well and some other news
jurors continuing to deliberate the fate of Elizabeth Holmes,
the disgraced founder and ceo of the blood testing startup Theranos,
she does face multiple counts of wire fraud related
charges and could spend decades in prison if convicted
in a case that could serve as a turning point for
the boundless optimism and lack of scrutiny around Silicon Valley startups.
Joining me now is Andrew Georgia partner at baker Botts
focusing on fraud conspiracy and other white collar crimes.
Andrew thanks so much for coming on the show. So
jurors continuing to deliberate. What are the key things
that you're keeping an eye on as we await a verdict.
Sure.
Well,
one thing that not a lot of people think about in this
situation just to start off is how torturous it is waiting,
how hard it is for the lawyers for her
it must be absolutely unbearable the stress of the situation
And she is facing very serious charges.
As you said, nine counts of wire fraud, two counts of conspiracy
and potentially a very severe sentence if she's convicted.
Now the statutory maximums under the statute she's been charged under
can be up to 20 years.
This is your your graphic says the actual sentence
will be most likely determined by the sentencing guidelines.
But in her case the guy,
the key guidelines factor will be the amount of
the loss that she charges that she caused.
If she's convicted and the amount could be quite high in this case.
So it could be a pretty severe sentence if convicted.
So what's the burden of proof here?
The jury deliberations and now we're in 1/5 day,
what do they have to prove? Is it beyond a reasonable
doubt or just with a considerable amount of
conviction that she did commit these crimes.
So it's a criminal case. So it's beyond a reasonable doubt.
They have to prove that she's guilty beyond a reasonable doubt.
And the jury has to make a finding of whether the government
has done that for each of the counts in the case.
So there are 11 counts in the case.
It's probably gonna take them a little bit of time to get through. All of them.
Didn't necessarily expect it to take this much time,
but everything in this trial has taken longer than than usual.
So should what should we
as viewers as people waiting.
Is there any worry that the jury is taking so long to
deliberate or would you really just maybe not read into that?
Well, I mean,
it certainly indicates that a they're being careful um which is a good thing.
That's what we want.
We want the jury to be careful because this is
very serious and the impact on her is very serious.
It indicates that there may be disagreements as
to particular aspects of um individual accounts.
You know, it's so hard to know. They may be,
they may have come to agreement on some counts and not others.
Um It's very hard to know. But uh you know, the
the one thing,
the one thing that we can really read into the situation is really
based on the questions that the jury asks and if you'd like,
I can, I can tell you there,
there was one question that came in last week that I think is particularly revealing
and what, what was that question? Andrew
Sure.
So the jury asked to have replayed for them an audio recording that
MS Holmes of MS Holmes speaking to investors and during that audio recording,
which I listened to again before this call, um, she told the investors, uh,
that we've built our business around partnerships with
pharmaceutical companies and our contracts with the military.
Now, if the jury is focused on that recording,
then in my mind,
that's not a great sign because those two statements that we build our
business around partnerships with pharmaceutical companies
on our contract with the military.
And I think she even said the military is a big deal for us.
Well, she admitted during trial that
there were no military contracts and that they
never had any agreements with the military.
And she admitted during trial that she stuck
Pfizer's name on
an investor report where fighter had already essentially turned them down
right.
And I know two for even a whistleblower,
a female that came forward as a
whistleblower Elizabeth Holmes who somewhat shockingly,
I think by some standards did actually take the stands over
a series of days opened herself up to a cross examination
said that the retaliation against that whistleblower, it was a mistake as well.
So certainly she did admit her mistakes.
But talk to me just about how rare it was to hear from her the founder of this company,
the disgraced founder of this company over a series of days.
Do you think that was a wise legal move?
Yes, I think they had to do it. I think she had to take the stand.
And I mean she obviously had a choice. The constitution gives her that choice.
But if she hadn't taken the stand in a case like this,
then there's very little to go on to say what her intent was right.
Her case is all based on, I didn't intend to commit fraud.
That's basically what it was.
And so that is very, very hard to do without her taking the stand.
And I think in a case like this, um the jury would ask itself well
if I had been in her position and I was not guilty, I would be screaming about it.
And so I think that she was smart of her to take the stand.
Um, I think that she was convincing
when she took the stand.
I think she was convincing that she really wanted their notes to work.
This wasn't just vaporware. She really did want it to work.
Um,
did she convincingly explain the seemingly false
statements that were made to investors?
That's a much tougher question. I think that's the
much harder for her to do. And I think the government was very smart to go after her.
You mentioned the whistleblower.
The government was very smart to go after her in its cross examination.
Um, for going after those whistleblowers so hard because I think it,
it shows the side of her that may make the jurors very more open to punishing her.
Uh, well, these deliberations clearly still ongoing Georgia.
If you have any insight as to when a verdict might be reached, we would want to hear
about that as well.
Another topic that I want to just hit on at least
is we know we know most startups in Silicon Valley writers,
most startups in general.
Um,
they hype their hype machines, right?
They hyped their product, they hyped this new technology that they're promoting,
right?
They believe most of them do believe that if it doesn't work today,
they're receiving these VC dollars because it's going to work in the future.
And so these, the fraud counts, right? How is that different
than any other startup basically going out there and promoting its business.
Right. I mean, it's a great question.
And um, look, you know,
you often say in the law that the fact that everyone else was speeding,
that's not a defense to speeding.
Um, that said, look, I mean, yes, hype is a huge part of Silicon Valley.
I think that the distinction here and the government tried
to draw this distinction at trial is to say,
look, this isn't just
puffery. This isn't just exaggeration.
These are, you're saying things that are objectively not true,
right?
You're saying that you've deployed this technology in
a battlefield in combat when you had right.
And that that's something that you just can't do,
especially with something that people are relying on
to tell them what their medical status is,
right there relying on this technology to tell them.
Um,
you know, if they're sick or not.
And so
I think what will be the impact of a guilty verdict on Silicon Valley?
I mean,
I'm sure that it will cause people to be a lot more careful
about making sure that they're not saying things that are objectively false.
But at the end of the day,
what happened in this case I think is probably
it's a cautionary tale no matter what I mean.
Anyone who sees what happened in this trial, even if she's acquitted.
Well, no, I mean this, this woman went through torment because of this.
And because of the things that that were that she said and that we're done
and you know, whether or not she's convicted,
they're still going to be more careful.
I
there are so many things I think that do make this startup in particular
unique. Andrew some of them, which we've been discussing.
My last question for you because we're running out
of time is there are two separate trials actually,
uh, the second in command.
Sunny Ball Wani is going to be tried in several months down the road from now.
We know both of these two parties Elizabeth Holmes and Sunny Ball Wani.
They did date, they were in a relationship,
but now they're, they're basically at each other's next,
which is why we are going to see separate trials for both of them.
The fact that Sunnyvale Wani is going to be tried down the road,
Does that
put into jeopardy the verdict that will be reached in the Holmes trial
potentially this week at all?
No, I don't think so.
I mean they are separate cases and um, you know,
the Ball Wani case certainly was a factor in home's case
because homes um went after him pretty hard and a big piece
of her defense seems to be that she was in a bad
relationship with him and that he had substantial control over her.
Um, I think,
uh,
one difficulty for her is carrying the threat of so whether or not
that explains the specific false things that she appears to have said,
it is a difficult question, but I mean ultimately they are separate cases.
Um, certainly if I were,
his team will be watching the outcome here very closely and if she's convicted, that
is a bad sign for him