Americans (and probably people the world over) can’t get enough of the breathtaking saga of Theranos. Millions of people are devouring documentaries, podcasts, books and articles on what could be one of the most outrageous stories of fraud in American history, rivaling that of Bernie Madoff.
Theranos claimed to have revolutionized the blood collection process by rendering blood draws with painful needles obsolete. It purportedly accomplished this by creating a tiny device that would collect blood from a tiny sample of blood—collected from a simple and negligibly-painful finger prick—which would then be tested in “real time” and be able to deliver fast, accurate results. The “menu”—sheer number—of diseases and illnesses the company claimed to detect by virtue of its “revolutionary” blood collection and testing process was jaw-dropping, ranging in the hundreds.
There was only one catch:
It was all bullish-t.
Will fraud prosecutions be on the rise?
If the Theranos scandal has taught us anything, its that the Government will stop at NOTHING to seek ruthless punishment of indicted fraudsters. Between the two of them, the disgraced founder of that company (once hailed by some as the “Steve Jobs” of her “Millennial” generation) and her ex-boyfriend/partner-in-crime/co-conspirator may spend the next half-century(!) in a federal penitentiary.
Perverse incentives?
Famous billionaire investor and lawyer (and a man known for his unyielding integrity), Charlie Munger, once said: “The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.”
Many would argue that, despite Elizabeth Holmes’ own personal culpability, the “hustle culture” around her (and everyone via social media) had already created a breeding ground for an infestation of the sort of greed, lies and “magical thinking”—i.e., delusion—that kept Theranos afloat for so many years. This happened even as the products (the so-called “nanotainer” and “Edison machine”) that Theranos had peddled were nothing more than carefully-crafted, deceitfully-marketed facades rather than actually-functioning devices.
Did social media culture’s “Cult of the Rich and Famous Start-Up Entrepreneur” lead to the Potemkin village known as ‘Theranos?’
The “hustle life”—again, some would argue—created a “Petri dish”, an incentive structure that helped mold, shape and create the type of shenanigans that led to the meteoric rise and even more spectacular downfall of a company with a once $9-Billion valuation.
Don’t think for a second that prosecutors aren’t keenly aware about the idealogical and cultural underpinnings of start-up and criminal fraud screams that wear the mask of entrepreneurial “respectability”.
How can a good criminal defense lawyer parlay this into a victory for the defense?
There is a good argument to be made that despite the malfunctioning (or non-functioning) of Theranos’ products was NOT necessarily as sinister as the media would have us believe. To secure a conviction of fraud against you, the Government has to prove that you harbored the specific intent to carry out a material misrepresentation of your product. In other words, in the Elizabeth Holmes scandal, a good criminal defense lawyer would argue that she truly believed in the integrity of her product, or she at least believed that her company was moving in the direction of establishing a viable product. This would challenge the notion that she knew that she was perpetrating a fraud on investors, consumers and the public at large. Many companies now considered household names started out with the “fake it ‘til you make it” mentality, eventually launching products that became functional mainstays for public consumption. A good criminal defense lawyer defending Ms. Holmes would argue that her conduct —not selling her shares and actually reinvesting most of the investment money in attempting to create a viable product — defy the Government’s claim that she acted with fraudulent intent.
Know somebody in your life who “hustles hard” or is about that “hustle life”?
If you or someone you know are ambitious entrepreneurs, it is indispensable to know a great white-collar criminal defense attorney: Second Chances Law Group, APC. In the wake of shocking corporate crime scandals, you can bet state and federal prosecutors are “out for blood”, figuratively speaking of course, on the hunt for suspected white-collar criminals.
How our white-collar criminal defense team at Second Chances Law Group, APC has secured dismissals for countless criminal defendants, some of them facing terrifyingly-long prison sentences before we rescued them from the abyss of a criminal conviction and decades of prison.
Watch our video to learn more about our white-collar criminal defense attorney:
Call us today: 626-827-7222 for your free in person consultation. While some of our competitors are out on the golf course during the weekends, we are meeting with folks who desperately need legal help. We currently offer senior discounts and we have very affordable installment plans in the low hundreds.
You can also reach us at: www.secondchanceslaw.com
Stay safe and stay strong,
Attorney Joe Coimbra