"The defendants are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to the indictment returned yesterday and unsealed today, the charges stem from allegations Holmes and Balwani engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients. Both schemes involved efforts to promote Palo Alto, Calif.-based Theranos."
Does anybody know if Theranos got started with at least an idea how to accomplish what they wanted to do? From what I have heard in interviews they started with the thought "Doing xxx would be super useful" but didn't have an approach for accomplishing this but instead took in money and tried to figure it out. It's like me saying "An antimatter drive would revolutionize space exploration" and starting to collect money but without even the faintest idea how to produce one.
Does anyone know? Did Holmes have any insight that caused her and the investors to believe she could do the blood tests?
After the company launched professionals in the medical testing said it was impossible. I believe it was even posted to HN. They stated it was impossible to get the results they would get from the amount of blood given.
Sure. And while certainly "possible", how likely is it that a 19yo college dropout (who wasn't studying medical sciences) was able to discover a technique that did so, after forty years of multiple multi-billion dollar companies researching the same (after all, the brave new world offered by her dream was hardly new or unpalatable to other players in her field).
And her actions demonstrated she had done no such thing. Buying, hiding, deceiving around traditional venipuncture machines, etc.
This is someone who "had a dream", had connections, and was determined and stubborn, in a bad way. Even now she, and one or two of investors, still believe she has been robbed and wronged, and that the world is worse off without Theranos.
Interesting. Skinming through the comments, very little criticism, everyone in awe. Only way down there is someone stating how hard it is to get regulatory approval.
I guess that‘s HN still in full fanboy mode, before all those startups started to display their dark sides.
I don't see any fanboyism; I see interest, and surprise at the composition of the board. A bit down, I see strong criticism by medman77, who hasn't been downvoted.
An interesting observation is that medman77 would seem to be particular about FDA clearance vs approval, which is one sign of someone who does know what they’re talking about.
We don't know that. You can only downvote comments for a day(?).. but you can upvote forever. Considering it's been 5 years, and people keep linking to his comment... it's hard to say if he gained those points that day or years later after theranos was found to be a fraud.
It’s probably also a reflection of the fact that the flaw in Theranos’ goal was a medical issue, namely uniformity of sampled blood, and this isn’t a site of mostly MD’s. Part of it may well have been fanboyism, but it may just have been that most here lacked the requisite background to see the flaw.
I find the self-driving, or near-future Mars colony fanboyism here a little harder to take, because a much larger segment of the user base should know better.
I suspect you're right, but that also highlights a broad problem that we have in tech. In the face of missing expertise, most people assumed, or at least were willing to believe, that it was more likely that a tech company would be able to completely disrupt the way blood tests have been done, rather than question why something as simple as "use less blood" hadn't been done already if it were feasible.
If you read the book, it’s very apparent it was a case of fanboyism from a very specific demographic: older males in positions of power (WalGreens CEO, Safeway CEO, mulplitude of investors like Murdoch, Larry Ellison, politicians like Schultz and Mathis.) Many of these individuals had very educated voices on their team that constantly sounded the alarm bells only to be ignored and chastised because those in power were completely smitten and couldn’t fathom re-evaluating their positions. In one instance, Safeway staffers even half-joked that Safeway CEO saw in Holmes the daughter he never had.
Theranos was tight lipped on the tech. An alternative interpretation is that there was insufficient information on the tech at that moment for knowledgeable people to weigh in on, other than to observe that this is a difficult problem and a “red ocean” in a regulated industry, and it is hardly worth stating something so obvious.
Check out the top comment to April 2015: Scientists skeptical about Theranos blood test (businessinsider.com): [1]
> What stops the skeptics from doing their own tests by walking into a service center and having their blood analyzed for all tests possible and doing the same with their blood for conventional tests? Or an even large scale test?
> If their concern is genuine (rather than a way to get a look under the hood of a competitor for the current sellers of such services) there are multiple ways in which they could get their verification without inside information on how Theranos does its thing.
And for everyone one of those I can find about a thousand HN comments telling you to push on even if you're unsure about whether you can deliver.
Edit: For that reason, most of this "I told you so" sounds like hindsight bias if it comes from someone who would normally take the attitude of "fake it till you make it", "don't wait until you're sure you have a working product".
If you can find even one such comment that also offers a heuristic for when your self-doubt is justified and you should therefore quit, I will be surprised.
I was incredibly sceptical about a 19 year old with no experience starting a biotech company. All of my comments had a large number of upvotes (for 2015), while many of the people disagreeing with me were downvoted into the negatives.
The hard part is to do it in a way consistent with the rhetoric about “fake it till you make it”/“it’ll all work out”/“all self doubt is impostor syndrome”.
No. There's a sizeable contingent of people who will call out specific ideas as being "obviously BS", but who lack the insight to realize the dissonance with their mentality of "fake it till you make it". People who actually have a general answer for "when not to fake it, and give up instead" are the extreme exception.
Any citations on that? In all the hullabaloo about Theranos I haven't heard that there were serious theoretical difficulties with what they were trying to do.
It would make me feel somewhat better about the whole mess to know this was the case. A successful Theranos would have been the best thing to come out of SV since the Apple II. It was sad to see it fail because of executives' delusions.
I am no expert, but it's my understanding that blood in the capillaries (fingertip) is not exactly the same as blood in the veins.
> In addition, the small volumes involved and the variability in sample quality based on puncture site and technique make capillary sampling particularly susceptible to errors during the pre-preanalytical phase, which are beyond the control of clinical laboratory personnel
The major medical diagnostic companies had been working on microfluidic assays for a couple of decades before Holmes came along. It's a very difficult subject especially when it comes to immunoassays. This wasn't a blue sky field by any means.
There were numerous research papers on the topic, and some time spent with experts in the field would have also pointed her in the direction of the current research.
Almost too late she hired an expert from Abbott Diagnostics (who headed up a number of successful system projects for them), and he walked away after 6 months.
I'm not sure if there were "experts" of the same caliber calling the iPhone impossible. In fact, I don't recall anybody saying it was impossible, but would like to find out more.
I remember a ton of doubt, after launch, that it would be successful, but those people weren't really experts.
Here’s one example. Apparently RIM’s employees collectively thought it was impossible (to achieve the stated battery life); I think they count as experts:
> RIM had a complete internal panic when Apple unveiled the iPhone in 2007, a former employee revealed this weekend. The BlackBerry maker is now known to have held multiple all-hands meetings on January 10 that year, a day after the iPhone was on stage, and to have made outlandish claims about its features. Apple was effectively accused of lying as it was supposedly impossible that a device could have such a large touchscreen but still get a usable lifespan away from a power outlet.
The comments summarized in that article seem to no longer be available, but I have a hard time believing the summary is accurate. When the iPhone was released, there were already PDAs on the market with screens the same size or bigger.
The devices at the time with larger screens were larger, heavier devices that had shorter battery life. Nobody made a pocketable device with a screen that size.
I had an iPaq at the time, had maybe 4 hours battery life, and that was with wifi used sparingly. No 2g or 3g was possible. Slow processor. Crappy screen.
I definitely remember one supposed LCD expert who said Apple was lying about the iPad battery life. Said there was no way it would last more than 3 hours.
They had a good idea of what they wanted to do (blood tests using very thin needles) but never successfully figured out how to accomplish that with the level of accuracy required.
Most Medical professionals believe that what they wanted to do was simply impossible from a biological perspective due to the natural variations of blood content. It would have been like trying to determine traffic on a freeway by taking a brief glance through a tiny slit in a piece of paper.(This is why they draw so much blood for testing, to try and get a fairly representative sample.)
>determine traffic on a freeway by taking a brief glance through a tiny slit in a piece of paper.
taking 10 such brief glances may allow for some good enough probabilistic estimate though. Upon hearing first time about Theranos in 2013 i thought that they would do something like it, i.e. statistical approach based on some data mining as they would collect large number of samples, etc. - a typical SV tech based approach. One look at Holmes' black turtleneck photo and Glassdoors reviews mostly talking about Ballwani, and i remember immediately thinking - any even minimally advanced R&D is just not possible there.
In the tech industry, if it's worn as a uniform, it's probably a dead give-away that the person should be avoided (especially if there's any other supporting evidence related to negative behavior). It's a Jobsian mimic. There was one Steve Jobs, he was extraordinary in some ways, and he wasn't very nice. There isn't going to be another, he was the product of a unique circumstance. The next great person/s will be their own composition made up of the time and place.
Her fake voice is a lot more indicative than the black turtleneck though.
Ah. I read that she picked the black turtleneck as a compromise between being professional and not drawing too much attention to herself or dressing "too feminine" -- though who knows how true that is.
Because invariably whoever is mimicking Jobs' outerwear didn't go through the same process that Jobs did, nor develop the same philosophy that led to making that process even possible or an opportunity to spot, to arrive at that turtleneck. The turtleneck is a representation of Jobs' ideals and thinking around focus, quality, grace, craftsmanship, teamwork and many other attributes he admired. Even those people who go to the trouble to get the same kind of turtleneck from the same Japanese maker that Jobs did, I can practically guarantee they have only the vaguest clue why Jobs arrived at that turtleneck.
It is far more enlightening and satisfying for those people to develop their own sensibilities, find personal ways to express them, and through their force of will and drive, imbue their own meaning into their own habits.
Well stated. I'm a retired neurosurgical anesthesiologist who relied on accurate blood test results to manage major intracranial procedures. No way would I accept a finger-stick hemoglobin/hematocrit as the basis on which to decide on the need for blood transfusion.
Why? Because as a medical intern I did them routinely, because I had to get a number to present at morning rounds and even our excellent STAT Lab (LAC-USC Medical Center in Los Angeles) sometimes couldn't turn around a properly drawn venous sample in time.
Because it was often difficult to get sufficient blood volume from a finger-stick to fill even the tiny glass capillary tubes we used to "spin a 'crit" in a centrifuge, I would occasionally squeeze a patient's fingertip to enhance blood flow. Those results were sometimes wildly at variance with later venous samples from the same patient.
Why? Because they were diluted with interstitial fluid along with capillary blood, the result of my manual pressure on the fingertip.
Why is there such pressure to get a number to present at rounds if you know (and I assume the more senior staff would also know) that the finger-stick tests would likely yield inferior results?
Could you not have replied with something along the lines of "still waiting on lab tests, saw no reason to subject patient to unnecessary finger-stick test"?
This is the first explanation I've ever heard in 30 years over dozens of physicians/nurses for why a blood draw needs so much sample. And I wonder if young med students/nurses are taught that little fact about squeezing a fingerstick...
> It's like me saying "An antimatter drive would revolutionize space exploration" and starting to collect money but without even the faintest idea how to produce one
In America, it's perfectly legal to say "I'm going to make an antimatter drive; give me a million dollars." It's illegal to say "I have a working antimatter drive prototype; give me a million dollars." Holmes and Balwani did the latter.
Based upon what you said, there is just one flaw in your pmm. I know how to fix it. Unfortunately, I can't tell you. The secret is proprietary, and I need to make sure that it doesn't get corrupted, so everyone can use it for free.
> Did they have a prototype or at least a concept?
Not one that could do what they promised.
"The indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors. Specifically, the defendants claimed that Theranos developed a revolutionary and proprietary analyzer that the defendants referred to by various names, including as the TSPU, Edison, or minilab. The defendants claimed the analyzer was able to perform a full range of clinical tests using small blood samples drawn from a finger stick. The defendants also represented that the analyzer could produce results that were more accurate and reliable than those yielded by conventional methods—all at a faster speed than previously possible.
The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false. For example, allegedly, Holmes and Balwani knew that the analyzer, in truth, had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines."
Yes, they did. Which involved humans walking over the blood sample to a regular lab setup where they would dilute it and use regular machines to output wrong results. Now all they had to do was find a solution to replace the humans, not having to dilute the sample and output correct results. But pesky investigations got in the way.
From "Bad Blood": they had a prototype called Gluebot which used a robot arm to do standard tests involving a pipette autonomously. However, their tests (using blood collected at Walgreens) were done on "hacked" (altered to cope with much smaller amounts of blood -- by increasing dilution) Siemens blood-testing machines.
They did. They had two devices, the "Edison" and the "MiniLab".
The Edison was intended to run a full panel of blood tests, both chemical and immunological assays, off a finger stick of blood. It was also intended to allow Theranos to function as its own lab.
The Minilab was intended to run a full panel of blood tests I believe off a larger venous sample, and was expected to be marketed to existing labs (at this point, Theranos had been forbidden from operating its own labs).
In its own labs, Theranos made minimal use of the Edison, which was unreliable and supported only a few tests. Rather, they're accused of taking finger-stick draws, diluting them, and then feeding them into hacked-up adapters for COTS lab machines.
Do you believe Theranos could have beee successful company with less delusional management? (Honest question for a HN colleague for whom I have tremendous respect.)
I don't know anything about this space; all I know comes from Carreyrou's book. Somewhere towards the middle, one of his sources observes that it's particularly hard to get a good sample from a finger stick --- something about damaged blood cells --- and you can find recent journal articles online suggesting that finger stick samples are inherently a lot less reliable than venous draws.
Not a domain expert, but as I recall most of the things they want to test for aren't present at a sufficient level in the blood stream to get a statistically significant sample from a few drops.
Blood sugar is a relatively high percentage of your blood stream, which is why strip-based glucose monitors work.
Could they have successfully run tests on smaller sample sizes? Possibly, but the target market size is small (needing less blood isn't particularly advantageous unless you're dealing with children or babies without much blood in the first place).
The finger-prick-testing was always very likely to fail; the biology just doesn't work out in your favor. However, getting finger-pricks working was the entire basis of their strategy, not the "test using less blood" idea.
Not an expert in this field, but it seems like they could have pivoted to do a smaller sub-set of blood tests, like the immunoassays. Part of the failure was their insistence that they were going to do ALL blood tests through a finger stick. Once they had raised tens of millions of dollars based on taking the entire market, it was probably too late to de-scope the vision without losing their investors.
Their malfeasance was worse than that. Their "invention" gave people wrong information about their health, which in some cases put their lives in jeopardy. And they operated in a highly-regulated marketplace and tried to evade government oversight. These two aspects of Theranos put their fraud into a much more serious category than that of a typical narcissist-led SV vaporware company.
>From what I have heard in interviews they started with the thought "Doing xxx would be super useful" but didn't have an approach for accomplishing this but instead took in money and tried to figure it out.
I've been involved with many vc funded startups and have never encountered a situation where nobody knows how to achieve the core product vision. Nobody knows how to achieve profitability...sure.
As a data point, GV decided twice not to invest in Theranos, due to lack of transparency, a peculiar board mix and a sketchy experience in the field. They actually sent someone to a Walgreens.
Later they happily poured lots of millions into Magic Leap.
Keep in mind the actual fraud is NOT saying “we will try to do impossible task X” and failing. The fraud is going to extreme lengths to cook up results to drum up sales and investments.
UBeam might very well flameout but I think if you are evaluating a company for fraud potential, there’s no evidence of UBeam making up complete BS to raise investments. In that case, even if their tech doesn’t pan out, as long as they weren’t massively deceiving investors, it would be a failed startup, not a fraudulent one. They are not the same thing.
>Nobody knows how to achieve profitability...sure.
Yeah, I was referring to profitability, which, for a for profit company (and one that wants to attract investments), should be part of the core vision, and without which there's no product (just something akin to "selling" $10 bills for $5).
That said, wouldn't all the "pivoting" companies prove that nobody there knew how to achieve their core product vision?
Sure. That part wasn't even illegal. The early investors were honestly told that Theranos was trying to invent a microfluidics solution.
It crossed over into serious fraud when they stopped taking money to develop an approach, and started taking money on the pretence that they had developed an approach, when in fact they were just lying and performing the tests on commercial equipment they'd quietly bought elsewhere and hacked to use smaller samples (with resulting extremely poor accuracy).
And then they really fucked up when they doubled-down on this fraud by showing FDA inspectors a sham microfluidics lab instead of the actual working lab that just used standard equipment they'd quietly bought through various shells.
Vast majority of VC flameouts don’t put tens of thousands of lives at risk. Theranos had to void blood tests of 76,000 people just in Arizona. If Holmes had her way, that number would be millions.
My suspicion: Holmes heard about microfluidics at school, misjudged its position in the hype cycle (it's a red ocean, not a blue ocean), sold herself as an expert, raised money from people who didn't know better, and let the success get to her head because at some point she would have hired actual experts and they would probably have tried to steer her away from the known-hard problem she was trying to tackle and towards prospects that weren't as high-tech-disruptive but at least had a fighting chance of actually working.
It seems like a typical SV case of "fake it til you make it", except instead of risking a down website or burned investor, they risked harm and death of patients.
She clearly had some knowledge and strategy about the technology and likely fully intended for it to be successful, but responded to delays and difficulties with deception rather than just admitting it was harder than they expected.
"If we just get over this hurdle, we'll revolutionize medical testing and become legends." Not unlike Ponzi schemes which start out as legitimate investment ventures, do very poorly, and then just make up the return numbers. Martin Shkreli arguably pulled that fraud off "successfully" and actually got over the hurdle, but of course it came back to bite him.
They did start with legitimate attempts at implementing th technology needed to microfluidics (though apparently Holmes knew nothing about the field and didn't even know anything about existing players such as Abaxis, who actually had working machines).
However, they could not get the technology to work and abandoned several development paths in favour of a less ambitious approach that, among other things, involved doing blood analysis the old-fashioned way (manually in the lab), and only pretending to be using new tech they'd invented. They knew it didn't work, but kept selling it anyway, which is where it went from just faking it to outright fraud.
Most of their money was raised after they failed to develop their blood analysis technology, but to the investors, to the press and to their clients (such as Walgreens), they were still claiming to be using their proprietary technology [1].
>They knew it didn't work, but kept selling it anyway, which is where it went from just faking it to outright fraud.
I'm playing Devil's advocate and not justifying or defending their fraud and the physical harm they caused, but if we were to look at Holmes' intentions, I'm suspecting it was something like "we just need to do this for a few months/years until our technology works", rather than "let's just run this scam forever and get rich". As for how close they actually were to developing that technology (and assuming most of their talent didn't leave) or if it was even possible for them, who knows. And of course, regardless, they still intended to commit fraud and should pay the price.
Fake it until you make it is just a nice way of saying fraud. People that do that are being deceitful and should be publicly shamed and face criminal prosecution in some cases. They are scam artists, not honest entrepreneurs.
I would absolutely say that to them. It's doubtful they actually committed a crime but it shows a lack of character and constituition to say the least and potentially fraud to their investors. Fake it until you make it makes you a scam artist, con man, flim flan man etc... People that embrace that philosophy are frauds and cheats that should not be trusted.
Seeding a community where pseudo-anonymous users submit image/link content with images and links might be fraud by some semantic and technical definition (certainly not a legal one), but 1) it's pretty much necessary to get something like that off the ground, 2) no one is really being deceived or misled in a significant way. I'd say it's pretty harmless.
My understanding is reddit did this at the very start of the site's existence and stopped pretty early. They probably would've died quickly if they didn't seed some content.
I do, and the "fake it until you make it" doesn't fly very well in Europe; its generally frowned upon. Which also explains why there isn't much of a "startup culture" in Europe.
Reddit is an interesting case, but I'd say there's a categorical difference between faking that you are able to do something you can't (Theranos) and pre-filling a functioning site with content (I assume that's what you are referring to?).
It's especially relevant if the difference actually matters for whom you are tricking: If the results had been accurate (which from what I understand they weren't) and absent any other specific claims of superiority Theranos end-users wouldn't care about what tech they use, but for investors relying on claims that they can do something others can't to establish their value it obviously does matter.
Which in the case of reddit I guess makes the question: does it make a material difference for users if the site they enjoy is entirely fed by an organic community, or is the most important thing that the site is enjoyable regardless of origin? I guess you could argue that faking a community is also "faking that you are able to do something you can't".
Also known as "Fake it while awaiting unknown outcome." It's not like faking it guarantees making it. And since "unknown outcome" is kind of the default always, the most concise statement of this approach is really just "Fake it." Which is the problem. "Fake it" is so bad, that even if you later "make it" (like Shkreli for example), you still don't get forgiven.
It's easy to fall prey for psychopaths trying to second guess their intentions. "This can't be staged, that would be an unnecessary risk. Had they wanted to get rich quick they would have lied about this other thing instead". True intentions are illogical to other people, because they are the result of a limited, narcissistic and self centered world view.
(Not making any real life connections here, I am absolutely not qualified to call anyone medical terms, but in the subthead about clinical psychopathy it seemed important to point out.)
You're right. I can't make assumptions about her true intentions. But I don't think you or anyone else can either. It'll be interesting to see if anything new regarding that comes to light at trial. Maybe she's a pure sociopath, maybe she's a college dropout who was in way over her head and dug the company into a hole it couldn't escape, maybe neither, maybe both.
This sound like she started with good intentions but when it was clear she was failing she didn't quit but started lying until the lies got bigger and bigger. Sounds a little like Madoff.
In point of fact, that's not what happened in Madoff. There never were any investments made by Madoff's fund - his wealth management business was a fraud from the 1980s onwards.
I understand this to mean that the blue ocean opportunity is one where competition is scarce while a red ocean opportunity is one where competition is fierce and margins are tight [1].
Holmes and Balwani had some experience with microfluidics (IIRC), which is certainly sufficient chemical background to give them a credible belief that they could do what they wanted to do (run blood tests on smaller sample sizes). The ultimate problem with their goal is that when you do a finger prick, a large fraction of the sample is not blood but interstitial fluid and skin layers, which makes the results noisy at best and irrelevant at worst.
So the original genesis of Theranos probably wasn't fraudulent, but when things didn't work out and they started faking it instead, that was outright fraud.
My recollection was that there was someone involved early on who had substantial experience with microfluidics, but I'm having trouble pinning down who exactly it was.
She convinced her chemical engineering professor to be an advisor early on.
But the project she sold him on was based on her idea for some kind of wearable. From reading interviews I got the idea that he was more impressed with the wireless, wearable aspect (technologies he didn't have experience with presumably).
She certainly is not a good person but a lot of blame should be put on the VCs and board members. They could have figured things out if they had bothered to look.
That's true, but Elizabeth owned more than 90% of the voting shares in the company. The board was basically a formality because they had no power to make decisions whatsoever.
But that's also a big part of the board's fault here! They aided and abetted that. I'm reading through _Bad Blood_ (coincidentally, before the indictment was announced), and one of Carreyou's running themes is how Holmes acquired all those shares: she wasn't the Theranos founder, she was a co-founder, in essence. The other guy (Shaunak Roy) left early on. The board approved selling his stake to her at a heavily discounted price which made one of the directors unhappy and he tried to buy a fraction as he was contractually allowed to do, so they told to resign and threatened to sue him. She also tried to get a block of stock alloted to a nonprofit foundation (controlled by her, of course). Then, as employees turned over, they would regularly seek pretext to clawback all their options or shares in any way they could, like when they fired the financial officer for getting upset about faked demos, and discovered after firing him that he happened to have browsed some porn on his work laptop, which provided the necessary excuse. At one point in March 2008, the board actually decided to fire her, but she spent two hours talking them out of it. Some point after that, they passed the even horizon... That Holmes ended up with so much voting control was no accident.
> which made one of the directors unhappy and he tried to buy a fraction as he was contractually allowed to do
Point of interest: That director was Avie Tevanian, who designed Mach, NextStep, and OSX. Holmes wanted him on the board because of his connection to Jobs. He resigned from the Theranos board over this incident. (Carreyrou's book discusses this.)
Balwani knew nothing about microfluidics or blood work. He was a software guy who had gotten rich in B2B ecommerce during the first dotcom boom. And as Carreyrou points out, he had a reputation in the company for trying to sound smart by mimicing buzzwords.
This interview with John Carreyrou [1], the Wall Street Journal journalist who is largely responsible for exposing Theranos, goes into a lot of detail. It's long, so if you want a shorter answer, jump to the question "What technology did Theranos actually develop?":
Basically there were three iterations of the technology. The first one used microfluidics, which are basically the repurposing of the micro-fabrication techniques that the computer chip industry pioneered to move tiny volumes of liquid. Theranos tried to work on that for several years before Holmes lost patience in late fall 2007 and abandoned it. At that point she pivoted to what was essentially a converted glue-dispensing robot. One of the engineers ordered a glue-dispensing robot from a company called Fisnar in New Jersey, studied its components and rebuilt a smaller version of it. It was a robotic arm on a gantry with three degrees of motion and a pipette stuck to its end, and it replicated what the scientist does at the bench. That ended up being called the Edison and it could do only one class of test, known as immunoassays. It was also error-prone. The third iteration of the technology was the miniLab, which Holmes wanted to be able to do more than just immunoassays. The miniLab didn’t invent any new techniques to test blood with. It miniaturized existing laboratory instruments and packed them into one box. By the time Theranos went live with its tests, the miniLab was a malfunctioning prototype.
The interview also explains how Holmes was able to attract so many influential people on her board. The short answer is her Jobs-like "reality distortion field" -- she was exceedingly good at convincing non-scientists that their science worked.
> The short answer is her Jobs-like "reality distortion field" -- she was exceedingly good at convincing ...
Considering this and the lack of substance behind her claims, I would personally bet money that she is a clinical psychopath.
The most disturbing thing I have ever observed about human beings is our tendency to follow psychopaths. Psychopaths seem to have this gravity around them and people just fall into line. I've observed some spectacular examples. A psychopath can say the most questionable or even absurd things and people will just believe, whereas people will be skeptical of even very sane things that come out of the mouths of non-psychopaths. It's as if clinical psychopaths have some special instinctive ability to generate body language, vocal cues, and linguistic patterns that manipulate others very effectively.
I am not claiming that everyone with a "reality distortion field" must be a psychopath, but I've definitely observed a positive correlation.
I remember reading that a lot of CEOs and generally people in leadership positions have psychopathic traits. This probably is an asset if it's balanced by other traits.
I'd take those articles with a huge grain of salt. How could you distinguish a CEO with the courage to make an unpopular choice (e.g. layoff 1/3 of the workforce to save the company) -vs- a psychopath who does it to inflict suffering on others or to just establish dominance? How do you even measure psychopathic traits without defining exactly what "psychopathy" means and a rational ethic by which to judge the non-psychopaths (i.e. the "control group" or standard of normal)? Moreover, motive is not irrelevant to the question and not only is it not measurable by researchers, most people don't even know their own subconscious motives.
I'd bet if you dug into the research what you'd find is the research really shows that psychologists who study such things do not have the character/psychology of those who become CEOs, not that they are psychopaths.
Because you can't define pathology (deviation from a norm) without defining the norm. Modern psychologists dodge this question and implicitly assume various generally accepted moral standards and tenents (a form of circular reasoning) by which they condemn those who don't follow it. It is not science and to make it a science the psychologists should be seeking a rational basis to define ethics. Nobody has done this and until they do psychology will remain a pre-science like alchemy.
In addition, it would also be supremely discriminating if the "Psychopath exam" would, for example, consistently score Asians lower.
That is, a psychological or culturally acquired trait should not be used against an individual without a proof that it actually affects his behavior. You are in essence denying that the person has any agency and it's utterly incapable of learning and acting on society's moral code, which I bet is false for the vast majority of people with sociopathic tendencies.
A lot of communication is non-verbal. A person evaluating a statement in context and expecting to find some physical and culturally-instilled signs of self-doubt in their interlocutor may unconsciously be strongly pushed to conclude that the person is telling the truth when not finding those signs, even if the reason that those aspects of communication are absent is because the person is incapable of producing them.
I don't know about Holmes (other than having read Carreyrou's book) but I've been around pathological, charismatic narcissists enough to be as fascinated as you at their ability to lie to the face of very accomplished people and be completely believed. It's almost like executives need a training course in spotting and dealing with them.
my outsiders view of management training is that they work so hard at cultivating confidence that they start thinking that confidence, not competence, is what they need to select for in roles outside of leadership.
As far as I can tell, "leader types" are far more vulnerable to confident people than the rest of us because of this.
I also think falling for this is implicit in the notion of the MBA. Previously, management was mainly company founders, founder families, and people who had come up through the ranks. That is, all people who spent years learning the specifics of the business. But the theory of the MBA is there's some universal set of "business skills" that makes actually understanding the business domain irrelevant.
In practice, I think this means falling back on a limited sort of finance understanding and some generic notions of top-down business process. There's not much there, so they make up for it by leaning hard into their human instincts and skills.
Unfortunately, that leads to many problems, including over-trusting people who present well and seem confident.
The MBA is the Western version of the Soviet "apparatchik." This term denoted a party functionary educated in party ideology who was promoted and transferred around to different posts where they would lead things they did not actually understand.
I personally think the MBA system is a big step up from just choosing leaders based on how closely related to a powerful person they are. (I mean, I understand there is a lot of overlap between the two... I'm just saying that the MBA system is a step forward, not that it's good)
Unfortunately I think the MBA enables a power-and-politics system. If people have to work their way up and learn an industry, competence and a long-term focus are more rewarded than if a credential makes you a supposedly universal expert.
Psychopaths are parasites - one could make the argument that most of human culture, including our marriage traditions, religions, moral codes of conduct, sense of humor, and even fashion, are evolutionary attempts to thwart them.
Yeah, exactly. Psychopaths don't empathize, so they don't understand why social conventions exist, so they sometimes get it wrong and something seems "off". When someone seems "off" you don't trust them.
Yeah, and that's a big part of why (high functioning)autism is such a serious disability in the first place. I'm really glad that society is starting to recognize and be aware of it so that autistic individuals can get a pass in this area.
Unfortunately, what you described applies to people on the spectrum too.
But I think the key is the difference between sociopaths and psychopaths. Sociopaths are usually really good at using their charisma to move up:
>Psychopaths are dangerous. They’re violent and cruel, and oftentimes downright sinister. They show no remorse for their actions, usually because of a lesion on a part of their brain responsible for fear and judgment, known as the amygdala. Psychopaths commit crimes in cold blood. They crave control and impulsivity, possess a predatory instinct, and attack proactively rather than as a reaction to confrontation: A 2002 study found that 93.3 percent of the psychopathic homicides were instrumental in nature (meaning they were more or less planned), compared with 48.4 percent of the homicides by people who weren’t psychopaths.
>Sociopaths are a different breed. They, too, may suffer from their mental illness as a result of lesioned brain regions. Upbringing may also play a larger role in a child becoming a sociopath versus those that are diagnosed as psychopaths, or the slide into dementia on the other end of the spectrum. Sociopathic behavior is manifested as conniving and deceitful, despite an outward appearance of trustworthiness or sincerity. Sociopaths are often pathological liars. They are manipulative and lack the ability to judge the morality of a situation, but not because they lack a moral compass; rather, their existing moral compass is greatly (yet not always dangerously) skewed. Pemment, for one, says this could point to both a social and neurological component.
One of the patterns that interests me a lot is supernormal stimulus. An organism is evolved to deal with a stimulus in a certain range, and something comes along that is so far outside it that things break.
The classic example is Niko Tinbergen, who created models of fish that were rounder and redder than the real fish, who would ignore other real fish and focus on the models. The human ability to refine things produces a lot of good examples. Like how refined sugar influences us so much that it ends up in most processed foods. Or how refining the coca leaf produces addicts.
My theory with sociopaths is that giving no fucks what others think allows them to be unnaturally confident. Since we often evaluate others by how confident they are, we are easily taken in by people with supernormal confidence. That gives us the reality distortion field (as social primates, our main reality is social) and "drinking the kool-aid". Which is a metaphor Jobs used for how he wanted people to react to the Mac, but the metaphor is about a cult whose charismatic leaders led them to mass suicide. [1]
Wow. That is by far the most realistic and rational hypothesis for this phenomenon I've heard. It's simple, elegant, and seems testable. Thanks!
I think this may also offer some explanation for the appeal of the utterly absurd, like flat Earth or galactic emperor Xenu. Its supernormally ridiculous, which invokes a sense of fascination.
In any case if this is true I think this effect is being weaponized today to an unprecedented degree.
High profile sociopaths are extreme outliers, as most sociopaths burn through their social connections well before becoming competent enough at social manipulation and finding enough people that are well-off enough to maintain a parasitic life.
Also as a side note, within Scientology you don't actually learn about the Xenu shit until you're way too deep, financially and/or time commitment-wise, to pull out.
> Also as a side note, within Scientology you don't actually learn about the Xenu shit until you're way too deep, financially and/or time commitment-wise, to pull out.
It seems they’ve taken a page out of Masonry or mystery religions. Only higher level “initiates” receive the real wisdom.
The question is, are the high level initiates plain psychopaths?
Or are they just addicted to the free pussy (or dick), drugs, and money that comes with forcing others to join the cult?
Sometimes I wonder if it's better for a religion to have strange beliefs:
1a) It's a better show of commitment to the group if you are willing to stand up and say the absurd on behalf of the group. It's saying that membership in the group matters more to you than the potential loss of face. You could expect to be able to rely on such a person to be loyal to the group.
1b) It's also a better show of group commitment if someone is motivated enough to try to convince themselves of something very difficult to believe.
2) Groups espousing weird beliefs will face ostracism, and that will bind them more to each other. They will spend more time with each other away from outsiders, developing their belief system further with even less sanity checking from the outside.
Yeah. If I were to cast it into this framework, you could look at fundamentalist systems of thought as delivering a supernormal sense of understanding. Which causes supernormal confidence, making their views easier to spread.
An actual universe doesn't pack well into the 3 pounds of meat we use for thinking. A system of thought that lets us discard most natural ambiguity and nuance would be unnaturally comfortable. I think this is true both for obvious fundamentalism (e.g., Bible thumpers) and for single-explanation frameworks of thought. Freudianism, Marxism, and capitalism all have groups that are effectively fundamentalist adherents. And I think there's a species of Bitcoin fanatic that is also effectively fundamentalist.
I guess I shouldn't be surprised that this appears to be on the rise at the same time the Internet has brought us into contact with all the information and all the people.
You make an interesting observation. I wonder if there are any doomsday stories of an AI that conquers humanity via psychopathic persuasion rather than conventional weapons.
I am assuming they had some of the best people in the field working on these. Makes me wonder how much the employees were aware of the company's situation, and the infeasibility of some of these goals.
I have found that most people go along with the herd when it comes to money, and career.
Those that claim, "Not me!", are usually the last to raise their hand.
I have seen so many people con other people legally, and 1 out of a 100-1000 will even bring up the immoral/unethical behavior.
I walked out of Chiropractic School in the ninties after realizing it's a scam. The Subluxation is exceptionally rare.
I knew, along with my classmates that it was all a big scam, but we were invested.
A New Yorker, and myself were the only ones raising our hands when the instructor would say something rediculious like, "Chiropractic has over 17 different upper cervicsl techniques, and they all work equally well." Yea--Placbo Effect was a bad word.
In all honesty, it took a nervous breakdown to completely see the light.
I knew all along it was a sham, but figured I would be different Chiropractor. I would use the non-force techniques on patients, and refer if anyone didn't respond to my harmless placebo treatments.
In the end, I just walked, but took away something about human nature. Career, and money will cause most of you to look the other way.
Very aware, but information was strictly compartmentalized inside the company so individual employees had to figure out that things were badly wrong in different ways, depending on what their roles were and when in the lifecycle of the company they were there. Overall, though, the employee turnover was insane.
As someone who has spent a lot of time around startups, the amount of employee turnover was one of the craziest -- indicative in hindsight -- things in John Carreyrou's extremely well-reported book, "Bad Blood." Most startup boards would have looked at that level of employee turnover and realized that there was something much worse going on than a young founder without much management experience doing a poor job at hiring and retention. But the board apparently didn't get very much information about the actual operation of company, didn't push for more, and didn't question or dig into what they did get.
What I found most appalling about the behavior described in the book, and maybe among the most probative in the criminal case, is the heavy handed use of legal threats to stop employees from talking and negative reporting.
I'm willing to forgive quite a bit of "fake it till you make it" flim-flam, but anybody who uses such strong-arm tactics deserves having the book thrown at them.
>> The short answer is her Jobs-like "reality distortion field" -- she was exceedingly good at convincing non-scientists that their science worked.
This confuses a lot of people (not saying you are one of them), but this is really common in intelligent non-experts. People vastly overestimate how intelligent they are when they place value on their intelligence; in other words, they like thinking they are smart.
When they prize their own intelligence, they have false confidence about areas they have zero expertise in, purely because they feel they can figure it out.
So all it takes is someone with sociopathic tendencies and who has extreme confidence with a good CV, and bam, they're willing to go to the mat for that person. Holmes is one example but certainly not the only one.
Funny, the PhD taught me to keep what I say fairly limited. On the other hand, I find generalists will say all kinds of crap that "sounds true" but they have at best a weak theory and a couple of anecdotes.
I think by "generalists" he means "people who can talk seemingly brilliantly about a wide range of issues" rather than non-PhDs.
I would agree with his statement then. I have never met a brilliant talker who could actually do anything.
Many top mathematicians appear clumsy in presentations to the uneducated listener. It is a great tragedy that fluent talking (these days aided by teleprompter) passes for intelligence.
I don't doubt that that's true, but it's also educated, intelligent people who are more likely to have the kind of money that makes them targets for con men.
> ...they have false confidence about areas they have zero expertise in, purely because they feel they can figure it out.
The antidote to this effect: pick any object around you, and set out to make it yourself from scratch. Or just set out to make the precursors. An object as prosaic as say, a window. A lot of people who suffer from this effect dismissively wave away such a challenge, saying in more words that it's beneath them to attempt because it is so pedestrian, or of course they could do it, but they don't have the time to.
Those I know who are scary smart, are the ones who will more frequently pick up the challenge, and boy, are they fast at picking up what they need to know to meet the challenge.
Me, I just feel dumb every day, but have a heck of a lot of fun along the way. I also stick to far less lofty aims. A few months ago I had never owned a chainsaw before, and a few weeks ago I processed half a cord of firewood with a chainsaw, maul, wedge and sledgehammer into smaller chunks for my smoker. I respect the hell out of the woodsmen who walk into the mountain forest for a full day of work with nary but a milk crate of supplies and those machines, and the experience makes me appreciate just how vast an efficieny improvement they represent over hand sawing.
I think about this alot, starting from absolutely nothing I doubt I could even make a nail, let alone a screw, let alone a nut and bolt. I have no idea what iron ore looks like in the wild or where to find it. I could probably make charcoal and a furnace... if I had the tools, which I wouldn’t. It’s quite humbling.
I didn't want to get all management-consultant-preachy earlier, but you touched upon why I persistently perform that exercise. I believe there is a very valuable leadership lesson imparted by continuously performing that exercise first-hand. Too often leadership devolves into management, especially when people lose sight of just how fractally difficult many human endeavors are. The humility helps teach me perspective on problems and people.
That Australian aboriginal might live a dramatically different life than "developed world" citizens, but there is no way I can be convinced that on average, they aren't as smart.
What if I say making a window is a giant pain in the ass and I'm not set up for handling molten glass in that scale. I might could pull off a bottle or glass with the right equipment and a few hundred hours of training and practice. Is that reasonable? And yes I'd be buying tools and raw glass, not sourcing sand and blowing my own fire brick or making my own kanthal wire from scratch.
>>When they prize their own intelligence, they have false confidence about areas they have zero expertise in, purely because they feel they can figure it out.
I wonder how this squares with the Dunning-Kruger effect. Are domain-stupid generally intelligent people more susceptible than domain-stupid generally stupid people if they are equally cocky?
There's salesmanship and then there's lying. It might feel like a thin line but I think it's important not to conflate the two. Criminal behavior is not just "reality distortion".
According to the John Carreyrou book, not so much her parents, but an early and enthusiastic sponsorship from an influential Stanford professor, combined with a truly outlier ability to network with and impress powerful people. She accumulated an amazing amount of social proof, which she used to stockpile more social proof, ad infinitum.
Didn’t Carryrou’s WSJ stories say that her parents’ govt connections pulled in Schultz and got her connected to the military? I remember his reporting implying that a lot of the money Theranos raised seemed like it came in expecting military applications and thus military contracts. Which the military board (that her parents connected her with initially) would have helped with.
I believe that Carreyrou's book says Holmes built a relationship with George Shultz, then Henry Kissinger, William Perry, and Sam Nunn, through Stanford's Hoover Institution. They were all fellows at Hoover. I'm looking at page 181 in the hardcover edition. The book doesn't mention any family connections to Shultz. The military interest originally came from James Mattis, then head of US Central Command. The book says that Holmes met him "at the Marines' Memorial Club in San Francisco," but doesn't say more about that first meeting.
There’s one other REALLY important reason why Holmes was able to raise money. Remember venture firms with blood test knowledge like Google V were turning her down.
Holmes was close family friends with George Schultz, and that allowed her to do two things. First, get a bunch of military and government guys on the board. And second, sell to the military.
That was Theranos’ real ace in the hole. Holmes knew top military brass and they were going to give her military contracts to test soldiers’ blood. We don’t know what she was telling investors, exactly, but that seems like a real source of revenue investors would care about.
Carreyrou describes how it was a mid level DoD employee that screwed up the plan - he looked at the data and scuttled the contract even though the generals wanted to award it to Theranos. Hat tip to hard working, honest govt employees.
How about Tyler Shultz? The main whistleblower and grandson of George Shultz. He was working at Theranos and realized they were a giant fraud. He lost his job, was harassed by lawyers, he and his parents almost had to sell their house to pay legal fees, his grandfather wouldn't speak to him anymore, etc.
Basically the gov't employee, son, and likely others we don't know about lost their jobs and even blacklisted.
I say 90% of VC back companies are blowing smoke to the endpoint investor, public and consumer. 100% of those companies have miracle products that scale forever and work... In 1 specific ise case: the demo booth. They oversell. I see 2 out of 10 startups bring a viable product to the global 2000 table.
Spacex: we can go to Mars, but haven't even launched a Mars rocket.
Google: AI is here, and the product? Waymo, logs millions of miles, is just sunny conditions?
The common strategy: lie(aka promise), sell the future, hopefully you get the solution and hit time to market. Holmes was following the same playbook, BUT just gave up, and that's got her investors and comsumers furious. If she apologized, AND stuck with it, investors would still back her, and the public flac would have subsided....VCs were sold on her future.
On the opposite end, aside from real mistakes is a company like Apple: they sell the future and deliver.
> Spacex: we can go to Mars, but haven't even launched a Mars rocket. Google: AI is here, and the product? Waymo, logs millions of miles, is just sunny conditions?
I don't think that is their literal message and goal. SpaceX's real mission is to innovate space travel which they've been capable of doing and have demonstrated with clear achievements.
SpaceX's revenue is in the billions and is very close to profitable. It most likely would be profitable if it wasn't constantly spending money to expand like Amazon in its early years.
I don't think those examples match very well. Theranos really didn't have anything that worked. Spacex has rockets that work and satisfied customers. They aren't going to Mars yet, but most of their current satellite launch customers probably really don't care.
And of the various self-driving car efforts, Waymo seems one of the most careful, both in their engineering and PR. I don't recall them making any claims they can't back up, but I may have missed some.
Holmes was not following the same playbook, there's a big difference. What you say holds true for the early investors who may have been sold the future expectations, however, long after that Holmes recruited investors by stating that they have a "working Mars rocket" that's being used right now, when in fact it was smoke&mirrors using altered Siemens machines instead of the claimed Theranos technology.
The difference between saying "we expect to have X working within a year" and "we have had X for a year" is that if X doesn't work out, the second sentence is a crime of fraud. And Holmes was on the wrong end of this difference.
They're not prosecuting for the broken hopes of 2004-2006 investors (who were sold a future that didn't materialize, oh well), they're prosecuting for misleading the investors of, say, 2014 by lying about the achievements of their first 10 years.
Extremely brave what he did, especially when it means combatting his own (extremely wealthy and powerful) grandfather. The court of public opinion and the history books will see him as the hero in the end, at least. And he's since started his own medtech company.
In the short-term, his life was a nightmare and Holmes and Balwani held all the cards, but in the long-term he'll probably be successful and considered honorable while Holmes and Balwani will be disgraced at best and convicted felons at worst.
Except, unlike Jobs, she couldn’t actually execute. The Jobs distortion field wasn’t a parlor trick, he was able to actually create the reality. Holmes was unlike Jobs in every way other than in her own mind. Look at all of the products that came from Jobs’s distortion field. Look at the wasteland of false promises resulting from Theranos. She was selling lemonade and calling it vodka.
My understanding is that they could measure ~95% of what they wanted, but the remaining 5% needed for full accuracy certification was out of reach with the limited tests they were performing. And that this was the difference between their tests and more expensive tests.
For anyone wanting to dig deeper into this the recently released Bad Blood book is pretty awesome. The author, the WSJ jornalist above who early on raised serious doubts about Theranos, reconstructs the startup history in a thriller-ish style, but fully based on actual facts/research. Highly recommended.
It was all ideas and plans. They built machines that performed significantly worse than standard tests. Their idea was one machine to run virtually all blood tests with a few drops of blood, their final machine only ran a handful of tests and was so inaccurate that only reason the FDA did not shut them down instantly is they used a loophole to claim it was not a testing machine but just in house lab equipment to assist with testing or some nonsense that meant they did not need FDA to sign off on the machine. Holmes was just a smooth talker and convinced everyone, it also helped that she had major players on her board and even Bill Clinton was supporting her.
The one really weird thing i noticed about her is she never blinks. Watch her give talks and it is like a robot never blinking
I have a book called "The Creator's Code" [2015] that praises Elizabeth Holmes right along side other successful SV entrepreneurs like Musk, Hoffman, Thiel and others, diving deep into their story of how they became successful.
Back in 2015, it was the same story they told investors: We can do an expensive blood test for a fraction of the cost in a fraction of the time with better accuracy.
Unfortunately, it sounds like they defrauded investors with false claims, which is why they were able to get so much funding without a real, viable product.
Those kinds of business plans were typical of that era and venture capitalists were accustomed to investing in lofty dreams. Naturally, it didn't pan out most of the time and they've gotten smarter. Theranos managed to outlive most of their peers, it seems by turning to deception instead. From my reading, it seems that the failures are old but the crimes are recent.
Abbott sells microfluidic hand-held blood test machines right now.[1] "Just two drops of blood". These have been around since 2006. So it's possible to do this.
I'm reading the book Bad Blood at the moment. It's a cracker. Assuming it's true, the level of wilful negligence and fraud is astounding. What is unbelievable is how they got away with it for so long.
While Theranos was flying high, much was made of the company's connections to DC power elite - Kissenger on the board, etc.[1]. And the implication usually seemed to be that the deep bench of Serious And Important And Powerful People allowed the company to get away with things that otherwise would not have been possible.
I think it's worth pausing to consider: when's the last time you heard of a startup CEO/CTO team getting indicted for wire fraud? I'm not saying it doesn't happen, and I have no position on whether Holmes and Balwani are guilty of these or other charges.
But I do have to wonder whether the degree of attention from the DOJ has more to do with avenging the reputational and possibly financial losses of those same board members, than garden-variety "the DOJ prosecutes fraud".
In which case, there'd be a civics lesson as well. Live by .gov, die by .gov.
(Edit to clarify, lest I be accused of insufficient virtue signaling: fraud is bad, don't do it, if they committed fraud they should be punished, etc etc.)
> I do have to wonder whether the degree of attention from the DOJ has more to do with avenging the reputational and possibly financial losses of those same board members
The response to evidence against a conspiracy theory is not to flip the conspiracy theory.
If you defraud investors out of billions of dollars and lie to Medicare and Streisand effect the Wall Street Journal when it investigates you, you're going to get busted.
The response to interesting speculation is not to use an impotent pejorative term to dismiss it followed by painfully boring 2D checkers-tier speculation.
I recall Carreyrou (the journalist who wrote this article and exposed them originally) saying a few weeks ago that he thought it was a bad idea for them to keep operating the company, that it was probably antagonizing the DOJ. This is just a hunch, but it may be that they (the DOJ) were convinced that if not indicted, they would try to do it all again (find a new bunch of investors to fleece). If so, I think they might have been correct.
> But I do have to wonder whether the degree of attention from the DOJ has more to do with avenging the reputational and possibly financial losses of those same board members, than garden-variety "the DOJ prosecutes fraud".
Or these two are convenient patsies..
Did they really lose money?
Theranos had huge contracts for blood testing at major national pharmacy chains for a year or two, and if you follow the timeline, there's a ton of related activity requiring well connected people which seems to indicate rushing things out the door to make sure they could get these contracts..
AFAIK not nearly all the information has been discovered or presented, and much of this never will.
How about the 'convenient' intervention of mattis into military trials of the technology? Just because it sounds like tinfoil hat doesn't mean it's not true (see also: snowden)
One chapter talks about Mattis, including various emails that were sent. He comes across as genuinely wanting to do the best thing for his men and hoping that Theranos could save lives in the field. There never were any field tests, because Mattis listened to his underlings when they said it would need to get FDA approval first. They then offered to let Theranos test random blood samples to validate the results but Theranos never took them up on that offer.
The American Criminal Justice system rightly faces many criticisms, especially serious charges for being used against minorities. But yes, knowing that even the most powerful person in the country is not above the law and can and is prosecuted seriously, and that scammers like Holmes and Balwani are made to pay for their crimes.... this kind of thing is certainly what makes the US unique among nations.
Let's not get carried away. Canada and many if not all of the nations of the EU have a similar capability.
The US justice system sucks, let's not endow it with special "uniqueness". However, I am happy that corporate criminals are facing some penalties for their activities that could harm the public.
EDIT: Also, just because after waiting years and years, we see one or two criminal executives go through the Justice system we shouldn't get too excited. Companies lie and cheat the public all day, that's how they get so rich. The system has to produce one or two examples of something approximating justice every now and again basically to forestall revolution. The poor go to jail, the rich play games. A handful of prosecutions at the top doesn't change that dynamic.
> the US justice system sucks, let's not endow it with special "uniqueness"
The rule of law, where elites fear the law and not a ruler, is in the minority today and across human history. I certainly think it’s something to celebrate.
it is also what makes this country great. not that someone like Trump understand that. For a society to function harmoniously, it must believe that their society is just, and that those who commit crimes will face justice, whether its pusher on the street, or the President of the United States, and that, not only will justice be served, but clemency granted in equitable fashion when so deserved.
The moderation on HN is so capricious that I think I'll no longer participate. My stupidest and even insulting comments get upvoted and my thoughtful ones downvoted. Whatever. Good bye.
I’ve heard our justice system best described as a slow moving giant boulder that rightfully positioned will crush those who hurt society.
The problems manifest when the innocent get trapped in its path.
Good to see today that a few folks who deserved justice got some. It feels like it has been a long time since rich and powerful people were in its sights.
I realize the ongoing support of this founder looks pretty bad. But in all my interactions and work with Tim Draper, I've found him to be an ethical and good person. He is nuts in an amazing way, and of all the investors I have met in the valley, I can't think of any other one I'd entrust with his influence.
He is good at tech and investing, no doubt. His political ideas are interesting but his money gives him way too much influence in other areas that aren't his main expertise.
And supporting Holmes for that long and even now looks really bad and is very difficult to justify.
That may be true, but if Holmes wasn’t stopped, thousands could have died...people trusted her to get accurate blood test results. What if some major medical ailment went undiscovered due to the poor accuracy of her machines?
Holmes is a ruthless, despicable humnan being. Cheating people out of money is one thing. Cheating people of their health, denying when caught for years and years is on a complete another level. And what she did to the poor whistleblower? Almost ruined his life and went a few rings below murder to her chief scientist. Not to mention the mafia style shakedown of John C, the reporter who broke the story.
If someone knows all that about a person, and still glowingly praises them, in my opinion they are NOT ethical and not a good person.
Are there still functional political machines in the US? The Chicago machine survived the 40's but was killed by the Shakman Decrees 20 years ago.
(There's still a formidable political party to be sure and a bit of graft wouldn't surprise me, but it seems almost sarcastic to compare that to eg the New Deal political machine, or the Chicago machine of ol'.)
While people sometimes use "political machine" to mean "a functioning, robust party" nowadays, a "political machine" refers to a specific system of patronage, where campaigning for a politician or political party is rewarded with government jobs, and anyone supporting the opposing party was rewarded with unemployment.
At the height of the Chicago political machine (and New York, and ...) tens of thousands of city jobs were used to reward campaign workers, not just big donors and campaign managers but the people who knocked on doors or district leaders who ensured good turnout in their districts. At the height of the New Deal political machine, the WPA was used to do the same.
Rahm Emanuel, meanwhile, has "good relations" with Chicago businessmen and receives giant campaign donations; Michael Madigan tried to get jobs for a half dozen people and was shutdown hard.
Being familiar with the process, it looks like they're out on supervised release. Non-custody. No point in putting a warrant out for someone when they're at the courthouse to be arraigned.
I don’t want to excuse Holmes of her many crimes nor rob her of agency, but the circumstances in which they met do not reflect well on Balwani’s character.
"The defendants are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud."
WHY DO THIS. Each count of wire fraud is 20 years in prison [1]. If 9 counts are proven you are looking at a 180 years in prison. (life sentence). You are better off doing 2nd degree murder 3 times - at least it is a challenge to prove. Proving wire fraud sounds pretty simple - they just read a bunch of emails and text messages in court. Everyone will turn nasty on each other due to the harsh penalties. Wire fraud = bad times. Just be honest with your investors.
They don't think they will get caught. For a live example, see HN's cryptocurrency threads. A common theme is talk about faking KYC or laundering money or how their scam is too small to garner federal attention.
I think that people can succumb to their egoes, similar to why some celebrities commit sexual crimes or are know for doing unthinkably rude actions. Something changes in people who acquire enough power and have the right combination of exceptional drive and sociopathy - which I think can incubate in an environment where they're in control over everyone and never told "no". It's the same mechanism in narcissistic people who hurt others and deny it and even turn it around and play the victim. Somehow they believe in a different version of reality. In Holmes' case I doubt she ever believed she was perpetrating a crime.
First, 20 years is the maximum guideline sentence available for wire fraud. The Federal Sentencing Guidelines has a points-like system (with points added for various attributes of the crime, like whether the accused took steps to conceal their crime, or crossed some dollar threshold) that heavily counts the prior criminal history of the accused. This is an egregious wire fraud case, but it's still a little unlikely that any one count will see the maximum sentence applied.
More importantly, the norm in federal sentencing is for similar charges to group, and for the longest of those counts to set the sentence. It is not the norm to serve (here) each of the "nine counts" consecutively.
> "The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false. For example, allegedly, Holmes and Balwani knew that the analyzer, in truth, had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines."
I have been in this exact place before. For the two of them, this day will be just about the worst of their lives.
This is ordinarily when hard-core criminals are taken into custody. If their experience was like mine, they had to show up in front of a magistrate with their lawyers, plead not guilty, then go to a dungeon for about 30 minutes while they get handcuffed, fingerprinted, mugshotted, and DNA-swabbed. Then, off they go until trial. It's basically like being free, but you have to stay out of trouble and report all contacts with law enforcement.
Being rich (or from money), they won't have to worry about federal defenders or CJA representation, which wouldn't be near as bad as dealing with a state-funded public defender. There's a small chance they'll have to go this route anyway, since the government can snatch the money in dispute and block you from spending your ill-gotten gains on high-priced legal representation.
Don't let the "sticker price" fool you. They're not going to have to serve consecutive 20-year terms for what they're accused of, even if they take it to trial and get found guilty.
They will probably get their first plea offers in about a year. Most people take the plea. In the event they refuse to plead guilty, trial will probably take about 2-3 years from today.
Holmes will be offered, I'm guessing, about 6-9 months and a joint-and-several "money judgment" (restitution + forfeiture). Balwani, about 5 years and a joint-and-several "money judgment". This may be a package deal too, so Holmes may not be able to take it if Balwani won't. Why the discrepancy? The 28th amendment hasn't been ratified yet.
Before my experience with this world, I would have been eager to join in the collective bloodlust, with the pitchfork-and-torch crowd clamoring for these overprivileged defendants to sit through a trial and rot in prison. Take it from me: I wouldn't put my worst enemy through even just the trial.
Given the forfeiture terms at the end of the indictment, it looks like they'll both be zeroed out if found guilty (which seems like a near certainty), regardless of how long they're kept in custody.
Re: "putting my worst enemy through", I don't know, this doesn't sound as bad as growing up in a war zone or even the ghetto, or getting waterboarded. Sounds like bureaucratic hell, but that's not even close to how bad things can get.
I believe in proportionate and fair punishment for crimes committed by anyone, let alone my worst enemy. Bureaucratic hell seems more than reasonable for the crimes committed by Theranos leadership. And I'm sure the trial won't be as bad as prison.
The craziest part of the justice system is how dependent on money it is.
I am in a weekly support group for people with the same offense category as me, sometimes crimes not as bad as mine. Most of the members in this group are working class - hourly jobs, no savings, no emergency funds, government lawyers. They mostly had to serve time, had to register as offenders, have strict stipulations.
Meanwhile I was able to borrow money from my parents, got a good lawyer, and all I have to do is check in with probation once a month for a few years.
This applies to everything in life ever. People with resources have better outcomes. I don't know how you solve for that no matter what systems you put into place.
Can you expand on your experience with indictments like this?
It rings true to me that, in general, the average person would have much more compassion for 'bad' people in 'bad' situations if they could live a day in their shoes.
Eerily similar experience, down to the charges and the 11 counts.
I don't disagree, but the average person on a jury just does what the lady in the skirtsuit tells them to do so they can get out of there. Most people you want on a jury throw away their summons with zero risk to the practice.
I looked into your case a bit and I agree your sentence is unduly harsh. You fraudently redeemed rewards for a bunch of fake people and make $100k, I don’t feel like this warranted everything that happened to you and your family. Sucks to be made an example of :/
NB: Mods, not sure if this is allowed, feel free to remove if not. Information was gathered using information freely offered by HN profile and LinkedIn.
This is ordinarily when hard-core criminals are taken into custody.
It's basically like being free, but you have to stay out of trouble and report all contacts with law enforcement.
There's a small chance they'll have to go this route anyway, since the government can snatch the money
They're not going to have to serve consecutive 20-year terms for what they're accused of
Holmes will be offered, I'm guessing, about 6-9 months and a joint-and-several "money judgment" (restitution + forfeiture). Balwani, about 5 years and a joint-and-several "money judgment".
Take it from me: I wouldn't put my worst enemy through even just the trial.
Quite an interesting contrast between what privileged rich people have to worry about vs poor. Nearly every one of those points are solely because you have money, not merit-based. I guess this is when the world proves what really matters.
> Quite an interesting contrast between what privileged rich people have to worry about vs poor
This is speculation. Let’s wait to see what is handed down. It was common thought on these forums just weeks ago that money and connections would buy Holmes out of an indictment.
The most recent true crime documentary series on Netflix, 'The Staircase,' talks about this. The defendant, a wealthy individual, ends up paying around $750,000 out of pocket for his defense. He asks the question what this would have looked like if he was poor.
Often times the paying the time part causes far more destruction than intended. The cost to jail someone is huge and the criminal record that people get often forces them into a cycle of crime because they cant even get a legitimate job.
If Homes and Balwani had confined their predations to the general public, they'd still be free and wealthy. It's only because they also swindled some plutocrats that they're going to have to return most of their plunder.
I feel like you are playing the victim in this situation. Tone is hard to read through text so please forgive me if I misread your factual statements based on your own experience.
Both of these people fully deserve what’s coming to them. They lied to investors, they lied again to investors to keep the company afoalt, and above all they seriously jepordized medical results. It’s one thing to challenge status quo or even current regulations, a la Uber.
To mess with people’s health or their perception of it is completely wrong. We should not minimize the situation. Again, I cannot tell your tone. I’ve been following this for a while and it was obvious what would happen from the moment the whistle was blown.
You were convicted both of a scheme where you bypassed OfficeMax's limits on the number of printer cartridges any one person could redeem, and for a separate scheme where you claimed the purchases of strangers as your own to cash in on their rebates. A lot of people here might disagree with how much prosecutorial attention was heaped on you, but "victim" is laying it on a bit thick.
Tom, you're still not getting it. Falsified evidence. Not just falsified, but clearly in the case record falsified. Anyone can be a victim of that. Happens every day.
Thanks for the backhanded compliment on the infographic; I wouldn't mind your following me around if you got your facts right.
Fuck their investors (which would have been saved the pain by giving some money to a real scientist during their due diligence), their customers were actually patients, just imagine the life altering decisions you can make or not based on wrong tests...
> Why the discrepancy? The 28th amendment hasn't been ratified yet.
What do you mean with that?
As far as I can tell, a 28th amendment hasn't even been proposed, although there is an urban legend about it that circulates in chain mails.
However...even that fantasy amendment is about equal treatment of citizens and members of congress...not sure how that would apply. The closest I can see is that Holmes's mother was a congressional staffer, but that's (a) not her, but her mother and (b) not an actual member of congress and (c) the laws aren't actually different here(?)
Equal Rights Amendment. It's alive and well. Illinois just ratified it, and we need one more state to reach the magic number.
As soon as the right wing of America realizes that men are sometimes discriminated against, we won't be waiting long until one more state legislature puts it over.
But yes, referring to a proposed amendment as "the 28th amendment" is very confusing, since there will always be multiple proposed amendments at any given point in time.
Thanks for sharing your experience. Criminal justice is hard stuff.
> Why the discrepancy? The 28th amendment hasn't been ratified yet.
I predict Holmes gets at least as much time as Balwani, if not more. Why? Many of the most compelling causal explanations for the (very real and concerning) gender sentencing gap aren't applicable to this case.
(On a related note, I had an exchange about gender gaps in sentencing with another HN user 3 months ago who was complaining how unfair it was that Holmes "is spending exactly zero days in prison" and got off with "a slap in the wrist" compared to Shkreli [1].)
I have a lot of sympathy for you, because I know that decent people are railroaded by federal prosecutors every day. That's not what's going on here. Prosecutors are attacking wealthy interests, not just defending them. (Since this is primarily a dispute among investors, wealthy interests are in opposition. Prosecutors have to choose a side, and they always choose the one farther up the pyramid.)
It's actually pretty unlikely that Holmes and Balwani will lose all of their fancy properties, because that sort of scene also upsets the plutocrats. They'll just have to give back most of the millions they've squirreled away.
The fact is that we don't know what actually happened, only what the government and media want us to know, even if it isn't so. They look guilty as hell, but so do innocent people.
Trial by jury is better than trial by media, so I'll take the high road and reserve my judgment until then.
At least in this case the media has changed its mind, which seems rare? I remember when Therano-doubters were written off as sexists rather than skeptics. If they had a working product and a mere investor disagreement, I'd be as suspicious of the Feds as I usually am. In this case there is no sign of a functioning anything, and apparently they've broken rules about medical safety.
Anyway, trial by jury is not great. If one can avoid it by appealing to the media, one definitely should do that.
Interesting timing as Preet just had part 3 of his Criminal Justice mini-series as part of his amazing Stay Tuned podcast [1]. This episode focuses on the experience of a defendant Preet's office convicted of insider trading in the Galleon Group case. He speaks to the entire process, how he felt throughout it, etc.
Someone asked how she hadn't been indicted a few weeks ago, and I said that the investigation was ongoing but she would surely been indicted. Everyone following this case closely saw this coming.
Basically, Elizabeth Holmes wanted to be a billionaire and restore her family's fortune. She started a medical tech company but didn't include any scientists or doctors on her board. Demos and employment were tightly controlled by NDA, and structured so as few people as possible knew about the scam. Somewhere between 1-8M (10-100%) of blood tests Theranos performed on hacked machines from other companies are suspect or outright wrong. Her company rode the "unicorn" wave at just the right time to get lots of funding and publicity, even though it has been operating since 2006.
Reading the theranos story, what’s going on in the political spectrum today, watching the steps people seem to have taken to get where they are to influence the society and then seemingly failing at it, I am always reminded of the documentary “Enron, the smartest guys in the room”. It’s such a simple idea that likely one thing led to another and they have climbed a ladder to defraud investors and tried to cause public harm. Those first steps were maybe of good intentions or maybe of bad ones. But somewhere along the way, they clearly created a bubble of their own where they assured themselves that it’s ok what they are doing. Never lose the outside reference point. Never.
So I mean like, fraud is definitely not a good thing, but COUNTLESS government contractors committed outright fraud and embezzlement during the Iraq War, and none of them were ever held accountable.
One of them even made 8 billion USD completely disappear from the "Iraq Reconstruction Fund".
Because not everyone who smokes is caught, and some plead guilty to get an easy sentence, laws differ based on location, and case circumstance is not always the same? This is how the system works.
"The system" is logical and ethical, in your opinion? I'm trying to call into question here if "a crime" on paper is a crime worth enforcing.
When the black man in New Orleans is thrown in jail for smoking weed, but the black/white/asian male in Iowa goes unprosecuted, how much of a crime is the crime really?
You either need 100% prosecution or 0%. Murder is murder, fraud is fraud, isn't it?
>but COUNTLESS government contractors committed outright fraud and embezzlement during the Iraq War, and none of them were ever held accountable.
I don't know about your country, but here usually all the higher up's in the chain are on the payroll, so you are safe, even if shit hits the fan. That is one of the nice thing about stealing from government. Because you are not actually stealing from the government, but instead, you are just helping the government steal from the people, a part of which is rewarded to you.
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[ 3.2 ms ] story [ 329 ms ] threadhttps://outline.com/dUwMC4
Does anyone know? Did Holmes have any insight that caused her and the investors to believe she could do the blood tests?
And her actions demonstrated she had done no such thing. Buying, hiding, deceiving around traditional venipuncture machines, etc.
This is someone who "had a dream", had connections, and was determined and stubborn, in a bad way. Even now she, and one or two of investors, still believe she has been robbed and wronged, and that the world is worse off without Theranos.
“There are more soldiers in that board there than doctors” is one of the original comments!
I guess that‘s HN still in full fanboy mode, before all those startups started to display their dark sides.
I wonder if he/she was from Nanomix (nano.com, another company working on similar technology since 2000)
We don't know that. You can only downvote comments for a day(?).. but you can upvote forever. Considering it's been 5 years, and people keep linking to his comment... it's hard to say if he gained those points that day or years later after theranos was found to be a fraud.
I find the self-driving, or near-future Mars colony fanboyism here a little harder to take, because a much larger segment of the user base should know better.
> What stops the skeptics from doing their own tests by walking into a service center and having their blood analyzed for all tests possible and doing the same with their blood for conventional tests? Or an even large scale test?
> If their concern is genuine (rather than a way to get a look under the hood of a competitor for the current sellers of such services) there are multiple ways in which they could get their verification without inside information on how Theranos does its thing.
[1] https://news.ycombinator.com/item?id=9440595
Edit: For that reason, most of this "I told you so" sounds like hindsight bias if it comes from someone who would normally take the attitude of "fake it till you make it", "don't wait until you're sure you have a working product".
I was incredibly sceptical about a 19 year old with no experience starting a biotech company. All of my comments had a large number of upvotes (for 2015), while many of the people disagreeing with me were downvoted into the negatives.
The hard part is to do it in a way consistent with the rhetoric about “fake it till you make it”/“it’ll all work out”/“all self doubt is impostor syndrome”.
There's a sizeable contingent on HN that is sceptical of that mindset in general, which was my point.
It would make me feel somewhat better about the whole mess to know this was the case. A successful Theranos would have been the best thing to come out of SV since the Apple II. It was sad to see it fail because of executives' delusions.
> In addition, the small volumes involved and the variability in sample quality based on puncture site and technique make capillary sampling particularly susceptible to errors during the pre-preanalytical phase, which are beyond the control of clinical laboratory personnel
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4622200/
It is well known to any diabetic, or to anyone who played for a few minutes with a blood glucose monitor.
There were numerous research papers on the topic, and some time spent with experts in the field would have also pointed her in the direction of the current research.
Almost too late she hired an expert from Abbott Diagnostics (who headed up a number of successful system projects for them), and he walked away after 6 months.
Turns out in this case they were right.
I remember a ton of doubt, after launch, that it would be successful, but those people weren't really experts.
> RIM had a complete internal panic when Apple unveiled the iPhone in 2007, a former employee revealed this weekend. The BlackBerry maker is now known to have held multiple all-hands meetings on January 10 that year, a day after the iPhone was on stage, and to have made outlandish claims about its features. Apple was effectively accused of lying as it was supposedly impossible that a device could have such a large touchscreen but still get a usable lifespan away from a power outlet.
http://www.macnn.com/articles/10/12/27/rim.thought.apple.was...
Most Medical professionals believe that what they wanted to do was simply impossible from a biological perspective due to the natural variations of blood content. It would have been like trying to determine traffic on a freeway by taking a brief glance through a tiny slit in a piece of paper.(This is why they draw so much blood for testing, to try and get a fairly representative sample.)
taking 10 such brief glances may allow for some good enough probabilistic estimate though. Upon hearing first time about Theranos in 2013 i thought that they would do something like it, i.e. statistical approach based on some data mining as they would collect large number of samples, etc. - a typical SV tech based approach. One look at Holmes' black turtleneck photo and Glassdoors reviews mostly talking about Ballwani, and i remember immediately thinking - any even minimally advanced R&D is just not possible there.
Her fake voice is a lot more indicative than the black turtleneck though.
It is far more enlightening and satisfying for those people to develop their own sensibilities, find personal ways to express them, and through their force of will and drive, imbue their own meaning into their own habits.
Could you not have replied with something along the lines of "still waiting on lab tests, saw no reason to subject patient to unnecessary finger-stick test"?
In America, it's perfectly legal to say "I'm going to make an antimatter drive; give me a million dollars." It's illegal to say "I have a working antimatter drive prototype; give me a million dollars." Holmes and Balwani did the latter.
They also made the technology very secretive. Not even their investors could have access to implementation details.
Not one that could do what they promised.
"The indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors. Specifically, the defendants claimed that Theranos developed a revolutionary and proprietary analyzer that the defendants referred to by various names, including as the TSPU, Edison, or minilab. The defendants claimed the analyzer was able to perform a full range of clinical tests using small blood samples drawn from a finger stick. The defendants also represented that the analyzer could produce results that were more accurate and reliable than those yielded by conventional methods—all at a faster speed than previously possible.
The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false. For example, allegedly, Holmes and Balwani knew that the analyzer, in truth, had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines."
https://www.justice.gov/usao-ndca/pr/theranos-founder-and-fo...
The Edison was intended to run a full panel of blood tests, both chemical and immunological assays, off a finger stick of blood. It was also intended to allow Theranos to function as its own lab.
The Minilab was intended to run a full panel of blood tests I believe off a larger venous sample, and was expected to be marketed to existing labs (at this point, Theranos had been forbidden from operating its own labs).
In its own labs, Theranos made minimal use of the Edison, which was unreliable and supported only a few tests. Rather, they're accused of taking finger-stick draws, diluting them, and then feeding them into hacked-up adapters for COTS lab machines.
So, I sort of doubt it.
Blood sugar is a relatively high percentage of your blood stream, which is why strip-based glucose monitors work.
The finger-prick-testing was always very likely to fail; the biology just doesn't work out in your favor. However, getting finger-pricks working was the entire basis of their strategy, not the "test using less blood" idea.
It's only illegal if you don't actually have one.
So, just like most VC favorite startups?
Later they happily poured lots of millions into Magic Leap.
UBeam might very well flameout but I think if you are evaluating a company for fraud potential, there’s no evidence of UBeam making up complete BS to raise investments. In that case, even if their tech doesn’t pan out, as long as they weren’t massively deceiving investors, it would be a failed startup, not a fraudulent one. They are not the same thing.
Yeah, I was referring to profitability, which, for a for profit company (and one that wants to attract investments), should be part of the core vision, and without which there's no product (just something akin to "selling" $10 bills for $5).
That said, wouldn't all the "pivoting" companies prove that nobody there knew how to achieve their core product vision?
It crossed over into serious fraud when they stopped taking money to develop an approach, and started taking money on the pretence that they had developed an approach, when in fact they were just lying and performing the tests on commercial equipment they'd quietly bought elsewhere and hacked to use smaller samples (with resulting extremely poor accuracy).
And then they really fucked up when they doubled-down on this fraud by showing FDA inspectors a sham microfluidics lab instead of the actual working lab that just used standard equipment they'd quietly bought through various shells.
She clearly had some knowledge and strategy about the technology and likely fully intended for it to be successful, but responded to delays and difficulties with deception rather than just admitting it was harder than they expected.
"If we just get over this hurdle, we'll revolutionize medical testing and become legends." Not unlike Ponzi schemes which start out as legitimate investment ventures, do very poorly, and then just make up the return numbers. Martin Shkreli arguably pulled that fraud off "successfully" and actually got over the hurdle, but of course it came back to bite him.
However, they could not get the technology to work and abandoned several development paths in favour of a less ambitious approach that, among other things, involved doing blood analysis the old-fashioned way (manually in the lab), and only pretending to be using new tech they'd invented. They knew it didn't work, but kept selling it anyway, which is where it went from just faking it to outright fraud.
Most of their money was raised after they failed to develop their blood analysis technology, but to the investors, to the press and to their clients (such as Walgreens), they were still claiming to be using their proprietary technology [1].
[1] http://m.nautil.us/issue/60/searches/does-theranos-mark-the-...
I'm playing Devil's advocate and not justifying or defending their fraud and the physical harm they caused, but if we were to look at Holmes' intentions, I'm suspecting it was something like "we just need to do this for a few months/years until our technology works", rather than "let's just run this scam forever and get rich". As for how close they actually were to developing that technology (and assuming most of their talent didn't leave) or if it was even possible for them, who knows. And of course, regardless, they still intended to commit fraud and should pay the price.
My understanding is reddit did this at the very start of the site's existence and stopped pretty early. They probably would've died quickly if they didn't seed some content.
Europe doesn't reward winners. So Europeans move to the US for their startups.
Do you know Europe is the largest buyer of the US securities? They surely feel compelled enough to benefit from the business scene in the US.
Reddit is an interesting case, but I'd say there's a categorical difference between faking that you are able to do something you can't (Theranos) and pre-filling a functioning site with content (I assume that's what you are referring to?).
It's especially relevant if the difference actually matters for whom you are tricking: If the results had been accurate (which from what I understand they weren't) and absent any other specific claims of superiority Theranos end-users wouldn't care about what tech they use, but for investors relying on claims that they can do something others can't to establish their value it obviously does matter.
Which in the case of reddit I guess makes the question: does it make a material difference for users if the site they enjoy is entirely fed by an organic community, or is the most important thing that the site is enjoyable regardless of origin? I guess you could argue that faking a community is also "faking that you are able to do something you can't".
(Not making any real life connections here, I am absolutely not qualified to call anyone medical terms, but in the subthead about clinical psychopathy it seemed important to point out.)
You can't really fake science.
This may have been faking too hard in a place where experimentation, or R&D, yielded nothing usable.
What does this mean? Thanks :)
https://www.amazon.com/Blue-Ocean-Strategy-Uncontested-Compe...
So the original genesis of Theranos probably wasn't fraudulent, but when things didn't work out and they started faking it instead, that was outright fraud.
Not what I would call experience with microfluidics.
But the project she sold him on was based on her idea for some kind of wearable. From reading interviews I got the idea that he was more impressed with the wireless, wearable aspect (technologies he didn't have experience with presumably).
Point of interest: That director was Avie Tevanian, who designed Mach, NextStep, and OSX. Holmes wanted him on the board because of his connection to Jobs. He resigned from the Theranos board over this incident. (Carreyrou's book discusses this.)
Basically there were three iterations of the technology. The first one used microfluidics, which are basically the repurposing of the micro-fabrication techniques that the computer chip industry pioneered to move tiny volumes of liquid. Theranos tried to work on that for several years before Holmes lost patience in late fall 2007 and abandoned it. At that point she pivoted to what was essentially a converted glue-dispensing robot. One of the engineers ordered a glue-dispensing robot from a company called Fisnar in New Jersey, studied its components and rebuilt a smaller version of it. It was a robotic arm on a gantry with three degrees of motion and a pipette stuck to its end, and it replicated what the scientist does at the bench. That ended up being called the Edison and it could do only one class of test, known as immunoassays. It was also error-prone. The third iteration of the technology was the miniLab, which Holmes wanted to be able to do more than just immunoassays. The miniLab didn’t invent any new techniques to test blood with. It miniaturized existing laboratory instruments and packed them into one box. By the time Theranos went live with its tests, the miniLab was a malfunctioning prototype.
The interview also explains how Holmes was able to attract so many influential people on her board. The short answer is her Jobs-like "reality distortion field" -- she was exceedingly good at convincing non-scientists that their science worked.
[1] http://m.nautil.us/issue/60/searches/does-theranos-mark-the-...
Considering this and the lack of substance behind her claims, I would personally bet money that she is a clinical psychopath.
The most disturbing thing I have ever observed about human beings is our tendency to follow psychopaths. Psychopaths seem to have this gravity around them and people just fall into line. I've observed some spectacular examples. A psychopath can say the most questionable or even absurd things and people will just believe, whereas people will be skeptical of even very sane things that come out of the mouths of non-psychopaths. It's as if clinical psychopaths have some special instinctive ability to generate body language, vocal cues, and linguistic patterns that manipulate others very effectively.
I am not claiming that everyone with a "reality distortion field" must be a psychopath, but I've definitely observed a positive correlation.
I'd bet if you dug into the research what you'd find is the research really shows that psychologists who study such things do not have the character/psychology of those who become CEOs, not that they are psychopaths.
That is, a psychological or culturally acquired trait should not be used against an individual without a proof that it actually affects his behavior. You are in essence denying that the person has any agency and it's utterly incapable of learning and acting on society's moral code, which I bet is false for the vast majority of people with sociopathic tendencies.
https://www.nytimes.com/2016/04/27/opinion/dont-blame-silico...
As far as I can tell, "leader types" are far more vulnerable to confident people than the rest of us because of this.
In practice, I think this means falling back on a limited sort of finance understanding and some generic notions of top-down business process. There's not much there, so they make up for it by leaning hard into their human instincts and skills.
Unfortunately, that leads to many problems, including over-trusting people who present well and seem confident.
But I think the key is the difference between sociopaths and psychopaths. Sociopaths are usually really good at using their charisma to move up:
>Psychopaths are dangerous. They’re violent and cruel, and oftentimes downright sinister. They show no remorse for their actions, usually because of a lesion on a part of their brain responsible for fear and judgment, known as the amygdala. Psychopaths commit crimes in cold blood. They crave control and impulsivity, possess a predatory instinct, and attack proactively rather than as a reaction to confrontation: A 2002 study found that 93.3 percent of the psychopathic homicides were instrumental in nature (meaning they were more or less planned), compared with 48.4 percent of the homicides by people who weren’t psychopaths.
>Sociopaths are a different breed. They, too, may suffer from their mental illness as a result of lesioned brain regions. Upbringing may also play a larger role in a child becoming a sociopath versus those that are diagnosed as psychopaths, or the slide into dementia on the other end of the spectrum. Sociopathic behavior is manifested as conniving and deceitful, despite an outward appearance of trustworthiness or sincerity. Sociopaths are often pathological liars. They are manipulative and lack the ability to judge the morality of a situation, but not because they lack a moral compass; rather, their existing moral compass is greatly (yet not always dangerously) skewed. Pemment, for one, says this could point to both a social and neurological component.
source:reddit
The classic example is Niko Tinbergen, who created models of fish that were rounder and redder than the real fish, who would ignore other real fish and focus on the models. The human ability to refine things produces a lot of good examples. Like how refined sugar influences us so much that it ends up in most processed foods. Or how refining the coca leaf produces addicts.
My theory with sociopaths is that giving no fucks what others think allows them to be unnaturally confident. Since we often evaluate others by how confident they are, we are easily taken in by people with supernormal confidence. That gives us the reality distortion field (as social primates, our main reality is social) and "drinking the kool-aid". Which is a metaphor Jobs used for how he wanted people to react to the Mac, but the metaphor is about a cult whose charismatic leaders led them to mass suicide. [1]
[1] https://en.wikipedia.org/wiki/Jonestown#Deaths_in_Jonestown
I think this may also offer some explanation for the appeal of the utterly absurd, like flat Earth or galactic emperor Xenu. Its supernormally ridiculous, which invokes a sense of fascination.
In any case if this is true I think this effect is being weaponized today to an unprecedented degree.
Also as a side note, within Scientology you don't actually learn about the Xenu shit until you're way too deep, financially and/or time commitment-wise, to pull out.
It seems they’ve taken a page out of Masonry or mystery religions. Only higher level “initiates” receive the real wisdom.
The question is, are the high level initiates plain psychopaths?
Or are they just addicted to the free pussy (or dick), drugs, and money that comes with forcing others to join the cult?
Nice. Although I am beginning to suspect that everything is to a greater or lesser degree a Ponzi Scheme in the long run due to thermodynamics. ;-)
1a) It's a better show of commitment to the group if you are willing to stand up and say the absurd on behalf of the group. It's saying that membership in the group matters more to you than the potential loss of face. You could expect to be able to rely on such a person to be loyal to the group.
1b) It's also a better show of group commitment if someone is motivated enough to try to convince themselves of something very difficult to believe.
2) Groups espousing weird beliefs will face ostracism, and that will bind them more to each other. They will spend more time with each other away from outsiders, developing their belief system further with even less sanity checking from the outside.
An actual universe doesn't pack well into the 3 pounds of meat we use for thinking. A system of thought that lets us discard most natural ambiguity and nuance would be unnaturally comfortable. I think this is true both for obvious fundamentalism (e.g., Bible thumpers) and for single-explanation frameworks of thought. Freudianism, Marxism, and capitalism all have groups that are effectively fundamentalist adherents. And I think there's a species of Bitcoin fanatic that is also effectively fundamentalist.
I guess I shouldn't be surprised that this appears to be on the rise at the same time the Internet has brought us into contact with all the information and all the people.
Google is showing me nothing for this. Do you have a citation?
Original source is listed as this book from Baylor University Press: http://www.baylorpress.com/Book/382/Appletopia.html
Those that claim, "Not me!", are usually the last to raise their hand.
I have seen so many people con other people legally, and 1 out of a 100-1000 will even bring up the immoral/unethical behavior.
I walked out of Chiropractic School in the ninties after realizing it's a scam. The Subluxation is exceptionally rare.
I knew, along with my classmates that it was all a big scam, but we were invested.
A New Yorker, and myself were the only ones raising our hands when the instructor would say something rediculious like, "Chiropractic has over 17 different upper cervicsl techniques, and they all work equally well." Yea--Placbo Effect was a bad word.
In all honesty, it took a nervous breakdown to completely see the light.
I knew all along it was a sham, but figured I would be different Chiropractor. I would use the non-force techniques on patients, and refer if anyone didn't respond to my harmless placebo treatments.
In the end, I just walked, but took away something about human nature. Career, and money will cause most of you to look the other way.
As someone who has spent a lot of time around startups, the amount of employee turnover was one of the craziest -- indicative in hindsight -- things in John Carreyrou's extremely well-reported book, "Bad Blood." Most startup boards would have looked at that level of employee turnover and realized that there was something much worse going on than a young founder without much management experience doing a poor job at hiring and retention. But the board apparently didn't get very much information about the actual operation of company, didn't push for more, and didn't question or dig into what they did get.
I'm willing to forgive quite a bit of "fake it till you make it" flim-flam, but anybody who uses such strong-arm tactics deserves having the book thrown at them.
https://news.ycombinator.com/item?id=6349808
This confuses a lot of people (not saying you are one of them), but this is really common in intelligent non-experts. People vastly overestimate how intelligent they are when they place value on their intelligence; in other words, they like thinking they are smart.
When they prize their own intelligence, they have false confidence about areas they have zero expertise in, purely because they feel they can figure it out.
So all it takes is someone with sociopathic tendencies and who has extreme confidence with a good CV, and bam, they're willing to go to the mat for that person. Holmes is one example but certainly not the only one.
I would agree with his statement then. I have never met a brilliant talker who could actually do anything.
Many top mathematicians appear clumsy in presentations to the uneducated listener. It is a great tragedy that fluent talking (these days aided by teleprompter) passes for intelligence.
The antidote to this effect: pick any object around you, and set out to make it yourself from scratch. Or just set out to make the precursors. An object as prosaic as say, a window. A lot of people who suffer from this effect dismissively wave away such a challenge, saying in more words that it's beneath them to attempt because it is so pedestrian, or of course they could do it, but they don't have the time to.
Those I know who are scary smart, are the ones who will more frequently pick up the challenge, and boy, are they fast at picking up what they need to know to meet the challenge.
Me, I just feel dumb every day, but have a heck of a lot of fun along the way. I also stick to far less lofty aims. A few months ago I had never owned a chainsaw before, and a few weeks ago I processed half a cord of firewood with a chainsaw, maul, wedge and sledgehammer into smaller chunks for my smoker. I respect the hell out of the woodsmen who walk into the mountain forest for a full day of work with nary but a milk crate of supplies and those machines, and the experience makes me appreciate just how vast an efficieny improvement they represent over hand sawing.
I think about this alot, starting from absolutely nothing I doubt I could even make a nail, let alone a screw, let alone a nut and bolt. I have no idea what iron ore looks like in the wild or where to find it. I could probably make charcoal and a furnace... if I had the tools, which I wouldn’t. It’s quite humbling.
I didn't want to get all management-consultant-preachy earlier, but you touched upon why I persistently perform that exercise. I believe there is a very valuable leadership lesson imparted by continuously performing that exercise first-hand. Too often leadership devolves into management, especially when people lose sight of just how fractally difficult many human endeavors are. The humility helps teach me perspective on problems and people.
That Australian aboriginal might live a dramatically different life than "developed world" citizens, but there is no way I can be convinced that on average, they aren't as smart.
Even if they don't, intelligence does not replace domain knowledge.
I wonder how this squares with the Dunning-Kruger effect. Are domain-stupid generally intelligent people more susceptible than domain-stupid generally stupid people if they are equally cocky?
There's salesmanship and then there's lying. It might feel like a thin line but I think it's important not to conflate the two. Criminal behavior is not just "reality distortion".
Holmes was close family friends with George Schultz, and that allowed her to do two things. First, get a bunch of military and government guys on the board. And second, sell to the military.
That was Theranos’ real ace in the hole. Holmes knew top military brass and they were going to give her military contracts to test soldiers’ blood. We don’t know what she was telling investors, exactly, but that seems like a real source of revenue investors would care about.
Carreyrou describes how it was a mid level DoD employee that screwed up the plan - he looked at the data and scuttled the contract even though the generals wanted to award it to Theranos. Hat tip to hard working, honest govt employees.
Board and Schultz details: https://www.google.com/amp/s/www.forbes.com/sites/hershshefr...
I say 90% of VC back companies are blowing smoke to the endpoint investor, public and consumer. 100% of those companies have miracle products that scale forever and work... In 1 specific ise case: the demo booth. They oversell. I see 2 out of 10 startups bring a viable product to the global 2000 table.
Spacex: we can go to Mars, but haven't even launched a Mars rocket. Google: AI is here, and the product? Waymo, logs millions of miles, is just sunny conditions?
The common strategy: lie(aka promise), sell the future, hopefully you get the solution and hit time to market. Holmes was following the same playbook, BUT just gave up, and that's got her investors and comsumers furious. If she apologized, AND stuck with it, investors would still back her, and the public flac would have subsided....VCs were sold on her future.
On the opposite end, aside from real mistakes is a company like Apple: they sell the future and deliver.
I don't think that is their literal message and goal. SpaceX's real mission is to innovate space travel which they've been capable of doing and have demonstrated with clear achievements.
SpaceX's revenue is in the billions and is very close to profitable. It most likely would be profitable if it wasn't constantly spending money to expand like Amazon in its early years.
And of the various self-driving car efforts, Waymo seems one of the most careful, both in their engineering and PR. I don't recall them making any claims they can't back up, but I may have missed some.
The difference between saying "we expect to have X working within a year" and "we have had X for a year" is that if X doesn't work out, the second sentence is a crime of fraud. And Holmes was on the wrong end of this difference.
They're not prosecuting for the broken hopes of 2004-2006 investors (who were sold a future that didn't materialize, oh well), they're prosecuting for misleading the investors of, say, 2014 by lying about the achievements of their first 10 years.
In the short-term, his life was a nightmare and Holmes and Balwani held all the cards, but in the long-term he'll probably be successful and considered honorable while Holmes and Balwani will be disgraced at best and convicted felons at worst.
(Note that doesn't mention his retirement, I can't find a link for that, I read it in Carreyrou's book)
The one really weird thing i noticed about her is she never blinks. Watch her give talks and it is like a robot never blinking
Back in 2015, it was the same story they told investors: We can do an expensive blood test for a fraction of the cost in a fraction of the time with better accuracy.
Unfortunately, it sounds like they defrauded investors with false claims, which is why they were able to get so much funding without a real, viable product.
[1] https://www.pointofcare.abbott/us/en/offerings/istat/istat-h...
I can hardly put it down, I highly recommend it.
I think it's worth pausing to consider: when's the last time you heard of a startup CEO/CTO team getting indicted for wire fraud? I'm not saying it doesn't happen, and I have no position on whether Holmes and Balwani are guilty of these or other charges.
But I do have to wonder whether the degree of attention from the DOJ has more to do with avenging the reputational and possibly financial losses of those same board members, than garden-variety "the DOJ prosecutes fraud".
In which case, there'd be a civics lesson as well. Live by .gov, die by .gov.
(Edit to clarify, lest I be accused of insufficient virtue signaling: fraud is bad, don't do it, if they committed fraud they should be punished, etc etc.)
[1] e.g.https://www.bizjournals.com/sanjose/news/2018/03/14/theranos...
The response to evidence against a conspiracy theory is not to flip the conspiracy theory.
If you defraud investors out of billions of dollars and lie to Medicare and Streisand effect the Wall Street Journal when it investigates you, you're going to get busted.
One pled guilty a few months ago: https://news.ycombinator.com/item?id=16313612
Or these two are convenient patsies..
Did they really lose money?
Theranos had huge contracts for blood testing at major national pharmacy chains for a year or two, and if you follow the timeline, there's a ton of related activity requiring well connected people which seems to indicate rushing things out the door to make sure they could get these contracts..
AFAIK not nearly all the information has been discovered or presented, and much of this never will.
How about the 'convenient' intervention of mattis into military trials of the technology? Just because it sounds like tinfoil hat doesn't mean it's not true (see also: snowden)
One chapter talks about Mattis, including various emails that were sent. He comes across as genuinely wanting to do the best thing for his men and hoping that Theranos could save lives in the field. There never were any field tests, because Mattis listened to his underlings when they said it would need to get FDA approval first. They then offered to let Theranos test random blood samples to validate the results but Theranos never took them up on that offer.
The US justice system sucks, let's not endow it with special "uniqueness". However, I am happy that corporate criminals are facing some penalties for their activities that could harm the public.
EDIT: Also, just because after waiting years and years, we see one or two criminal executives go through the Justice system we shouldn't get too excited. Companies lie and cheat the public all day, that's how they get so rich. The system has to produce one or two examples of something approximating justice every now and again basically to forestall revolution. The poor go to jail, the rich play games. A handful of prosecutions at the top doesn't change that dynamic.
The rule of law, where elites fear the law and not a ruler, is in the minority today and across human history. I certainly think it’s something to celebrate.
Here are a few other countries where powerful people have been arrested in recent history:
- Saudi Arabia (https://www.cnn.com/2017/11/05/middleeast/saudi-arabia-anti-...)
- Philippines (http://www.abc.net.au/news/2014-06-20/philippines-corruption...)
- Argentina (https://www.nytimes.com/2018/01/08/world/americas/argentina-...)
- China (http://www.scmp.com/week-asia/opinion/article/2144627/secret...)
- Brazil (https://www.nytimes.com/2017/07/12/world/americas/brazil-lul...)
- Italy (https://www.nytimes.com/2017/07/12/world/americas/brazil-lul...)
- Australia (https://en.wikipedia.org/wiki/List_of_Australian_politicians...)
- Japan (https://www.japantimes.co.jp/news/2016/05/21/national/media-...)
For those interested, here is an interesting essay that touches on some of those issues https://www.lawfareblog.com/donald-trumps-pardon-power-and-s...
You mean, the kind of justice that Richard Nixon faced?
I feel that any criminal president that falls short of being a baby-eating monster will get a pardon, instead of a jumpsuit.
The problems manifest when the innocent get trapped in its path.
Good to see today that a few folks who deserved justice got some. It feels like it has been a long time since rich and powerful people were in its sights.
FBI Employee: “How did the (witness) go?”
Agent 1: “Awesome. Lied his ass off… Ridic(ulous).”
FBI Employee: “Would be funny if he was the only guy charged in this deal.”
Agent 1: “I know…. Even if he said the truth and didn’t have a clearance when handling the secure fax – ain’t no one gonna do (bleep).”
Truly a beacon of truth for all American's to follow
http://www.bostonherald.com/news/columnists/howie_carr/2018/...
[0] http://fortune.com/2018/05/11/tim-draper-theranos-elizabeth-...
http://www.latimes.com/politics/la-pol-ca-california-split-t...
And supporting Holmes for that long and even now looks really bad and is very difficult to justify.
Holmes is a ruthless, despicable humnan being. Cheating people out of money is one thing. Cheating people of their health, denying when caught for years and years is on a complete another level. And what she did to the poor whistleblower? Almost ruined his life and went a few rings below murder to her chief scientist. Not to mention the mafia style shakedown of John C, the reporter who broke the story.
If someone knows all that about a person, and still glowingly praises them, in my opinion they are NOT ethical and not a good person.
See also: Thiel, the Mercer's, the Koch's, Sheldon Adelson, the Illinois Democratic political machine, the Harry Reid Nevada political machine, etc.
(There's still a formidable political party to be sure and a bit of graft wouldn't surprise me, but it seems almost sarcastic to compare that to eg the New Deal political machine, or the Chicago machine of ol'.)
Rahm Emanuel, Michael Madigan, and Lisa Madigan come to mind.
While people sometimes use "political machine" to mean "a functioning, robust party" nowadays, a "political machine" refers to a specific system of patronage, where campaigning for a politician or political party is rewarded with government jobs, and anyone supporting the opposing party was rewarded with unemployment.
At the height of the Chicago political machine (and New York, and ...) tens of thousands of city jobs were used to reward campaign workers, not just big donors and campaign managers but the people who knocked on doors or district leaders who ensured good turnout in their districts. At the height of the New Deal political machine, the WPA was used to do the same.
Rahm Emanuel, meanwhile, has "good relations" with Chicago businessmen and receives giant campaign donations; Michael Madigan tried to get jobs for a half dozen people and was shutdown hard.
Wow.
[0] https://www.justice.gov/file/1072521/download
Being familiar with the process, it looks like they're out on supervised release. Non-custody. No point in putting a warrant out for someone when they're at the courthouse to be arraigned.
"Warrant" could just mean they came in on a warrant vs. a summons.
More important is the top of the form: "Defendant is NOT in custody".
https://www.stitcher.com/podcast/this-week-in-startups-audio...
WHY DO THIS. Each count of wire fraud is 20 years in prison [1]. If 9 counts are proven you are looking at a 180 years in prison. (life sentence). You are better off doing 2nd degree murder 3 times - at least it is a challenge to prove. Proving wire fraud sounds pretty simple - they just read a bunch of emails and text messages in court. Everyone will turn nasty on each other due to the harsh penalties. Wire fraud = bad times. Just be honest with your investors.
[1] https://www.criminaldefenselawyer.com/resources/wire-fraud.h...
They don't think they will get caught. For a live example, see HN's cryptocurrency threads. A common theme is talk about faking KYC or laundering money or how their scam is too small to garner federal attention.
First, 20 years is the maximum guideline sentence available for wire fraud. The Federal Sentencing Guidelines has a points-like system (with points added for various attributes of the crime, like whether the accused took steps to conceal their crime, or crossed some dollar threshold) that heavily counts the prior criminal history of the accused. This is an egregious wire fraud case, but it's still a little unlikely that any one count will see the maximum sentence applied.
More importantly, the norm in federal sentencing is for similar charges to group, and for the longest of those counts to set the sentence. It is not the norm to serve (here) each of the "nine counts" consecutively.
Google [whale sushi sentence] for more details.
https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc...
This is ordinarily when hard-core criminals are taken into custody. If their experience was like mine, they had to show up in front of a magistrate with their lawyers, plead not guilty, then go to a dungeon for about 30 minutes while they get handcuffed, fingerprinted, mugshotted, and DNA-swabbed. Then, off they go until trial. It's basically like being free, but you have to stay out of trouble and report all contacts with law enforcement.
Being rich (or from money), they won't have to worry about federal defenders or CJA representation, which wouldn't be near as bad as dealing with a state-funded public defender. There's a small chance they'll have to go this route anyway, since the government can snatch the money in dispute and block you from spending your ill-gotten gains on high-priced legal representation.
Don't let the "sticker price" fool you. They're not going to have to serve consecutive 20-year terms for what they're accused of, even if they take it to trial and get found guilty.
They will probably get their first plea offers in about a year. Most people take the plea. In the event they refuse to plead guilty, trial will probably take about 2-3 years from today.
Holmes will be offered, I'm guessing, about 6-9 months and a joint-and-several "money judgment" (restitution + forfeiture). Balwani, about 5 years and a joint-and-several "money judgment". This may be a package deal too, so Holmes may not be able to take it if Balwani won't. Why the discrepancy? The 28th amendment hasn't been ratified yet.
Before my experience with this world, I would have been eager to join in the collective bloodlust, with the pitchfork-and-torch crowd clamoring for these overprivileged defendants to sit through a trial and rot in prison. Take it from me: I wouldn't put my worst enemy through even just the trial.
Doesn't have to be the worst thing in the world for you to not wish it on someone.
I am in a weekly support group for people with the same offense category as me, sometimes crimes not as bad as mine. Most of the members in this group are working class - hourly jobs, no savings, no emergency funds, government lawyers. They mostly had to serve time, had to register as offenders, have strict stipulations.
Meanwhile I was able to borrow money from my parents, got a good lawyer, and all I have to do is check in with probation once a month for a few years.
It rings true to me that, in general, the average person would have much more compassion for 'bad' people in 'bad' situations if they could live a day in their shoes.
Eerily similar experience, down to the charges and the 11 counts.
I don't disagree, but the average person on a jury just does what the lady in the skirtsuit tells them to do so they can get out of there. Most people you want on a jury throw away their summons with zero risk to the practice.
"Mr. Dufresne, you killed your wife and her lover, I don't feel like you should have gone to Shawshank."
NB: Mods, not sure if this is allowed, feel free to remove if not. Information was gathered using information freely offered by HN profile and LinkedIn.
It's basically like being free, but you have to stay out of trouble and report all contacts with law enforcement.
There's a small chance they'll have to go this route anyway, since the government can snatch the money
They're not going to have to serve consecutive 20-year terms for what they're accused of
Holmes will be offered, I'm guessing, about 6-9 months and a joint-and-several "money judgment" (restitution + forfeiture). Balwani, about 5 years and a joint-and-several "money judgment".
Take it from me: I wouldn't put my worst enemy through even just the trial.
Quite an interesting contrast between what privileged rich people have to worry about vs poor. Nearly every one of those points are solely because you have money, not merit-based. I guess this is when the world proves what really matters.
This is speculation. Let’s wait to see what is handed down. It was common thought on these forums just weeks ago that money and connections would buy Holmes out of an indictment.
look, this society will fall apart if its only the poor who will pay the price for flouting the law.
If Homes and Balwani had confined their predations to the general public, they'd still be free and wealthy. It's only because they also swindled some plutocrats that they're going to have to return most of their plunder.
Both of these people fully deserve what’s coming to them. They lied to investors, they lied again to investors to keep the company afoalt, and above all they seriously jepordized medical results. It’s one thing to challenge status quo or even current regulations, a la Uber.
To mess with people’s health or their perception of it is completely wrong. We should not minimize the situation. Again, I cannot tell your tone. I’ve been following this for a while and it was obvious what would happen from the moment the whistle was blown.
I feel like you're playing judge, jury, and executioner. Leave the pitchforks and torches for the judicial system in this country.
What if they get found not guilty, or more likely (but still unlikely) the feds quietly drop the case?
The new infographic is a nice touch.
Thanks for the backhanded compliment on the infographic; I wouldn't mind your following me around if you got your facts right.
What do you mean with that?
As far as I can tell, a 28th amendment hasn't even been proposed, although there is an urban legend about it that circulates in chain mails.
However...even that fantasy amendment is about equal treatment of citizens and members of congress...not sure how that would apply. The closest I can see is that Holmes's mother was a congressional staffer, but that's (a) not her, but her mother and (b) not an actual member of congress and (c) the laws aren't actually different here(?)
Puzzled.
As soon as the right wing of America realizes that men are sometimes discriminated against, we won't be waiting long until one more state legislature puts it over.
But yes, referring to a proposed amendment as "the 28th amendment" is very confusing, since there will always be multiple proposed amendments at any given point in time.
> Why the discrepancy? The 28th amendment hasn't been ratified yet.
I predict Holmes gets at least as much time as Balwani, if not more. Why? Many of the most compelling causal explanations for the (very real and concerning) gender sentencing gap aren't applicable to this case.
(On a related note, I had an exchange about gender gaps in sentencing with another HN user 3 months ago who was complaining how unfair it was that Holmes "is spending exactly zero days in prison" and got off with "a slap in the wrist" compared to Shkreli [1].)
[1] https://news.ycombinator.com/item?id=16588351
It's actually pretty unlikely that Holmes and Balwani will lose all of their fancy properties, because that sort of scene also upsets the plutocrats. They'll just have to give back most of the millions they've squirreled away.
The fact is that we don't know what actually happened, only what the government and media want us to know, even if it isn't so. They look guilty as hell, but so do innocent people.
Trial by jury is better than trial by media, so I'll take the high road and reserve my judgment until then.
Anyway, trial by jury is not great. If one can avoid it by appealing to the media, one definitely should do that.
Highly recommended to everyone.
[1] https://player.fm/series/series-2249929/criminal-justice-par...
https://www.youtube.com/watch?v=eqYHwI87cDQ
Edit: and I don't mean in a sexist way. I suspect she will be ruthless in getting off the hook.
:)
[1] https://www.imdb.com/title/tt5795144/
https://outline.com/dUwMC4
Basically, Elizabeth Holmes wanted to be a billionaire and restore her family's fortune. She started a medical tech company but didn't include any scientists or doctors on her board. Demos and employment were tightly controlled by NDA, and structured so as few people as possible knew about the scam. Somewhere between 1-8M (10-100%) of blood tests Theranos performed on hacked machines from other companies are suspect or outright wrong. Her company rode the "unicorn" wave at just the right time to get lots of funding and publicity, even though it has been operating since 2006.
One of them even made 8 billion USD completely disappear from the "Iraq Reconstruction Fund".
THAT'S why whataboutism is important. Enforcement bias.
When the black man in New Orleans is thrown in jail for smoking weed, but the black/white/asian male in Iowa goes unprosecuted, how much of a crime is the crime really?
You either need 100% prosecution or 0%. Murder is murder, fraud is fraud, isn't it?
I don't know about your country, but here usually all the higher up's in the chain are on the payroll, so you are safe, even if shit hits the fan. That is one of the nice thing about stealing from government. Because you are not actually stealing from the government, but instead, you are just helping the government steal from the people, a part of which is rewarded to you.