients. They were not getting the blood results they thought they were getting, and Holmes knew it. For that reason, I think 15 years is too lenient.

If it were "only" the financial loss, I could live with 15 years.

Posted by: William C Jockusch | Nov 17, 2022 6:18:20 PM

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