I knows Theranos was headquartered in Palo Alto for part of its life, but is it really a SV company? Looking at their board I see mostly old-school business people from a construction company, Wells Fargo, and James Mattis and a former head of CDC. Only real tech person seems to be someone from NetApp. On the investor side, I don't see any of the big SV names either. Initial funding came from Rupert Murdoch.
Theranos was located in SV and Holmes referred to it as a SV style company, you might argue this is enough to make something a "Silicon Valley Company". I think OP would view such a company as one both in SV and embraced by the local ecosystem of developers and investors. I think SV "learning a lesson" from the downfall of a company only makes sense for the latter definition, and I don't think Theranos fits it.
In reading Bad Blood it becomes apparent that, Tim Draper aside, the SV investor community realized much earlier than anyone else that Theranos was shady and either pulled their money or stopped investing. As someone living here in the area at the time I felt it was common knowledge in dev circles that Theranos was shady and lying about their capabilities (though not to the level that was revealed). Certainly it did not seem to be a prestigious place to have on your resume.
Given that the SV ecosystem seemed to largely sniff out Theranos before the rest of the world it seems weird to expect them to learn a lesson from its downfall.
The answer to this depends a lot on whether you consider e.g. Arrillaga-Andreessen "SV" or not. Holmes certainly wanted Theranos, and herself, to be viewed and valuated as such.
I don't follow startups that closely. The only example I can think of is Elon Musk's "full self driving" promises, but the gap between promise and reality is a lot smaller in that case. Even then, the claims are still mostly future timelines, not "it works now, no I can't show you, trust me!!"
I'm no fan of Holmes, but what good does it serve to lock up non violent criminals for decades?
“non-violent” criminals can do much more widespread damage individually than violent criminals are likely to, but are also more likely to be rationally deterrable with a sufficient consequences (which anything you'd willing gamble against the potential upside of the massive crime is not.)
For many (though certainly not all) of the investors victimized by Holmes, I'm not terribly sympathetic. As implied by "qualified investor", if you write such a big check, it's sort of up to you to do the homework.
I do have some sympathy for people who got Theranos tests and were mislead about their efficacy, but on the charges of defrauding patients Holmes was found not guilty! (Similarly, I have some sympathy for employees who went to work at Theranos and ended up bullied and threatened by the company, as with Tyler Schultz, but they aren't represented by any of the criminal charges!)
The only thing that has a small deterrent effect is how likely a potential offender think they are of getting caught.
My understanding is that even in cases where deterrents are known to work poorly, there's still some effect. For example, with drug addicts, there are diminishing returns in as little as a couple days, but I think there was still SOME effect.
It just winds up being mostly pointless, because a weekend sentence works pretty much the same as eg. months to years or more. You should be careful about extrapolating from behavioral studies, and other crimes.
It's not just about deterrent IMO. I also care about justice, fairness, and making it not worth it to commit white collar crimes. If the sentence is not substantial, you've basically gotten away with it to me.
It's worth 1-5 years in prison to spend 5-10 years in luxury, being told how amazing you are. Maybe not for me, but it certainly is for a lot of people. A ton of white collar criminals end up better off for their crimes, if you're not harsh enough.
Maybe the takeaway is that criminals (and humans) aren't entirely rational, and 65 years is just a great "headline" for deterrence. But framing this as about deterring rational criminals strikes me as then putting a high burden of proof on the argument for 65 vs 10.
How did you come to that conclusion? It seems like a difficult argument to support.
In terms of human life, probably not, right? I mean hypothetically the investors could have gone on to spend their money on lifesaving ventures and charities but that seems like a roll of the dice.
They may not not technically be criminals because the government and judicial system protect this class of people, so in the interest of liability let's not allege they committed any crimes, but in the context of the the question yes white-collar or non-violent "whoopsie daisies" can do much more widespread damage.
In the context of the broader discussion here, though I find it unsatisfying -- Holmes was specifically found guilty of defrauding the investors, and (as far as I've seen) acquitted of defrauding the patients. I don't think the main punishment for tobacco, etc company execs should be based around, hypothetically, ripping off investors (actually I guess their investors don't feel ripped off in many cases).
The main victims, in the case of tobacco and asbestos, seem to be people who've essentially been poisoned. This ought to be considered a violent act in my opinion. Unfortunately the legal system seems to see it differently, so again you are correct, but again I'm left a bit unsatisfied...
Our system is ludicrous, but within its current bounds, over 10 years would be just.
If you're stealing hundreds of millions of dollars, is anything less than a decade really a deterrent? Especially since sophisticated actors are the most likely to be deterred by long prison sentences.
Heck, does it really do any good to lock up someone who comes home to find his wife cheating and kills her and her lover for 20-plus years? I would contend that locking up the white-collar criminal does more good.
But I'll take on your specific example. Any crazy rich people out there, I will serve 5 years in a minimum security Western European prison for 143MM USD safely accruing interest in accounts for when I get out.
Because people are bad at estimating low probability and high outcome expected values. If you are old you might even not deterred at all by a very long sentence if there is only a small chance that you actually both get caught and have to serve the time.
We should destroy her life for cavalierly playing around with other people's lives in that manner. Theranos intentionally destroyed the database of test results, but their clear goal was to yolo out medical tests.
See eg [1] or [2]
[1] https://mondaynote.com/theranos-trouble-a-first-person-accou...
[2] https://www.theverge.com/2021/9/21/22687026/theranos-patient...
Hopefully screwing around with medical tests will have much more serious consequences than stealing money. Hopefully this was just the first step, and having her in jail will prevent her from tampering with the evidence for the more serious crimes. Hopefully we live in a society that values lives more than money...
She was, but she was acquitted on those charges.
Like if you order some bullets from a gun shop, and the guy delivers them by doing a drive-by on your house, surely the only legal problem for the deliveryman can't be "these bullets were a ripoff, the gunpowder is already expended!"
The bad diagnostic test in exchange for money is the essence of the fraud she was acquitted of, not some separate harm.
I mean, it's not impossible she could face state law claims about it separate from the federal ones, but any federal criminal claims from the same set of actions would be foreclosed now by double jeopardy (besides retrial on the charges that the jury hung on.)
We absolutely love throwing people in prison for ridiculous lengths of time, because we are, for the most part, violent busybodies.
Perhaps the judge can factor that kind of thing into the sentencing; I'm not sure.
In an ideal world (not that we live in anything resembling a perfect world) it seems to me that the harm you're talking about would be remedied in separate criminal and/or civil trials. Certainly, unless I'm mistaken, the victims of the fraudulent tests could still file civil suits.
I'm not a lawyer, in case it wasn't blindingly clear.
Because words have meaning and fraud is non-violent no matter how much you stretch it
If you have a problem with US sentencing culture, as a moral and a political issue you should probably not start with rich well-connected scammers.
With all the charges grouped, including the conspiracy charge, we'd be looking at an offense level around 35 --- 168 to 210 months.
I'm not saying I agree there should be a downward departure (imo, her pregnancy came across as a "Pregnancy Of Convenience"), just that there could be.
Never having a baby seems better than having a baby you won't be able to be a mother to for 10-20 years. It's not unlikely the kid would hate you when you get out of prison.
I would also expect leniency if you got the child after you were charged, even though that implies people could just get kids to look for leniency, there is the idea that once someone gets a child they calm down and become more cautious. Maybe not so important in cases of non-violent, monetary crime.
However as it is commonly thought in society, and backed up by science ( https://www.psychologicalscience.org/publications/observer/o... ), that women take on a more nurturing role for the children and the absence of a mother would be more traumatizing (statistically, in the case of my son he freaks out if I leave but doesn't care much about the mother), the father can expect less leniency than a woman.
If we really think of it, shouldn't single person get leniency because him being in jail doesn't hurt others. So that can be considered in thinking about planning of crime. As others clearly aimed to hurt their families and friends by getting in jail in first place.
All that said, I would hope for at least 8-12 years, possibly more. I don't take that sentence lightly and consider it very harsh (I can't stand people from the USA that consider less than 5 years and "easy sentence"). 3 years is a serious sentence, and 8-12 is extremely harsh, for good reason. It's very important to me to call this like it is. There should be heavy handed punishment, because this is among our most serious crimes.
She blatantly lied multiple times about a medical product. She had a team of enforcers harass people who tried to talk. Across the board, it was a very extreme case. More importantly, with so much at stake, these type of white collar crimes are quite frankly worth committing if the sentence is less than 5 years (I'm not sure the exact number, but it's at least 5).
For a substantial portion of the population, having that kind of wealth and influence for a short time is worth it; in some cases, even if you die. So it might not deter everyone, but I do think the possibility of spending lots of time locked up, will stop a lot of gray area people.
I also think it is necessary for fairness. I care about making these crimes "not worth it". At a certain point, you're basically letting people keep their ill gotten gains. Getting to be king for a decade, then go away for a year or two is no punishment at all.
I don't think 10-20 years is necessarily inappropriate.
65 years in prison would be a fair sentence for her. Homeless people in America have been sentenced to over 15 years in prison for stealing $100. Holmes stole an order of magnitude more than that. The US justice system needs to send a clear message to the would-be fraudsters that there are indeed some very serious penalties for being a criminal in this society.
Using an existing injustice in the US to defend another does not make it right.
I am no fan of Holmes or what she did, but locking away people for life is clearly not a winning strategy.
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> Using an existing injustice in the US to defend another does not make it right.
While that is true, it is also true that the law must be fairly enforced on everyone. Having some people receive lighter sentences for similar-in-intent but larger-in-scale crimes is not fair enforcement.
Though, it was my intent to communicate on the interwebs with a writing concept often referred to in some circles as 'a figure of speech'...
No. SIX OR SEVEN orders of magnitude.
Do you have a link for that? I can't tell if this is hyperbole or not.
In general we prosecute violet offenses (including the threat of violence, even if the gun wasn't real) more seriously than nonviolent offenses. While 15 years seems excessive (as do most prison sentences in the US, IMO), there's a lot of important context missing in your statement. Hyperbole might not be the right word, but I'd call it "substantially misleading".
I get the vibe you are a white-collar criminal apologist, I could be wrong, but am I?
Absurd statement. Of course it does, if the punishment is harsh enough.
Besides, she can likely get probation with good behavior after a decade or two of time served.
Meanwhile the only real sticking crimes are the one she commit against Betsy Davos (dirty corrupted rabbit hole warning if you Google her name). Obviously Bets placed few phonecalls. It it wasn't some VIP, she would get away with that too because all investments comes with risk.
Not fair to frame her sentence as Betsy pulling strings, even when I’m no fan of that woman for obvious reasons.
In fairness, Betsy was 16th in line for for the US Presidency when Holmes was being charged and everything set up. And were it not for COVID-19 she would have been in that position for the entire trial. I'm sure with that kind of political power she was pulling some strings for vengeance.
I couldn’t care less or sympathize with billionaires who have already made back magnitudes of the money they lost on Theranos with other investments.
For example, Larry is up $14 billion(!) on a $1 billion investment in Tesla in 2018.
https://markets.businessinsider.com/news/stocks/larry-elliso...
If Holmes had decided to reinvent herself as a Robin Hood figure, she might be feted in Jacobin by now.
The prosecutors are not stupid. They have to come up with charges that actually stick, otherwise they risk losing this case in a spectacular fashion. If they went with an angle "X is morally bankrupt and her actions caused some deaths", it would make so much harder to prove and get the jury to agree to it.
Otherwise it signals that wantrepeneurs can keep doing it with minimal repercussions.