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What's next for former Theranos CEO Elizabeth Holmes after 11.25 year sentence

What's next for former Theranos CEO Elizabeth Holmes after 11.25 year sentence

Video Transcript


ALEXIS KEENAN: We're here at the federal district courthouse in San Jose, California where Elizabeth Holmes, the former Theranos founder and CEO, was sentenced to 11.25 years in prison for her role in defrauding investors to the tune of hundreds of millions of dollars. I'm joined now by George Demos-- he's a former SEC prosecutor-- to talk more about the case. George, let's talk about the sentence and just your general reaction to that 11 and 1/4 years behind bars for Elizabeth Holmes, who is 38 years old and pregnant with her second child now?

GEORGE DEMOS: The sentencing today sent a powerful signal that fraud can not masquerade as innovation, that Elizabeth Holmes's fake it till you make it is not consistent with the ethos of Silicon Valley, and that she really engaged in fraudulent activity. And the judge recognized that and recognized the history of Silicon Valley and Elizabeth's Holmes behavior. And the way she comported herself at the company was not consistent with that.

ALEXIS KEENAN: Yeah, the judge talked a lot about that, about the foundation of Silicon Valley going from an agricultural valley all the way to a technological giant that the world is relying on for innovation. So do you think this type of sentence will, in fact, be a deterrent? It seems like that's what the judge was hoping for.

GEORGE DEMOS: Well, the judge took great pains to say that he's a local here, a born and raised native here in Silicon Valley, and that the DNA and the ethos of Silicon Valley is not to commit fraud. He talked a lot about the Apple founders in their garage and the incredible innovations that they started, and he was trying to contrast that with Elizabeth Holmes' purported defense that she was simply trying to follow in what everyone knows in Silicon Valley.

ALEXIS KEENAN: OK, now let's talk about what happens next. Elizabeth Holmes was told by the judge that she needs to surrender to custody on April 27. Now, some of that has to do with the fact that she is pregnant right now, but tell me, what happens next?

GEORGE DEMOS: Well, it's significant. The judge actually made note of the fact that April 27, he said, I hope you realize the date. And I believe that was designed to afford her the opportunity to give birth outside of prison, which is a compassionate and humane thing for the judge to do. And, hopefully, that leads to reforms throughout our prison process.

But she will also, no doubt, file an appeal within the next two weeks. And the question of whether she stays out pending that appeal will be up to the judge. And then, if he decides that she can-- that she must stay in, she can appeal that to the Ninth Circuit Court of Appeals. So whether or not she reports to prison on April the 27th remains to be seen.

ALEXIS KEENAN: OK, and what are some of the just common reasons why someone does file an appeal, a defendant who's suffered this strong of a sentence?

GEORGE DEMOS: The primary issues would be issues of testimony, evidentiary matters, whether or not the judge's rulings during the course of the actual trial were consistent, whether she was denied the opportunity to put in any exculpatory evidence-- that's usually what forms the basis of an appeal. I'm not sure what grounds Elizabeth Holmes would proceed on here or how strong they are, but no doubt, her defense counsel will file an appeal.

ALEXIS KEENAN: When will we know whether an appeal is, in fact, going to be filed?

GEORGE DEMOS: I believe she has to do that in short order in the next two weeks. So we expect her counsel to do that in the next two weeks and then the process to go forward as to whether or not the appeal will allow her to stay out pending the resolution of that appeal.

ALEXIS KEENAN: And in terms of serving out a sentence, 11 and 1/4 years, for Elizabeth Holmes, what types of factors would determine whether she actually has to serve that much time or whether she would be given a release that comes sooner than that?

GEORGE DEMOS: There are provisions within the federal sentencing guidelines for good behavior. She could be released earlier than that. We've seen that. So whether or not she serves an actual 11 years, it remains to be seen, but I would suspect she'd serve a substantial portion of that.

11 years is a serious sentence considering what they had asked for, but the judge seemed intent in this case on making the point that she has not accepted responsibility for what she did. You notice, she made a very careful point of saying she accepts responsibility for Theranos, but not for the fraud that she committed, and that's a very key distinction. She was playing games with her words once again.

ALEXIS KEENAN: George Demos, thanks so much for talking with us.

GEORGE DEMOS: Thank you for having me.