In about nine months, Elizabeth Holmes will learn whether she spends up to 20 years in federal prison after being found guilty of four counts of fraud.
She had faced 11 charges. The federal jury reached the following verdicts:
- Guilty of three counts of wire fraud against Theranos investors
- Guilty of one count of conspiracy to defraud Theranos investors
- Not guilty of one count of conspiracy to defraud Theranos patients
- Not guilty of three counts of wire fraud against Theranos patients
The jury was deadlocked on three other charges of wire fraud against Theranos investors. Those charges have since been dropped. The verdicts came down on Jan. 3, 2022. The trial had begun on Sept. 8, 2021.
She was convicted of defrauding PFM Healthcare Master Fund out of more than $38 million; Lakeshore Capital Management of almost $100 million; and Mosley Family Holdings of close to $6 million.
Theranos Now Defunct
Theranos and Holmes were once the darlings of the startup world. She insisted the company was developing blood-analysis technology that could diagnose serious conditions, even cancer, with the prick of a finger. Her penchant for wearing black turtlenecks drew comparisons to Apple’s late founder Steve Jobs. Unfortunately, her assertions about Theranos were never true.
Theranos dissolved in 2018 after being in the bullseye of criminal and civil investigations. In an SEC settlement, Holmes paid a $500,000 fine and agreed to not sit as an officer or director of a public company for 10 years. Now 37 years old, she started the company when she was 19.
What Is Fraud?
When someone deliberately uses deception in an effort to obtain a benefit, they may be guilty of fraud. Withholding information, falsifying financial documents, lying about results, and insider trading are only a few examples of fraudulent behavior.
Fraud is classified as a white-collar crime, a term supposedly coined in 1939. These crimes are generally non-violent, and the motivation is usually financial.
In addition to fraud, other white-collar crimes include:
- Bribery
- Corruption
- Embezzlement
- Forgery
- Identity Theft
- Money Laundering
Some white-collar crimes are under California jurisdiction while others are punishable by federal law. Sometimes, fraud can be prosecuted in both. The processes, though, are quite different. Legal representation with experience in both state and federal courts is crucial for effective defense.
Corrigan Welbourn Stokke, APLC is composed of a team of former prosecutors. They utilize their experience in criminal law on both sides of the courtroom to craft strategic defenses for their Newport Beach clients who are facing criminal charges, whether state, federal, or both. Federal white-collar crimes are usually investigated by the Federal Bureau of Investigation (FBI).
Fraud Charges Carry Stiff Sentences
State fraud charges can be felonies or misdemeanors, and both can mean time behind bars. A felony can result in up to five years in state prison and fines up to $50,000. Misdemeanor fraud has penalties of up to one year in jail and a $1,000 fine. When looking at federal charges, a conviction can cost you hundreds of thousands of dollars and decades in federal prison
Proving fraud can be difficult because that generally involves some element of intent. Proving someone’s intentions is often problematic. Our skilled lawyers at Corrigan Welbourn Stokke, APLC work to illuminate any weakness in a case in an effort to reduce charges or have them dropped altogether.
If you are ever accused of a white-collar crime, contact us immediately. We can be most effective when we begin working on your case from the very beginning.
Reach out using our online form or by calling (949) 251-0330. We offer same-day appointments, and the initial consultation is at no charge.