A Federal judge sentenced Theranos, Inc. founder Elizabeth Holmes to eleven years and three months in prison last week. Essentially the judge had limitless options, with only execution being off the table. Based on the maximum sentences for each the four crimes she was convicted of, she theoretically could have been given the equivalent of life in prison. Prosecutors asked for a 15-year sentence, three years of supervised release, and more than $800 million damages. The layers for Holmes, now 38, had asked for home detainment, community service, and no more than 18 months in prison. (My son spent half that in jail for a reckless driving offense when he was 18. Just for perspective….)
What did Holmes do? Wikipedia has an excellent one-stop summary: the short version is that she invented a purported blood testing system that didn’t work, faked data, sucked in investors, doctors and patients, made billions, and engaged in all manner of lies, threats, manipulations and schemes to avoid the consequences of her actions. The government argued that Holmes deserved a severe punishment because “dozens of investors lost $700 million and numerous patients received unreliable or wholly inaccurate medical information from Theranos’ flawed tests, placing those patients’ health at serious risk.” This is undoubtedly true. Her defenders counter than “she didn’t kill anybody,” she is a first time offender, and her crime was one of non-violence. This is also true.
Your Ethics Alarms Ethics Quiz of the Day is….
Is Holmes’ 11 years+ sentence for her massive, 15-year fraud fair, just, proportionate and in the best interests of society—in short, ethical?
Is it too lenient, or too severe? I know what I think, but here are some random points to consider…
- There is no agreed-upon standard for sentencing. The Federal Sentencing Guidelines were presented as if they were arrived at scientifically, but that’s an illusion: they are entirely subjective and arbitrary. Judges are told that they must impose a “sentence sufficient, but not greater than necessary” to achieve the ethical goals of sentencing. These flow from the answers to several questions; How bad was the crime? How bad is the defendant? How much does the defendant need to be punished to make sure she doesn’t do this again? How do we send a message to other would-be wrongdoers? What have other defendants received for similar crimes?
What is “necessary”? How does one judge “bad”? There are just two ways to make certain that a criminal doesn’t “do it again”: lock him or her away for good, or kill them.
- That list of reasons why Holmes’ should receive leniency is full of ethics traps. First time offender? That means this is the first time she was caught. Holmes is brilliant, and shows all the signs of being a sociopath. Many (like me) suspect that she got herself pregnant with her second child to coincide with her trial and sentencing. No, her crimes didn’t involve violence; neither did Bernie Madoff’s. The violence distinction, in my view, has become cant because the Left finds it a facile way to excuse drug crimes. Why is an armed robbery that takes $100,000 and involves bashing a security gurad over the head considered a more serious crime than a Theranos-style mass robbery that uses lies and schemes instead of weapons? Brilliant but ruthless people don’t need guns; their brains are dangerous enough. Holmes didn’t kill anybody? Pure moral luck. Her fraud easily could have, and she didn’t care.
- On his blog Simple Justice, thoughtful defense lawyer Scott Greenfield argues that Holmes’ sentence is far too severe. His reasoning comes down to, in the end, to “it’s not the worst thing”:
While both terrorism and financial fraud are crimes, are they comparable? Does the same quality of culpability apply to someone who defrauds sophisticated investors by promising a technology that doesn’t exist as pulling the trigger and murdering school children?…[W]hite collar offenses aren’t the same as looking into the eyes of a second-grader and deciding to pull the trigger and end her life. [W]e’ve ratcheted up sentences from a decade in prison, an astoundingly long time reserved for only the worst criminals, to life plus cancer for any crime that outrages people… [W]e have mass incarceration because too many insipid people have come to believe that outrageously long sentences are needed for anyone, no less someone like Holmes. There was nothing lenient about this sentence. There are far too many sentences for other crimes that go far beyond “the ‘sufficient but not greater than necessary’ standard found in 18 U.S.C. § 3553(a),” and arguing that yet another defendant should die in prison is exactly the destructive mindset that should rejected.
Remember that Scott is a criminal defense attorney, so his bias is hardly surprising. The reference to “over-incarceration” also reveals of his ideological orientation. In contrast, I don’t believe that there is over-incarceration in the United States at all. Greenfield’s logic flows from the error of opposing capital punishment: if the toughest punishment we have for child-killers like Parkland school shooter Nikolas Cruz is only life without parole, then sure, the same or similar sentence for someone like Holmes (of Madoff, who got that sentence) makes no sense. This is exactly why a death penalty is so crucial: it sets an ultimate limit, allowing lesser but still terrible crimes to still receive appropriate punishment.
- Holmes also represents the difficult problem of how the system adjusts for hard-wired human bias. Beautiful women, especially beautiful white women skilled in manipulating people, have all manner of cognitive dissonance advantages with juries, judges and the public. I don’t know this can be taken out of the equation, but it is definitely a factor that she benefits from, and should not.
Finally, history and experience teach that people like Holmes are predators, and will always be a danger to society regardless of how many times they may fail, lose, or suffer. Next time, she may get away with her schemes. The safest thing for society is to stop Holmes from having another chance to harm people for as long as possible.
20 thoughts on “Ethics Quiz: The Elizabeth Holmes Sentence”
Any sentence should include a ban from the industry she worked in and used the tricks and traps of to create this massive fraud. Massive fraud like this does more damage to society in some ways than mass murder, only indirectly instead of directly. Maybe you don’t kill anyone directly by doing something like this, but if you cause a financial collapse, who knows how many lives you could destroy if not snuff out directly?
Then there’s the question of this being something that created a faulty methodology of medical testing. This is worse than computer hacking, which I think is pretty bad, because this society depends so much on the smooth flow of digital information. Doctors and patients rely on medical testing to determine what treatment to recommend or discontinue. If they have bad information, you could be looking at over prescription, under prescription, or the prescription of harmful medications or procedures. People die and doctors’ careers get destroyed by those things. As much as society is damaged by someone causing the deliberate death of members, it is damaged more when it can’t trust its medical community. That’s how openings are created for quackery and woo-woo that help no one and cause harm by keeping people away from real treatment until it’s too late.
11 years is not nothing, but I would not have batted an eye if the judge said life, which in the federal system actually means life, there is no parole.
Her sentence may be 11 years but the question for me is – will she actually serve any prison time? She doesn’t have to report for prison until April 27, 2023 – the sentence is surely going to be appealed. I still don’t understand why she wasn’t taken into custody immediatly following the sentencing. Was it due to her “intentional’ pregnancy?
Prison time for Holmes? I’ll believe it when I see it. Meanwhile, she’s still enjoying life with no real consequences, only the inconvenience of going through legal proceedings.
I confess that I haven’t been following this case very closely, so I’m hazy on some of the details; please correct me if I’m misinterpreting.
As I understand it, she was convicted of crimes against investors, but acquitted of crimes against patients. This complicates matters considerably, especially given the distinct possibility that she did indeed contribute to the deaths of more than one patient who believed in her snake oil and therefore didn’t seek out what could have been life-saving treatment (or didn’t do so earlier).
But even if the crimes were only against investors, they were sufficiently great on the macro scale that a greater punishment would seem in order. I’m more interested in the micro level, however. It’s not difficult to imagine someone who, acting on faith in the luminaries she also deceived (at least I hope they were deceived rather than being co-conspirators), invested their life savings into her fraudulent corporation. And when the deceit is revealed and Theranos worthless… can we say for certain that no suicides resulted? Perhaps she’s not legally responsible… but morally? ethically?
In other words, if you steal $700 million from a multi-billionaire, that’s not a good thing. But if you steal the entire $100k nest egg from an ordinary citizen, that’s worse from one perspective: a perverse variation on the Biblical story on the woman who gave two mites. It’s also darkly ironic that she can afford the high-powered legal team that got her such a sweet deal from the judge precisely because she is guilty of the charges against her.
Sure, there are worse crimes. But there are also harsher penalties, even if we take the death penalty off the table. More to the point, we can argue about the length of the prison term. But a fine of $100 per charge? The statute allows up to $250k. As of now we’re forced to believe that she’ll emerge from prison with a lot of cash in hand. Even if the restitution (still undetermined, apparently) amounts to the hundreds of millions of dollars the prosecution seeks, she’ll still be a fabulously wealthy 40-something sociopath. Her political career is just getting started.
Off topic: Have you seen this? https://docs.google.com/document/d/1_vTk2EPGqe_4pjj9KntQLKAKO8ZqfL0Pquj89TlazYA/edit#
The list includes retired professors and, in my case, former adjunct professors. The goal is to get the issue noticed: you might want to join in. I almost never sign open letters or petitions, but I’m making an exception. And now posting about it…
At first glance it looks like something I’d support, but I’ll need a little time to give it a closer read, especially with the reference to other documents. Thanks for the heads-up.
Large scale financial fraud destroys lives and families. It can arguably have more overall destructive impact than murder(s). It should be as effectively discouraged and punished as possible. If no one actually died, or the extent of her damage wasn’t as bad as it might have been, that’s that ” moral luck” thing you often bring up.
No one died (that we know of) but millions suffered. She should have gotten the max.
There are so many problems with this case. How did she get blood tests sold in Walgreens without FDA approval? What about the people who received bogus blood test results? How many of those people had delayed treatment or the wrong treatment? What about all the people on the Board? Are you telling me a 22 year old snowed Henry Kissinger, George Schultz, William Perry (Defense Secretary), Sam Nunn, William Frist, William Foege (CDC Director), Adm. Gary Rougehead, Gen James Mattis, and others? Why isn’t there any culpability there? As with the current FTX scandal, if you are part of the in-crowd, the laws don’t apply to you. This sentence and the fact that she is the only one being held responsible seems to confirm this impression.
She was gorgeous, photogenic, young, purportedly brilliant, and went to Stanford. Diligence? Are you kidding? She’s a genius and she’s one of us!
She snowed all those intellectual stars in an old-fashioned way- using her womanly wiles to appeal to their greed.
Jack wrote, “What did Holmes do? Wikipedia has an excellent one-stop summary: the short version is that she invented a purported blood testing system that didn’t work, faked data, sucked in investors, doctors and patients, made billions, and engaged in all manner of lies, threats, manipulations and schemes to avoid the consequences of her actions.”
Based on the part I put in bold above my answer to the question “Is it too lenient, or too severe?” I say it was far too lenient. People who have an obvious blatant disregard for life working in the medical industry (boldface section 1) and then engage in the kind of things (boldface section 2) after they’ve been found out should be removed from society for a very, very long time and 11 years doesn’t cut it for me. She should have been sentenced to remain behind bars without parole until she is an old woman, so a more appropriate sentence in my opinion would be between 35-45 years.
Trust is essential grease that society requires to function smoothly. Too lenient.
WallPhone wrote, “Trust is essential grease that society requires to function smoothly.”
Especially trust in the medical industry!
By my count, that makes two ways, and there’s at least one more (as adopted by the Byzantines): maiming sufficient to remove the capacity, e.g. a prefrontal lobotomy would probably do it for Holmes (a male chauvinist SF story actually used this idea to deal with a female troublemaker among space cast-aways without losing her reproductive value). Less drastically, it’s not necessary to lock him or her away if free range analogues like the cangue or the barrel pillory could do the job (they probably wouldn’t, though, for white collar crime).
I have somewhere heard that an Italian woman used repeated pregnancies to stay out of jail for some twenty years, using a provision of Italian law that kept pregnant women and mothers of young children from being kept in prison until that situation changed.
It may not be politically correct to say so, but do you know just how misogynist some male homosexuals can be? You merely have to find some of merely neutral ones and seat them on the jury.
That’s two all right. I better fix that…
I commented on this post yesterday but I guess that comment went into the bit bucket or cyber abyss.
Spam got it, and I can see no reason why. It’s up now. I’m sorry. WordPress has been messing with its softeware lately.
Well, that’s not your fault; unlike “Booby Orr”. I had a late friend that was a New York Rangers fan and he didn’t like the Bruins or Phil Esposito. He always said, “Half of Phil Esposito’s goals were slap shots from Bobby Orr that bounced of his hip.”
Not 50%, but there is some truth there. Phil was famous for vulture goals.
Financial crimes might not take lives, but they most certainly destroy them.
Way too lenient.