Welcome back to cheddar news.
Everyone disgraced Theranos founder and Ceo Elizabeth Holmes
was convicted on four counts of defrauding investors
of close to a billion dollars in what some
are calling Silicon Valley's trial of the century.
Well,
the jury found homes not guilty on four charges related to defrauding patients
and they were undecided on three more charges related to her investor activity.
While sentencing date will be set next week at a hearing for
those charges and the judge likely to declare a mistrial on those.
But after the jury deliberated for close to 50 hours, may be a while before.
We know how long Elizabeth Holmes will spend behind
bars as she is expected to appeal the verdict.
Well,
joining me now is Mark MacDougall attorney and former
federal prosecutor with the criminal division of the U.
S. Department of Justice. Mark, thank you so much for coming on the show.
A split verdict here after a long deliberation.
What do you make of where we're at right now?
Well, the trial is really part of the process.
Uh you know, it's a definitive and important part, but it's it's a it's a step.
And as you mentioned, Elizabeth Holmes has uh,
The right and they'll certainly exercise the right to take the verdict up
on appeal to the US Court of Appeals for the 9th circuit.
Uh, and uh, you know, that's that's probably a two year process.
Um You know, the judge has the discretion to allow her to remain
uh free during that period. And they often do take that, take that option.
So there's a lot yet to happen, As you mentioned, it was a split verdict,
there was an acquittal on on four counts a mistrial and hung jury on three.
Uh so it was a long trial, it was a great deal of evidence put in. Uh and this
very likely some serious issues for
Mark, from what we know, what kind of president might this set for Silicon Valley?
Of course.
Uh Theranos founder Elizabeth Holmes arguing that she did what every other
Silicon Valley startup does they hype their product and their technology.
They hope that eventually one day with big VC money they get to that point.
But that was part of her argument here.
And do you think that now changes the game for the way that some of these startups,
especially ones
are seeking and receiving a lot of funding change their own tune?
Well, that's a good question.
Uh and I think that the answer is,
is probably sure it could be expected to have some some effect.
Um I think the phrase that's used in,
in certainly Silicon Valley and in other areas where uh, you know,
entrepreneurs are active is fake it till you make it,
you know, they're selling their programs, selling their product
and you know, in this case, um you know,
perhaps that those sales efforts went too far and involve
false statements or statements that the government contended were false.
But I can't imagine it doesn't have some effect salutary effect on,
on entrepreneurs and people involved in new ventures going forward.
We're still waiting to hear on Holmes's sentencing but each count of wire
fraud does hold potentially up to 20 years in prison for each.
Again she was found guilty on four of those charges.
Mark, potentially. How long could homes spend behind bars?
Well the realistic answer is that that the 20 year maximum has
very little to do with what kind of sentence she'll receive.
That's a maximum set by Congress when they actually the statute in this case.
The wire fraud statute back in 1952.
Um What what will control sentencing or two things.
One is the most important thing is the judge's discretion and the judge is
permitted to take a wide variety of
factors into consideration formulating a sentence.
The second is the U. S. Sentencing guidelines.
Those guidelines are formulated by an
independent commission heavily populated with with judges
and individuals appointed by judges.
But it has a complex set of formula that informed the judge that
doesn't bind the judge but informs the judges to what a reasonable sentences.
So I don't think anybody would expect Elizabeth
Holmes received anything like a 20-year sentence.
It will be considerably less than that and there'll be
a number of factors that will go into it.
As I said, it's a sort of a complex
well Holmes's former boyfriend and of course close business partner,
sonny ball Joani and number two technically at the company when they
were working at Theranos together is set to go on trial here
within the next month or so.
The verdict here in the Holmes trial?
Any impact that that could have on sunny balconies trial or
when Holmes does decide to appeal.
Well when Holmes appeals is going to be
driven by the rules of appellate procedures so
that there are deadlines that the appellate court
will set as far as Belmont is concerned.
Um you know,
from the defense perspective the government has put on
its case and for want of a better term,
the defense is now seeing the movie.
So there are likely in a much improved position to prepare their defense.
Uh the government can't introduce the fact of homes conviction uh, to the jury.
Now that doesn't mean that you're gonna be able
to find 12 jurors who weren't aware of it,
but it's it's a mixed bag. And I think it gives an advantage to the defense.
It obviously, you know, empowers the government having
already obtained at least a limited conviction on the same charges
Elizabeth Holmes did make somewhat of a surprising move to some by agreeing
to actually testify over the course of several days in this trial.
That was closed to the public.
But opening herself up to cross examination
based on this decision from the jury.
Mark, do you think that that was a good decision.
Well it's difficult to have a second guess another
lawyer because you're not in his or her shoes,
but in this case.
Um, you know, as soon as somebody observing and I think it was,
it was absolutely correct decision.
The government put up a wall of
varied evidence. Uh, and she had to give her narrative.
She had to give an alternative explanation for that evidence.
I think she did that wasn't entirely successful,
but I think it was from an outside perspective, the right thing to do.
The other thing with white collar cases is um, it's it's unusual, not impossible.
It's unusual for a defendant to get an acquittal without taking the stand.
The jury wants to hear the defendant story,
wants to hear their version of what happened.
And I think she had
quickly Mark before I have to let you go anything.
You think that the US will learn in the way that it crafted this case against homes?
Well, they took a simple approach, you know,
wire fraud and wire fraud conspiracy or the, you know,
the oldest plays in the book for the government.
And I think they used it.
So I think one lesson would be, uh, you know, when you keep it simple, you,
you can make your case more directly and
more effectively compared to some cases received recently that
it's very complex.
This one was not was very direct and I think the results
reflected
all right,
Mark MacDougall attorney and former
federal prosecutor with the Criminal Division
of the U. S. Department of Justice. I thank you so much for coming on the show.