It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results.
Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans.
But a patient does not expect for their blood test results to be completely wrong. Her tests weren't giving false-negatives or false-positives, they were using lab techniques that we have known to be inaccurate for decades. She knowingly sold Walgreens on 1 test, and then performed a different test.
I need to sit down and properly inform myself about how the prosecutors fucked that up so badly.
It's not particularly surprising, if you assume that the jury was essentially looking for a specific, traceable line between representations from Elizabeth Holmes herself (and nobody else) and the subsequent payment as a necessary element of fraud. (Whether or not the jury was doing so could be guessed from reading the jury instructions, which I haven't done).
Being found guilty of defrauding investors in that light is easy because Holmes did specific acts, such as basically saying "we're endorsed by $BIG_PHARMA" knowing that they weren't, as part of her investor pitch--that's a pretty unambiguous traceable injury. But tracing anything she herself said to getting a random schmoe on the street to take a blood test... again, if you think fraud requires that specific act, it's not hard to see why someone would vote not guilty there.
Of course, I would still have liked to see her proclaimed guilty on fraud for the test results. But as abhorrent as her actions may have been, they may not have necessarily climbed the bar into illegality.
I agree with everything you said, but I think the person you're replying to is less upset at the prosecutors/jury, and more upset about the laws in the first place. They protect the rich and powerful, and don't worry about the average person getting hurt.
In this case it seems to be a matter of distance, not power.
Imagine that, rather than the CEO making shit up, the case was about a lowly lab technician who faked results out of laziness or recklessness. Even though his fraud ultimately impacted the patients, he would probably still get convicted for defrauding his boss or the company he directly worked for, not the patients he never met or knew.
I think you have to look at the client side of the power equation. Nobody in the government is going to stick their neck out because a few voiceless plebs may have got the wrong blood test results at Walmart.
If your client was a wealthy person or large corporation and you knowingly lied to them about the performance of your product or service which caused them damages, would you get charged?
There's a difference, lab tech would impact individuals, but he wouldn't make false claims to the general public as the company's main selling point. Here we have someone basically selling snake oil to people, and still she was found guilt only for hurting her investors.
Ultimately, does this mean that the next fraudster will get away with it as long as they keep their investors in the loop about the lies?
> There's a difference, lab tech would impact individuals, but he wouldn't make false claims to the general public as the company's main selling point.
But when it's the CEO who does it, doesn't she do both? I mean, those individuals who get the fake test results are also members of the general public.
I maybe agree that that's what that comment probably should have been focussed on, but they did explicitly cal out the "prosecutors" for having "fucked up" getting the conviction.
This diffusion of responsibility in corporations drives me crazy. A CEO can create a crimogenic environment, and as long as there are enough layers of management or outsourcers, you can't pin the specific crime on anyone, and you can't jail a corporation.
From what I've read, patients were prevented from testifying about the impact of the damage caused by the incorrect test results. That means life-changing pain and suffering was concealed from the jury.
They weren't really being charged with the stuff about patients, in part I think because the communication between Holmes and investors was direct, whereas Holmes was not personally communicating with the patients. Basically, the prosecutors went for the charges that were easier to prove.
If Theranos still existed as a company, it would doubtless be getting buried under a blizzard of charges relating to how Theranos, the company, treated their patients. One of several reasons why Theranos the company no longer exists.
> [She wasn’t] really being charged with [wire fraud with regard to] patients
Unless the word "really" is doing some heavy lifting here, this is incorrect. There were multiple counts directly and specifically related to defrauding patients. These counts came back not guilty, but they were, in fact, charged, and customers testified in court in support of these charges.
The articles says "This case was specifically about what Holmes told Theranos investors, although her lies also impacted partners and patients" which I took as the patients claims were not part of this trial, but maybe they were?
You're correct, I saw that all of the counts were wire fraud or conspiracy to commit wire fraud, and didn't realize that they included wire fraud...of patients.
I have to think, though, that the fact that it was such an odd charge in relation to patients, had a part in why those charges didn't stick. I think wire fraud in relation to investors succeeded because it was a much more accurate description of the act involved. But you're correct, some of the counts that didn't stick were wire fraud related to patients.
It's fairly easy to set up situations where the people doing the actual work are not knowingly defrauding anyone. The salespeople are told the machine is real, the delivery people never see inside the lab, the testers inside the lab are trained by the few people really in on it (I don't think they had the proper independent training) so they don't know how bad the tests are, and the scientists think everyone knows they're working on version 2.0 but they're told not to discuss readiness, leading the salespeople to get the wrong idea. Heck, most frauds don't want their people to know that it's a fraud - too many people raises secrecy and conscience issues.
Correct, it is all about what they have a paper trail for. It is also very difficult to prove harm to patients. Any prosecution would depend on a lot of statistics and scientific detective work, which the prosecutors frankly aren't equipped to take on.
Theranos tests gave some inaccurate results, but the defense will say Traditional blood tests can be wrong as well. This devolves into statistical evaluation of the methods used for testing, e.g. if the standard test is 99.9 what was the Theranos result?
This is a huge mess, and why the pragmatic charge was financial fraud.
They had a fully functional lab though, it just wasn't using Theranos' devices.
This is what they did to Wallgreens, they sold them on the idea that they would have theranos machines in-store, but instead what they did was do IV blood draws (calling it a comparison check) .. and then would just process the samples the same way as everyone else using standard equipment.
People were getting good results because Theranos was using machines from Siemens in their hidden lab.
My understanding is they took much smaller samples of blood which lead to lots of reproducibility problems. The standard machines they were using were being fed with up-sampled blood because Theranos didn't have the normal sample size.
> People were getting good results because Theranos was using machines from Siemens in their hidden lab.
Thus the tests sometimes were good, and sometimes bad. Some patients underwent unnecessary medical treatments and procedures based on bad tests.
They were using traditional siemens for most tests but were doing some tests with a fingerprick that they diluted - like their PSA test sometimes coming back super high for cis women, indicating that they had prostate cancer.
I believe they also reverse engineered a lot of the third party machines, in an attempt to make them work the way they wanted to. That's... that's bad.
After failing to produce their own reagents and hardware, Theranos pivoted to using off-the-shelf Siemens hardware and reagents (purchased through a shell company) and dramatically diluting the blood samples to make good on the "single drop of blood" customer promise.
This would've been an impressive feat of reverse engineering, software eating the world, IF IT WORKED. But it didn't. Results couldn't even pass internal audits and the FDA forced Theranos to invalidate ~1 million test results when they found what was going on.
Reverse engineering is an important right that is protected by centuries of patent and trade secret law in the US and many other countries. It's fundamental to innovation, even though non-innovative bad people like Theranos also do it.
Reverse engineering is not bad, and it is dismaying that someone posting on a site called "Hacker News" would think so.
Their use of the term "reverse engineering" is perhaps not ideal.
If they were taking apart and studying the hardware inside competitors' machines, then that would not have been a problem. It's something which many companies do. But they would not be using this for patient testing, they would use it as input to product development and engineering.
Theranos were modifying the machines to operate outside their design parameters. Medical diagnostic equipment is validated at great expense to operate within given parameters to give a diagnostic result which is known to be accurate with a very high probability. They are carefully calibrated and tested to guarantee the accuracy of every test. Tampering with them makes them invalidated and destroys any guarantee of diagnostic result accuracy. The FDA approval for the equipment is only valid if they are operated as intended.
Agreed. My concern is precisely with this conflation of Theranos's negligent misconduct with the exercise of the fundamental rights which allow us to fix our cars (if you fix your car without a shop manual, you're doing reverse engineering --- and both Chilton and Haynes do reverse engineering to write their shop manuals), fix our laptops (see Louis Rossmann), uncover Microsoft's dirty tricks to break competitors' software (reverse-engineering was crucial to the antitrust trial), preserve our information (both PDF and Word formats were reverse engineered before they were opened), use IBM-compatible PCs (the clone industry was able to launch because Phoenix reverse engineered the BIOS and wrote a cleanroom clone), and generally do anything with a manufactured device that the manufacturer didn't intend.
For this reason there are carve-outs in copyright law where something is illegal except when done for the purpose of reverse engineering; for example, in the US, you have Sega v. Accolade.
Reverse engineering is not bad, and it is dismaying that someone posting on a site called "Hacker News" would think so.
Personal attacks aside,
I'm just saying that if I get a blood test and it says I've got AIDS and I actually don't -
and that's all because some sociopath grifter with less of an education than what's been proven with my own Bachelors of Fine Arts realized that to swindle millions of more dollars from her geriatric backers she's been manipulating (and ruining the lives of their own family members),
she needs to fake the test results from an impossible dream machine that does NOT exist and couldn't ever - because it defies the laws of physics,
and does this by running modified machines of her competitors that are now basically broken,
in secret rooms she doesn't tell journalists or inspectors about,
I do think there's nuance when the product is a medical testing device, and the company doing the reverse engineering is a competitor of the company who made said device and that engineering was faulty and could have cost people's lives.
But I don't know if the context of any of this is what some really want to discuss. It's just the slogans. You know: "hack the planet" and all.
I also don't think I'd be really OK with working for a company that told me to do this reverse engineering, but if your morality says differently, then: hey.
I don't think you should be criticizing reverse engineering here any more than you should be criticizing programming, science, skill, studying, engineering, logic, thought, changing your mind when you're wrong, or any of the other basic aspects of hacking. You're as out of place here as someone complaining about how nerds study all the time, get better grades than you do, and know how to fix their computers while you're stuck paying someone else to do it. You come off as a troll posting deliberate flamebait in hopes of getting a rise out of us.
Of course badly done reverse engineering can be bad. But that's not because it's reverse engineering; it's because it reaches incorrect conclusions that hurt people, just like not doing any reverse engineering at all. The problem that put people at risk in this case wasn't that Theranos did reverse engineering; it's that they didn't do enough reverse engineering.
> I don't think you should be criticizing reverse engineering here any more than you should be criticizing ...
No, sure, real reverse engineering is fine.
But when "reverse engineering" is used in the sense Theranos (and/or Holmes' defense team) apparently did -- i.e. tampering with a competitor's machines so they sometimes don't work properly, and passing off the sometimes-invalid results as super-duper hot stuff created by your new and superior WonderTech™ -- then yes, it darn well should be criticized to Hell and back.
I think "reverse engineering" in the gp was just an ill-considered choice of word. What they are describing doesn't really have anything to do with reverse engineering -- it's just using the devices in a way that will not produce the desired reliability of results. The fact that their methods differed from what the manufacturer recommends would not be a problem if they could prove that the false positive/false negative rates were up to the relevant standards.
> The fact that their methods differed from what the manufacturer recommends would not be a problem if they could prove that the false positive/false negative rates were up to the relevant standards.
Well, better than the relevant standards. Otherwise all the "reverse engineering" -- i.e, tampering -- is fucking meaningless.
It's meaningless if nothing is better about how you're doing it. Presumably in this case the thing they wanted to improve was the amount of sample you need to use, not the false positive/negative rates.
But they knew at the time they were peddling it that they didn't yet have that advantage. So selling it on the premise that they did was... Well, fraudulent, in my book.
I think that's entirely fine - both for patients and investors (Siemens might be a bit Irate, but I don't know if I would put that in the "Bad" category). The issue would be if they informed their investors that tests were being done on Theranos technology, but were actually using siemens technology. With regards to the patients - all they should care about is accuracy of test results - whether Theranos was doing it with Theranos tech, Siemens Tech, Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient - they just want to get the highest quality information possible, regardless of the route taken.
> Reverse Engineered Siemens Tech + dilution of the blood to get enough volume is mostly irrelevant to a patient
Those machines weren't designed to work that way though, so the test results were wildly inaccurate when they did dilutions. And they fired people who wanted to delay rollout in order to ensure that they had consistently accurate results.
The point I was making was that it was irrelevant how the original designs were intended - if Theranos had been able to successfully reverse engineers the tests, and determine a way to make them work reliably, while it would have made those of us who believed Theranos had some incredible new technology, and that Elizabeth Holmes was the next coming, no patients need to have been concerned. It was the fact that the tests were unreliable, that made Theranos guilty.
Lying about it to the Investors, and possible intellectual/contract issues with Siemens are another issue.
Yeah, I think we're actually in agreement here. Sometimes I think about how, if Theranos had figured out how to make things work over the last year before the WSJ article, all of their horrible and unethical practices would have been swept under the rug even if they were essentially lying for years to investors and patients.
Unfortunately, it turns out that "fake it til you make it" doesn't work with some problems that are seemingly unsolvable (at least by the approach they took).
> Unfortunately, it turns out that "fake it til you make it" doesn't work with some problems that are seemingly unsolvable (at least by the approach they took).
IOW, it turns out that "fake it til you make it" doesn't work if you don't actually make it.
> It was the fact that the tests were unreliable, that made Theranos guilty.
Very few tests are 100% reliable, so I would expect that Theranos claims about how the tests where performed would play a significant role in determining the guilt. People where told they would get the perfect magic pixy dust test that worked on one drop of blood instead they got one of the early covid tests that needed at least four repeats to give a "most likely negative" result, unsurprisingly the covid tests also resulted in confused tweets by the one or other VC.
Well - some of the tests have to be 100% reliable, because medication decisions are made on them, and the incorrect dosage can be harmful. It's not like a cheap $10 antigen tests that has sub 100% specificity and sensitivity - a bunch of the tests were trying to measure particular levels. Theranos was just overall horrible. They were trying to do some tests that were impossible based on the physics of what can be measured by pinprick blood.
>> Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans.
The above does not excuse fraud. Investors know their investments are risky, but that does not give you permission to deliberately lie or mislead, with an intent to deceive the potential investor.
For example, if you tell investors that you anticipate getting $50M in new contracts over the next year, well, assuming you mean it in good faith, that's not fraud even if it doesn't pan out or was delusional to begin with.
If you tell an investor you just signed a contract for $50M, in order to get them to invest, and that's a total lie, that's fraud. Whether or not the investor did appropriate due diligence to confirm that fact or not, it's still criminal.
In one sense you are correct, just because investors are knowingly making speculative investments, that doesn't make it OK to defraud them.
On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. It would be unreasonable to expect patients requesting a blood test to be suspicious and question the results.
> On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical.
If you've ever dealt with competent VCs, they are very skeptical, which is why they pretty much ignore your forward looking statements and just look at your current data. And the reason they do that is because forward looking statements can be all kinds of BS, but current data is just facts (unless you're lying about them, in which case it's fraud).
Of course, they also want to know your vision and drive for the future, but they'll basically ignore statements like "We have 10 big deals I'm the pipeline" and just say "How many signed contracts do you have?"
FTA: “This case was specifically about what Holmes told Theranos investors, although her lies also impacted partners and patients.“
If that’s true, it isn’t surprising she wasn’t found guilty for defrauding patients, and more cases (¿maybe one focusing on partners and one focusing on patients?) could follow. I don’t know whether something like that is in the pipeline.
“In February 2020, Holmes's defense requested a federal court to drop all charges against her and her co-defendant Balwani. A federal judge examined the charges and ruled that some charges should be dropped: since the Theranos blood tests were paid for by medical insurance companies, the patients were not deprived of any money or property. Prosecutors would hence not be allowed to argue that doctors and patients were fraud victims. However, the judge kept the 11 charges of wire fraud”
I think that leaves open prosecuting for something else than fraud for knowingly delivering unreliable test results, but wouldn’t know what that “something else” would be.
I am neither American nor a native English speaker, but I always thought fraud was mostly a deliberate action, and negligence was mostly resulting out of either lack of action or accidental consequences of an action.
So if a company deliberately and knowingly markets a "sepsis-test" that puts out completely random results and leads to people getting their limbs amputated (bear with me, I know the example is terrible), they can only be held responsible for "negligence" by those patients? Or would patients only be able to claim financial loss due to fraudulent loss of work ability and such?
There was similar reporting of those prenatal genetic tests a few days ago (they have led to unnecessary pregnancy abortions due to incorrect results), and I wonder what corrective action we can do to ensure these things don't happen?
I’m not a lawyer, but the Wikipedia part I quoted gives me the impression that, in US law or maybe the specific state this case was in, “fraud” is legally defined “depriving somebody of any money or property”.
Again assuming Wikipedia (https://en.wikipedia.org/wiki/Negligence#Procedure_in_the_Un...) has this right, negligence requires injury (“The United States generally recognizes four elements to a negligence action: duty, breach, proximate causation and injury. A plaintiff who makes a negligence claim must prove all four elements of negligence in order to win his or her case”
“Injury” may have a wider meaning in US law than elsewhere, though. Wikipedia gives me https://en.wikipedia.org/wiki/Personal_injury, which says “Personal injury is a legal term for an injury to the body, mind or emotions, as opposed to an injury to property”, so properties can be injured, too, and https://dictionary.law.com/Default.aspx?selected=1646 sort-of shows that’s a synonym for “property damage”.
Negligence is not an absolute concept, there is a scale going from accidental to willful - which is where it borders on fraud. The legal definitions around these terms are complex, because the difference between gross negligence, willful misconduct, and outright fraud, can often be philosophical more than practical. In your example, I reckon that the random tests would be considered willfully negligent.
Yeah negligence is a better fit. Their process sucked unacceptably and they knew it but they didn't set out to lie with test results or never performed them.
I think they might have contracted out tests to real labs which could be fraud but that would be both harder to link to Holmes and potentially defensible. Imagine an alternate world with a Nega-Theranos which actually had machines which worked but were say five percentage points less accurate. Say Nega-Theranos used some patient samples with enough blood that way to check their accuracy in comparison. Technically not the machines they advertised but still done in patient interests.
We don't have a NegaTheranos and there were biophysical and statistical constraints which made the concept flawed from the start (not all blood sources are identical in the person and statistical limitations) . The smart thing to do was not try that method from the start. The ethical thing would be to tell the board and let them decide if they should dissolve the venture or try to pivot to another approach or task. It would be stupidly harder to try to identify the contents of blood non-invasively but actually possible. There are already several insulin only blood scanners in trial or development by multiple companies.
> Their process sucked unacceptably and they knew it but they didn't set out to lie with test results
They lied about what test they were doing, and people paid them based on that lie. While the jury here may be correct that that wasn't federal wire fraud by Holmes personally, it absolutely was a fraud by Theranos.
On the other hand Theranos and by extension Holmes had a duty to the patients which they clearly breached. It's definitely more clear cut in terms of negligence.
False. Fraud deals with any time in which something of value (not just something financial) is obtained under false pretenses, and (where civil damages or criminal restitution is sought/awarded for it) can address all compensable harms resulting from the misrepresentation, not just loss that was financial in character (the restitution will be financial, of course, but that's also true of negligence.)
Loss of property or of value is still monetary loss, which is financial. The fact is that for fraud, you much prove that something of value has been lost.
> “In February 2020, Holmes's defense requested a federal court to drop all charges against her and her co-defendant Balwani. A federal judge examined the charges and ruled that some charges should be dropped: since the Theranos blood tests were paid for by medical insurance companies, the patients were not deprived of any money or property. Prosecutors would hence not be allowed to argue that doctors and patients were fraud victims. However, the judge kept the 11 charges of wire fraud”
I don't know anything about that ruling except what you've quoted from Wikipedia, but didn't many of the patients have to make coinsurance payments for these tests? I just paid a medical bill today with a coinsurance component, and so both I and my insurance carrier have now paid for those medical services.
I also wonder about whether getting people to have a fraudulent medical test (which might cause some amount of pain or anxiety, especially for people who are afraid of needles) could have been a cognizable harm even if they didn't have to pay money to undergo it. But I realize that the law will often distinguish between suffering and losses of tangible property for many purposes.
> I also wonder about whether getting people to have a fraudulent medical test (which might cause some amount of pain or anxiety, especially for people who are afraid of needles) could have been a cognizable harm
If I remember right one of the witnesses was a woman who got a false-positive HIV test result, so they probably went for that angle.
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results.
my thoughts exactly. i'm woefully underread on the whole situation but something is weird and different about it.
one thing that does jump to mind is that the investor list and board composition isn't what i'm used to seeing for stem ventures. i can imagine that perhaps they're less forgiving of failure and were operating with more blind trust in company leadership on stem/technology matters.
My impression is that the defense put the onus on the lab directors etc and that she didn't know what was going on. I don't buy that, but the jury is supposed to go on only evidence presented at the trial, so I guess the defense did a good job.
It’s the elephant in the room. Hardly ever remarked upon but a complete head scratcher. This company is fated to play a staring role in at least one conspiracy theory going forward.
> It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results.
Not excusing it, but maybe it was a company vs personal thing (eg. consumer harm perhaps didn't pierce the corporate veil[1]). Whereas Fraud against investors is much more of a personal/individual thing.
I've been reading Dorothy Atkins' live tweet coverage of the trial since day 1, and it gives a blow by blow account of it. It starts at [1], and runs all the way up until the verdict. Strongly recommended.
Just going by Carryous podcast, it seems like there was a lot more hard evidence (emails, transcripts, texts, etc) that she was knowingly lying to investors. On the other hand, I don't think there was any hard proof that she didnt know the results delivered by her labs (which were using third party machines, albeit ones being used improperly), were bunk.
I feel like John Carreyrou deserves a medal for exposing the entire scam. First in WSJ articles and then in his book, which is a great read. It's incredible how much trouble this caused for him when Theranos tried to fight him.
Who knows how long the scam would have continued without him, and how many more people would have gotten bogus test results.
If Tiger Woods can get a presidential medal of freedom for playing golf, it seems like it's the least they could do for Carreyrou.
I agree the proof for defrauding investors was less arguable. However there were still clear indications that she should have known the tests offered to patients were unreliable. For example, Schultz told her, before resigning, that it was not OK for Theranos to continue re-running their benchmark tests until they got a passing result (kind of like shaking the magic 8 ball until it, on the fourth shake, correctly answers the question “Is today Sunday?” — then selling it as an oracle). One employee flagged it for her attention that females were getting results that should only be possible if they had prostates — and she dismissed this as well! There was other evidence introduced during court that showed she knew the tests her company was doing for customers were not as accurate as she claimed, too. I would have loved to see her found guilty on these counts as a result, and I would also love to hear about the jurors' reasoning for not doing so.
It's a bit like Al Capone being done for tax evasion rather than murder - you convict them on the charges that have the most evidence and are likely to stand up in court, even if they are lesser charges from a criminal and moral standpoint.
Because und test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything.
And what the user bought was the test result.
As far as I understood, with my very limited understanding of US law it seems hard to sue as a consumer as you where deceived but not hurt/damaged in any way.
Wasn't Theranos' claim that they could do tests from much less blood? So how could the results be accurate if they presumably didn't have enough samples?
During the purported early use of their technology, they were also taking full-size blood draws for "validation" against existing machines, i.e. the results were actually from off-the-shelf full-sample-size machines.
If Theranos still existed as a company, some of their results were bogus enough that they probably could get sued (IANAL). But Theranos doesn't exist any more.
>> test results where in general correctish, they where just not gotten in exactly the way it was claimed, which was also not noticable less reliable or anything.
Guess they just answered the question of "If you can't tell the difference, does it matter?".
I get that investors should know any investment can go to 0. But she was defrauding them by outright lying about how well the tech worked and what it could do. This verdict I think restores that contract between entrepreneurs and investors by saying if both invest in good faith then the whole thing works out. Otherwise we allow grifters like her and her business partner to suck good money out of the system. Now future folks who would try to do the same have this verdict to look at.
Patients who were wronged by the company did get screwed though. Such is the nature of trials by jury sometimes the jury doesn’t come through.
Is this actually the end of her legal trouble? I assumed they were pushing the financial stuff because it is relatively easy to prove, and would go after her for more serious medical crimes over time.
Could this be because they were secretly doing the testing using traditional lab testing machines (as described in Bad Blood)? Maybe that made it hard to prove any specific test was tainted.
It upsets me, but I wouldn't say "blows my mind". Prosecutors need to focus their strike where the charges are the strongest against well armored defendants. The people who suffered health-wise will now be able to more easily win civil suits, which will help them more than adding jail time to her impending swntence.
Makes me wonder how much of the rapidly established covid testing infrastructure around the world delivers actual results.
Fun fact: In some places like Singapore you don't even get the chance to test again to verify the result, you just serve your time in quarantine and then get back your "safe" status.
But even with the established PCR tests and with all the theatre around it, I doubt that this quantity of testing is being performed up to the highest standards and there are a bunch of "entrepreneurs" in this space too who may benefit from little supervision or consequences.
Blood tests have also been around decades and are taught to first year students. The devil is in the details.
In this case the people claiming COVID PCR tests were bogus were right. The US CDC has now admitted it. They recently changed their testing rules to stop PCR testing people at the end of their self isolation period because PCR tests can stay positive for up to 12 weeks whilst being clinical false positives, and thus (Rochelle Walensky's words) "we would have people in isolation for a very long time if we were relying on PCRs" [1]. Nothing changed to prompt this - no new science or discovery or anything like that. They just suddenly noticed something that random bloggers knew in April 2020: that COVID PCR positives don't imply you're infectious. Also note the use of the word "would" and not "did"; apparently she's in denial about what happened here.
There are lots of other issues with them beyond the cold positive problems of course. In theory PCR tests are precise because they triangulate the presence of at least three genes. In the beginning that's what they looked for. Over time that's slipped and they're now routinely reporting PCR tests as positive if they only detect a single gene. I took a PCR last week where the certificate stated outright they only looked for one gene.
This crops up in other ways. To detect Omicron, they were taking PCR tests that failed to trigger on one gene (thus technically should have been classed as negative) and then treated them as positives, being sent for sequencing to determine if they were Omicron or not. But only samples with Ct <= 30 were sent. They use this threshold when normally even 40 is accepted to be a positive (Ct is log scale so 40 is a very tiny level of detection compared to 30) because it turns out any sample that triggers over 30 is so destroyed it's unsequenceable. They can't even find enough viable virus to know what it is. That doesn't stop them classifying such samples as "infectious and must self isolate" normally, though.
And all that's before you even get to the cause/effect confusion the tests represent.
No, COVID PCR testing is a mess. The only reason Holmes is a convict and those guys aren't is that Holmes wanted to be the next Steve Jobs, so she worked entirely in the private sector. If she'd been selling COVID stuff to the government she'd have been fine, even doing the same things.
Probably for the best back in populations of close to 0 community incidence, low acquired immunity, and prior to the vaccines being available. Better to have a few hundred (few thousand?) people incorrectly spend time in quarantine, than to have community spread results in people/businesses being locked down.
That's the state right now with almost all of the population vaccinated.
I don't think it's for the best, it ignores any other medical conditions and offers no way to double check a result that could come from a dodgy test center.
I think once their is some population immunity, that you start to put more effort into confirming people really are infectious. It's partially why I don't think the CDC rules about not requiring a test after the fifth day really matters in most places in the United States - 20+% of people in the general population are already infected in places like New York. Wearing a mask for 5 days after quarantining for 5 days, while not ideal - ensures that our medical and logistic and other critical systems keep working for the next 3-4 weeks.
My layman's interpretation is that she willingly defrauded investors but did in fact deliver test results to the patients, albeit at a lower quality level than you would expect in the industry.
I think in the HBO documentary they say the unravelling started because of FDA complaints on the bloodwork being sub par. But I think you can't jail someone for 120 years because they did a shoddy product. Maybe the prosecutors simply went for the biggest bang for their buck?
There was pretty strong evidence she defrauded investors, lots of hard evidence of her making claims that we now know aren't true. I haven't heard much strong evidence that she intentionally defrauded patients though. I think it is totally possible that she lied to investors about Theranos's capabilities (ex. How many tests they could run), while still thinking that the tests they were running were accurate.
My guess about the discrepancy is that the lies she told investors were more brazen and came directly from her own mouth. She told investors and journalists that Theranos was working on military contracts (no such contracts ever existed), and she straight up told investors that no third party testing was involved in Theranos test results (a lie). She directly ordered employees to omit positive test results from investors' blood tests because she didn't have confidence in the results. This is all documented and she has admitted to much of it.
The lies told to patients and fraudulent test results could be (and were) denied by saying she wasn't aware of what was happening in the labs.
It's not that investors are more important in the eyes of the law or that patients weren't lied to, it's about the quality of the evidence available. Her not guilty verdicts do not mean she's innocent, simply that there wasn't enough evidence available to convince a jury.
I can’t find details of the specific wire fraud charges that she was found guilty of, but it is far easier to find and prove technical breeches of law (documents showing X was claimed to investors to obtain money when other documents show it wasn’t true) than proving intent or knowledge by the accused beforehand.
> Investors know that every dollar they put into a company could disappear
Is not it kinda different if you are being lied though? If Holmes were faking her accomplishments and you investments were depending on those then I don't see why this wouldn't be fraud
If the patients were still getting correct results (I assume they were still being tested, but in traditional ways) then it makes sense that they were not being scammed
This wouldn't be satisfying. It is hard to accept that one person was responsible for all of the dishonesty. Even if you were "only" the CFO or COO, you must know what is happening in the company. What about all of the scientists who must have knowingly been reporting results that were not consistent with best (or legal) practice?
There is obviously a culture issue with "white collar" crime and a large hole in most countries ability to correctly police what is and isn't acceptable. There are also questions around "business secrets" and how these were used to justify a lack of scrutiny or due-diligence.
As other posters have commented, since they were claiming results from much smaller samples, these "good" machines weren't given the amount of blood required for reliable results so this is also fraudulent and much worse imho because the people operating these machines must have know they were artifically amplifying samples.
Are Walgreen's customers given any sort of guarantee about the results?
I mean, if you could find someone that experience material loss from it, or death, I think they'd have a very legitimate chance to sue. It's not clear to me what promises Walgreen's is actually making though.
How does it work in a case where the customer's relationship is with a reseller, but the reseller was given false information from the test maker? Is only the test maker liable, or are both the reseller and test maker liable?
This is a criminal case, which follows stricter rules than civil action. The relationship between Holmes personally and the investors is clear enough, but I can see how any claim of her committing fraud against the patients is much subtler and much likelier to fail.
If protection of patient health was a critical component of the US healthcare system we would have a public option. We don't, so we don't. The only thing that is protected in the US is money.
In some cases they were, in other cases they tried their machines. Even when they used the real machines, it's unclear if they had enough blood, skilled operators, time and maintenance to generate accurate results.
> As I often write, this theory can turn anything bad that a public company does into securities fraud [...] The stock will drop (because the bad things are bad for the company); the shareholders will sue, saying “you said you were good, we believed you, we bought the stock, but you were bad and we lost money.” And so climate change and sexual harassment and lax customer data protections and mistreatment of orcas can all be transmuted into securities fraud.
"But a patient does not expect for their blood test results to be completely wrong."
The patient's state of mind, e.g., their expectations, is not an element of wire fraud. Only Holmes' state of mind is relevant; specifically, her intent.
"As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success.34 It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendants communications were reasonably calculated to deceive persons of ordinary prudence and comprehension.35 Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a nave victim.36 Nevertheless, the courts have long acknowledged the possibility of a puffing defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent.37 In any event, the question may be more clearly presented in the context of the defendants intent and the materiality of the deception.38"
"In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception."
Whether a patient expected that results might be inaccurate, or even whether a "reasonably prudent" person would have expected results might be inaccurate, is not necessarily a defence to wire fraud. Even if such a defence were asserted, the focus would still be on Holmes, her conduct and her intent, not the patient.
Iirc with Fyre Festival the dude got convicted of wire fraud for defrauding an investor, not for selling tickets to a sham festival. The joke was, screw the small people, that's fine, screw a rich investor, that's when you go to jail...
It's more that wire fraud can cover pretty much anything, making it a lot easier for the feds to get a conviction. Plus, the charges weren't related to the festival or its investors; it was for a whole different scammy "venture."
I'm not even sure they could be criminally charged for a sham festival since the festival did actually happen. I'd imagine that the whole thing turning out to be a complete wreck would probably be something that could be handled in a civil case.
A couple years ago the only reason I wasn't on a jury was because I wasn't one of the people whose name was randomly drawn, after they'd filtered out everybody who was unable to serve or had other conflicts that would make them unfit (such as 'visceral opinions about the nature of the charges').
Could I have gotten out of it? Sure. Could I have gotten out of it without lying under oath? I don't see how.
Didn't they use real lab equipment to conduct real tests? In which case the results would be ok, it just wasn't the tech she promised. Quite a while I read something about the details, so.
But then you must charge all the employees who did so, instead of her. Her crime is fraud because she told investor one thing and commanded employees another.
But it's not the army, they could refuse, they all did the tests and gave the false results back to humans, which is unfathomable in healthcare. She s eventually responsible but her job was on investor relationship.
Officers are not only allowed to, but required to, refuse illegal orders in the Army. Enlisted troops are allowed the "just following orders" excuse, but not officers who should know better.
Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans.
But a patient does not expect for their blood test results to be completely wrong. Her tests weren't giving false-negatives or false-positives, they were using lab techniques that we have known to be inaccurate for decades. She knowingly sold Walgreens on 1 test, and then performed a different test.
I need to sit down and properly inform myself about how the prosecutors fucked that up so badly.