Elizabeth Holmes Possible Sentence: No Slap On The Wrist

The sentencing of Elizabeth Holmes, the former CEO of Theranos, a blood-testing company in Silicon Valley, is set for Sep 26 2022 at 130 pm, Judge Davila, San Jose California Federal Court.

On January 3, 2022, Holmes was convicted of one count of conspiracy to defraud investors, and 3 counts of wire fraud, Each count carries up to 20 years in prison, a $250,000 fine, 3 years supervised release by probation, and likely victim (investor) restitution in the amount of $144 million dollars.

Why the sentencing “delay”? Here are 2 reasons….

Post-trial motions: Defendants, typically, file motions after the trial to challenge the verdict and to preserve issues for appeal. The judge has set a motions hearing for June 16, 2022 at 9 am regarding 3 potential motions raised by the Defense: Rule 29 motion for judgment of acquittal (substantial evidence of guilt or not), Rule 33 motion for a new trial (interest of justice requires vacate verdict) and Rule 34 motion to arrest of judgment (substantial defect in indictment i.e. indictment does not include all elements or court lacks jurisdiction, etc. this motion is seldom used and rarely granted). We will have a better idea of the defenses’ basis/arguments and the prosecutions response when their briefs are filed/due March 4 and April 29th, respectively, with Defenses reply brief due May 27.

Balwani’s Trial upcoming, reportedly, mid-March? (judge’s calendar indicates Feb 15th start for trial)
There may be evidence presented in Balwanis case that may impact Holmes sentencing as they are alleged co-conspirators in a scheme to defraud investors, patients and commit wire fraud.  

What’s the potential sentence for Holmes?

Federal sentencing is based upon sentencing guidelines established in the United States Sentencing Commission Guidelines Manual (aka “sentencing guidelines”). The guidelines establish sentencing ranges for crimes as an attempt to establish uniformity/consistency of sentencing across the federal courts. As of 2005, the guidelines are advisory not mandatory, and the sentence is up to the trial judge. 

So, assuming I did the math correctly, Holmes sentencing range is 108 months (offense level 31) to 210 months (offense level 35), that’s potentially 9 to 17.5 years in prison. Fraud is base offense level 7 plus 24-28 levels depending on aggravating/mitigating factors like the amount of loss, abuse of position of trust, aggravating/leadership role, cooperating with government, etc. Here’s the link to the guidelines USSC Guidelines

Sentencing time will be increased incrementally due to conviction on multiple counts rather than consecutive sentences. 

Although sentencing is up to Judge Davila, the sentence also rests in the hands of Holmes. Right now, she can take actions to reduce/mitigate her prison time. Specifically, here are 3 ways…

1. Flip on Balwani and cooperate with the government to help them with their case against Balwani,
2. Waive her appeal upon an agreement with the prosecution to recommend a shorter sentence,  
3. Accept responsibility for crimes 

Btw, her new mom status or even a pregnancy is not technically a mitigating factor. Holmes is also not technically eligible for probation or a mix of home detention and prison time due to her high offense level.

Fyi, based on 3 similar fraud cases at or near Holmes offense level, Judge Davila sentenced the fraudsters to 97, 108, and 140 months. Holmes will likely face a longer sentence as the amount of loss in her case, approximately 144M far exceeds the 7 million, 9.9 million and 48 million, respectively, defrauded by other defendants. However, based upon a review of 8 recent fraud cases sentenced by Judge Davila, the sentences were 30% less on average, than the sentencing range in the sentencing guidelines. In short, assuming Holmes loses her appeal, she could face a prison sentence of 76 months (108 x 30% reduction) to 147 months (210 x 30% reduction) or 6.3 to 12.25 years in prison. Keep in mind, this is just a sentencing estimate as there are many moving parts in sentencing including the sentencing recommendations by the probation department, the government and information yet unknown to be discovered in the pre-sentence report, at the sentencing hearing in September and in Balwani’s trial.

Contrary to some public sentiment, Holmes sentence will not be a slap on the wrist. Additionally, as she faces a longer sentence, she will also likely await the outcome of her appeal in prison rather than out on bond. Her defense team will undoubtedly pursue all possible avenues to minimize her sentence.

And….lastly, since Holmes has been convicted, she will be required to forfeit any assets traceable to the fraud proceeeds including any commingled assets. Curious, what property will secure her 500k bond? 

Simply, my opinion, what say you?

Available for Legal Analyst services including media interviews, trial/legal commentary, or inquiries.

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Elizabeth Holmes Trial: Jury Deliberation Time May Favor Defense

It’s Monday December 27, 2021 Day 4 of jury deliberations. Twenty-five hours have passed and the jury in the USA v. Elizabeth Holmes trial is still deliberating over a verdict.

What’s going on?

Like most jurors, they are diligently and methodically going over the evidence, the jury instructions and the verdict forms. My first clue…they asked to take the jury instructions home on day 2 of deliberations and day 3 they asked to re-hear the investor call between Holmes and investors, specifically, as to count 5 of the indictment, the $4.8M investment from Bryan Tolbert. Did she make false statements to obtain investor money, otherwise, known as, wire fraud?

My guess, they are going thru the counts in order…and, 11 counts takes time. And, they may have set aside the 2 conspiracy counts for last. Especially, in this case, if they find that Balwani may have controlled Holmes, as alleged by Holmes, the jury may find that she was unable to voluntarily agree to conspire or defraud. Moreover, jurors can get confused too or delayed initially as to the elements or the “object” of a conspiracy.

Keep in mind, the jury has heard from 32 witnesses including 7 days of testimony from Holmes and many exhibits from audio clips of Holmes speaking to investors, Holmes interviews on Mad Money and the Today Show, powerpoint presentation materials, lab reports, numerous emails and texts to financial spreadsheets.

Patience, my guess, we will likely get a verdict this week. If we don’t, time favors the defense. Typically, the longer a jury is out (in deliberation) or the more jury questions asked, the more likely it favors Holmes with an acquittal or a compromised verdict, guilty on some counts and not guilty on others.

Simply my opinion, what say you?

Elizabeth Holmes Trial: Prosecution Witness A Gift to the Defense (Read Eisenman’s email)

Today, in the Elizabeth Holmes fraud trial, the defense may have been given a gift. Turns out, a prosecution witness, Alan Eisenman, whose testimony was necessary to prove count 3 of the indictment when he invested $99K in Theranos in 2013 relying upon the allegedly fraudulent representations of Holmes, may have just been discredited by the defense.


By Eisenman’s own written words…. in an email he sent to the prosecution team in 2018.

Read Eisenman’s entire email

Specifically, the last sentence: “You know I am a faithful part of your team, and will do all I can to help your case”.


Why do his words matter?

It goes to the credibility of a witness.

It shows, arguably, that Eisenman has a bias and/or an interest in the outcome of the trial. Either way, the defense could use Eisenman’s own words to discredit Eisenman’s entire testimony and the jury or a juror could potentially throw out Count 3 of the indictment.

Yes, a juror may always assume a witness has an interest in the outcome, but, to see the following words…”You know I am a faithful part of your team, and will do all I can to help your case” leaves little doubt as to Eisenman’s intention which shows bias and could place doubt on his testimony. Another words, did he testify truthfully or is saying whatever to incriminate Holmes because he wants her convicted for losing his money?

Even with an expected response, “I told the truth in my testimony” from Eisenman on re-direct, his email certainly colors his testimony and veracity.

Furthermore, unlike the other investors, Mr. Eisenman is the only investor so far, who has relied solely on the representations of Holmes and the claims she made (or omitted) during their quarterly phone calls. He never visited the Theranos lab, never got a blood test demo, and never saw any financials. His testimony was a clear path to Holmes culpability. While 4 of the 5 other investor counts do not appear to have a clear path to Holmes. For instance, witnesses have testified that investment decisions, including the De Voss family investment of $99,999,984 and the $5,9999.997 investment made by Daniel Mosley, were not made solely upon the representations of Holmes, but rather, also, upon the advise of their personal advisers, other investors and or the Fortune article written by Roger Parloff. If so, it could raise possible reasonable doubt to defeat those investor fraud counts.

Let’s see what happens on re-direct of Eisenman tomorrow.

Simply my opinion, what say you?

Here’s my legal analysis on the Holmes trial today on KPIX 5 CBS San Francisco.

Elizabeth Holmes Trial: Disregard For Patients Most Damaging Evidence

The most damaging evidence against Elizabeth Holmes is the testimony from the patients who received false test results. The jury has already heard from one patient about the devastating impact of receiving a false test result indicating, incorrectly, that she had a miscarriage. Two more patients will likely testify this week about the impact of receiving false tests from Holmes’ company Theranos. One patient received a false prostate cancer test result and the other a false HIV positive test result, both of which, are devastating news to anyone and their loved ones.

Yet, the resulting impact on patients lives from faulty or potentially faulty tests results from her technology does not seem to have been a concern of Elizabeth Holmes, at least from the testimony the jury has heard so far. Maybe, the defense will illustrate her concern in their case. Otherwise, I doubt the “failed startup” defense will work for the jury. When you jeopardize or gamble with people’s lives, jurors take notice, no matter how revolutionary the technology or the vision.

BTW, four of the twelve counts in the Holmes indictment relate to defrauding patients. One patient count will likely be dismissed due to exclusion of witness testimony for late discovery reasons . However, each count, if convicted, carries a maximum of 20 years in prison.

Simply my opinion, what say you?

Elizabeth Holmes Trial: Roger Parloff Fortune Story May Sink Some Investor Counts

In June 2014, Roger Parloff, a journalist, wrote a glowing cover story in Fortune praising Elizabeth Holmes and her blood-testing company Theranos. The Fortune cover story and potentially Parloff’s testimony may be a problem for the prosecution in the US v. Elizabeth Holmes felony wire fraud trial currently underway in San Jose California.


Well, if the jury finds that an investor relied upon representations made by others regarding Theranos, namely, the statements and representations made by Roger Parloff in the Fortune cover story, prior to the investor’s investment in Theranos, then, the jury may find reasonable doubt as to some of the investor fraud counts.

Another words, it could be argued that the investors relied upon and decided to invest in Theranos because of the now allegedly “materially false and fraudulent representations” made by Parloff‘s story not by Holmes. Or, in the alternative, it was the “representations” of both Holmes and Parloff’s story that induced or caused the investors to invest in Theranos. Given the testimony of investors David Mosley and Lisa Peterson who both testified that they relied upon the Fortune cover story, in addition to the claims made by Holmes, prior to investing in Theranos, counts 1, 7 and 8 of the Holmes indictment may be in jeopardy, specifically, the conspiracy to defraud investors, the $99,999,984 investment from the De Voss family per Lisa Peterson, and the $5,999,997 investment from Mosley into Theranos in October 2014, respectively.

Interestingly, it does not appear that either Mosley or Peterson sued Fortune, Parloff or Holmes for the alleged fraudulent representations. However, Parloff and Fortune, did publish a retraction to the Holmes cover story, “How Theranos Misled Me” in 2015. Prior to Parloff’s journalist career, he was a criminal litigator in Manhattan.

BTW, Parloff’s upcoming testimony in the Holmes trial may be limited subject to this Monday’s motion in limine hearing at 10 am. For example, the Fortune story, parts thereof, or Parloff’s opinion/findings may be excluded from his testimony. The Court may also revisit Magistrate Cousins ruling denying the defense’s request to release of Parloff’s notes for his cover story, presumably sought, to uncover, the exact words or statements made or not made by Holmes.

Simply my opinion, what say you?

BTW, I am providing legal analysis on the Holmes trial. Here are my interviews on CBS 5 KPIX San Francisco and CBS 5.