Silicon Valley queen Elizabeth Homes is returning to headlines as one of the most anticipated criminal fraud cases finally goes to trial. Here's what you should know.
Who Is Elizabeth Holmes?
Known to most of us as the former "youngest self-made female billionaire," Elizabeth Holmes took the tech world by storm with her company Theranos.
Holmes' vision was a company that would democratize healthcare by providing accurate reports through a blood diagnostic machine that would only require a few drops of blood. This one-time blood testing technology would have revolutionized the way people receive healthcare.
However, despite grandiose promises from Holmes and her partner, creating the machine of her dreams was much harder than she expected. Her company was valued at $9 billion despite having nothing to show for it. Eventually, the truth would catch up to Elizabeth Holmes.
An investigation into Theranos found that the company was using third-party machines to perform tests – not proprietary tech. In addition to falsifying the reality of her situation, Holmes told investors that they would be a part of something great in exchange for their investment.
According to the investigation, Holmes lied about partnerships, financial gains, and projections to procure funds. The Department of Justice has a name for this: wire fraud.
Possible Punishments
Wire fraud charges apply to each occurrence, so if Holmes sent out ten emails making false promises, she would face ten counts of wire fraud. In criminal cases, wire fraud is punishable by 20 years in prison and a fine of up to $250,000 in addition to restitution for victims of the scam.
As it stands, Holmes faces 12 fraud charges for wire fraud and conspiracy to commit wire fraud. This means that despite knowing the company's status, Holmes continued to persuade investors to keep up the cash flow.
Defending against charges like this can be tricky, but Elizabeth's defense team has a unique strategy as the case goes to trial.
State of Mind
Holmes and her business (and romantic) partner Ramesh "Sunny" Balwani engineered the future of their company together, and their relationship could be what saves Holmes from federal prison.
The defense will showcase the fact that Balwani had complete control over Elizabeth's actions and state of mind, which is considered abusive behavior. Holmes' lawyers will point to their "abusive-partner relationship" as the source for her decisions.
In claiming that Elizabeth Holmes is a victim of extensive psychological abuse, the defense puts the prosecution in a difficult position: move forward with the criminal case or take a more delicate approach to avoid victim shaming.
It's important to note that while this case has been highly publicized, we can't know most of what happened behind closed doors. Balwani's relationship with Holmes appeared healthy on the outside, but as with many cases, abuse may have occurred in private.
Is This an Insanity Plea?
While it may seem like an insanity defense on the outside, it doesn't exactly fit the definition. Insanity defenses have to prove that the defendant was either incapable of stopping themselves from committing a crime or unaware that their actions were wrong.
In Holmes' case, the defense isn't denying that she lied to investors – they are pointing to the possibility of abuse as a motivator instead of criminal intent. If Elizabeth was pressured into committing crimes by an abusive partner, her actions were done under duress.
The Future
Whether this defense works or not, we won't know until the trial is complete, but this case does raise questions over the role of the #MeToo movement in the criminal justice system. Women have been denied justice since the founding, and abuse has often led to death for many of them.
The Elizabeth Holmes case also addresses the idea that abuse can happen anywhere – a successful professional woman can experience horrific abuse at the hands of someone she trusted.
The Draskovich Law Group will continue to follow this case as it goes to trial.