Elizabeth Holmes’ ex could hold her ticket to less jail time
And it has nothing to do with how she feels for the man she claims
The former CEO’s attempts to pin the blame on Balwani for the blood-testing startup’s collapse didn’t stop jurors from finding her guilty in January of defrauding investors.
But Holmes will get another chance to argue that the Silicon Valley businessman was a bad influence on her when the U.S. District Judge
That’s why Balwani’s trial, which begins Wednesday with jury selection, is crucial.
Any new information that points to him as the mastermind of the Theranos fraud improves Holmes’ chances of getting at least a modest reduction in a prison sentence that could range from about nine years to double that amount, according to lawyers for the criminal defense not involved. in the case.
“She will want evidence to show that he was the force behind it all, a master manipulator, a bad man,” said
Balwani became a subject of intense attention during Holmes’ trial as she accused him of emotional and sexual abuse. Holmes told jurors the Silicon Valley businessman who became her second-in-command in 2009 was in tight control of how she and the blood-testing startup rocketed to stardom and a $9 billion valuation before its closure in 2018.
Balwani has denied wrongdoing within the company and allegations of abuse by Holmes. His lawyer,
It will be Davila’s task to assess the dynamic between the two before inflicting the punishment on Holmes.
“It’s not enough if he loses,” Crudo said of Balwani. “That he’s a bad apple doesn’t necessarily make him less of one.”
Testimony in tears
Holmes laid the groundwork to seek Davila’s sympathy when she testified tearfully at her trial in November that Balwani, twice her age, wooed her at a vulnerable time after she was raped as a student undergraduate at Stanford University and later inflicted emotional and sexual abuse. abuse her for a decade.
The judge will receive recommendations from the federal probation office and prosecutors on how long they think Holmes should serve. His lawyers will likely argue that while Balwani’s influence “does not excuse his conduct, it does provide important context, it is a mitigating factor” warranting a lighter sentence, said Andrei Spektorattorney at Bryan Cave Leighton Paisner LLP.
“It could also be used to show that Ms Holmes suffered during her Theranos experience – that it wasn’t all glitz and glamour, and so she doesn’t need a particularly long sentence for be punished or deterred,” Spektor said. noted.
Government witnesses called in Balwani’s trial are not expected to recant Holmes’ abuse allegations — or undermine the evidence in her trial that she was Theranos’ ultimate decision maker as CEO. But they are likely to be questioned about Balwani’s management style and any character flaws that would explain his guilt.
Legal experts say Holmes is unlikely to testify, although she has been listed as a potential witness. Balwani did not testify at his trial.
Role of the judge
To shape a sentence for Holmes, Davila will start by determining the longest possible prison sentence she could serve. The judge will have to analyze for himself, again, Holmes’ argument that Balwani’s abuse could explain his failures, said Nancy Clarence, white-collar defense attorney at Clarence Dyer & Cohen LLP. And then reduce it to a size corresponding to his vision of the crime and his guilt.
Balwani’s alleged abuse “could help explain errors in judgement,” Clarence said. Her lawyers will “seek out any facts they can glean” from her trial that could be used to reduce her sentence, she said.
To calculate prison sentences, judges rely on federal guidelines as a benchmark. For Holmes, the staggering amount of money investors have lost to Theranos is the main driver of the heavy sentence it faces, said Seth Kretzercriminal defense attorney at Kretzer & Volberding PC.
On a single count, Holmes was found guilty of
“I don’t see his route to a low penalty here,” Kretzer said. “He has to give him a huge break just to get to a 10-year sentence,” he said, referring to Davila. “And it wouldn’t take a creative lawyer to go much higher.”
Two other counts of investor fraud Holmes were found guilty of totaling $44 million in losses — not enough to move her to the next level of incarceration for that offense. But other “aggravating” factors, including the fact that Holmes arguably led the fraud as the startup’s CEO, could add years to his sentence, Kretzer said.
To estimate how long Holmes might end up spending in jail, Michele Hagan, a former California prosecutor, studied 11 fraud cases that Davila handled. Based on that review, she believes Holmes faces a sentence ranging from around nine to 17½ years. The final outcome largely depends on what Davila learns from Balwani’s trial over the next few months, she said.
“We still don’t know what evidence is going to come out in Balwani’s case,” Hagan said. This will reveal whether Holmes “was more involved than we know – or less involved”.
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