Category Archives: Uncategorized

Warning Light by David Ricciardi

Warning LightWarning Light by David Ricciardi
My rating: 2 of 5 stars

The best that can be said about this comic book without pictures is that it’s not offensive (other than a bit of torture). At least there’s no swearing or pornographic sex scenes. The story line is trite and hackneyed and the writing is easily understood by the average sixth grader. The hero is a CIA analyst who, without any prior training as a field agent, is sent to Iran on an intelligence mission. Where have we heard that before? (Clancy’s novels, The Condor series, and many more). He gets captured and easily overpowers numerous armed soldiers and various guards, escapes from multiple confinements, and encounters various women, all of whom are drop-dead gorgeous. I won’t say more so as not to give spoilers, but, really, why not just give him a cape and a Fortress of Solitude.

One bugaboo of mine that appeared here was the portrayal of the bad guys, in this case the Iranian military. The superior officer tells the lieutenant that if he fails in his mission to find the fugitive, the prepared grave will be used for him. Right. An army really has great recruiting success when they execute any soldier who fails in an assignment. I’ve seen that so many times with schlock fiction and TV shows, usually with gangs, mafia, etc. where the leaders are so evil they even kill their own members and loyalists for the smallest failure. The ending is absolutely ridiculous and apparently is a setup for more in a series.

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Fueled by high winds

The local moronic news team ran a banner under the announcer talking about a brush fire in Suisun as “fueled by high winds.” Wrong. It may be fanned by winds but wind is not a fuel. The banner also misspelled Suisun as Suisin. C’mon guys, you can do better.

Another news reporter on this same fire story said that it was important to have “common terminalities.” Huh? We need terminal illnesses? Yet another on a different subject said that such occurrences are “far and few between.” Think about that one. It’s wrong, but sort of makes sense.

Rainbirds by Clarissa Goenawan

RainbirdsRainbirds by Clarissa Goenawan
My rating: 3 of 5 stars

Since I review a lot of mysteries, I should begin by saying that although there is a murder here, and it does get solved, the book is not really the sort of murder mystery that appeals to mystery fans. It’s really more of a psychological drama mixed with a bit of a romance novel. The main character, Ren Ishida, a recent Keio University graduate, decamps to a small town to investigate the murder of his beloved older sister. Ren is young and handsome, and apparently quite the roue. He takes a temporary job teaching English at a cram school, the same school where his sister had been working. He soon gets to know the people in his sister’s life, and gets to know himself a lot better, too.

The most interesting aspect of this book to me was the portrayal of Japanese life. I don’t know how accurate it is now, but it does not at all comport with the Japan I knew in the 1960s when I was an exchange student there. If accurate, it depicts a much more westernized country at least in the aspect of dating and sex than I knew back then. When I was there most university students still met their spouses through their parents and relatives, and premarital sex was almost unknown, at least among the upper class. If a boy asked a girl out, usually after a year or two working up the courage, it was almost tantamount to a marriage proposal. The characters in this book are as randy and casual about sex as American millenials.

The book is well-written, although stylistically it may sound a bit stilted to American ears. But that’s because it adheres to the semi-formal and somewhat dated manner of English speech that I know from my Japanese days, so it is authentic. In the end, I felt that the plot didn’t really lead anywhere very satisfying, but overall it was interesting enough to garner three stars.

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Why your running app is lying to you

Runners, hikers, geocachers, cyclists and many others use smartphone apps or dedicated GPS units to measure how far they’ve gone and to calculate their pace. What they don’t realize is that the apps and units routinely underreport the distance traveled, that is, tell you that you traveled a shorter distance than you actually did. Sometimes they overreport it. For competitive runners and others, this can be a serious drawback because it becomes difficult to judge your true pace, which you need to know for proper race planning. Why is this happening?

To understand this, first we need to examine how these apps and GPS units work. They all rely on the Global Positioning System (GPS) network of satellites which in turn relies on the WGS84 datum. What is that? For a detailed description, click the link. For our purposes, the important thing to know is that the system assumes the earth is a perfect spheroid, that is, it’s smooth like an egg or a billiard ball. Smoother  – perfectly smooth, in fact. Thus when you move from point A to point B, the algorithms at work in your app take the coordinates of those two points and measure the distance between them with the assumption you are moving over a smooth, level surface. It also assumes you moved in a straight line. Both of these assumptions are seldom true in real life.

If you don’t believe me, you can test this easily. Google Earth uses this same methodology and datum. Take the point in Yosemite Valley with these coordinates: . Paste these coordinates into Google Earth (GE): N37 43.700 W119 38.250. The elevation according to GE is 4143 feet. Now do the same with N37 43.830 W119 38.160. The elevation shows as 7129 feet. That point is atop El Capitan. Mark these with the stickpins from the top menu then measure the distance between them using the ruler tool. It shows a distance of about 900 feet. But the elevation (vertical) distance alone is almost 3000 feet. If you could fly from the first point to the second in a straight line, 900 feet is the distance your app would report to you. Clearly that’s too small and the reported pace would be too fast. Even though GE knows of the elevation difference, it doesn’t use that to compute distance between points. Your app is the same.

Consider the following cross-section where C is the mountaintop and A and B are the valley floor.

If you go from A to C the distance reported will be AB, not AC. But even AC would be wrong since you don’t travel the black line AC but that wiggly red line that goes up and down through the hills. All those elevation changes are not taken into account. The true distance would be more than AC but less than AB+BC.

Your app or unit can also overreport distances. Take, for example, a geocacher on a level trail in the forest. Elevation is not a factor. He stops at the location of the geocache which we’ll say is hanging in a tree, a particular, identifiable tree so he doesn’t move around much. He stands more or less in the same place for ten minutes trying to spot the cache in the leaves. The app or GPS unit, due to the tall trees and position of the satellites at that time, may have an accuracy of only 80 – 100 feet or so. As he stands there, the app thinks he moved 80 feet one way then 100 feet another direction every split second, or whatever its effective sampling rate is. It can report that he moved a quarter mile over those minutes while he actually stood in the same place simply because it’s not that accurate. Most of these issues do not apply to road-based apps because the programmers have access to accurate traveling distance over known streets and highways and use that rather than pure GPS data. At least, I think that’s true. If you run or cycle on measured tracks, just use a stopwatch, not your app. You can compute the pace yourself since you know the distance.

The accuracy of the unit is affected by many things including the quality of the unit, the terrain, and the location of the satellites at the time. Phone apps are generally less accurate than dedicated GPS units. Even on a known level road, a GPS-based unit/app can cut off curves if it doesn’t get a reading all the way around the bend. On a straight line path it can record your route as veering off to one side and the other, like a drunken sailor (no offense to the sailors out there). That could result in overreporting. If you really want to know the exact distance of your regular run, bike, or hike, use better methods like a well-calibrated bicycle odometer or at least average the same exact route many times and compare your app or unit to known distances like the local high school track to adjust the readings.

The Freeze-Frame Revolution by Peter Watts

The Freeze-Frame RevolutionThe Freeze-Frame Revolution by Peter Watts
My rating: 3 of 5 stars

Hard-core sci-fi fans will appreciate the imagination and credible-sounding future tech in this one. The Eriophora, a craft that seems more like a modified planetoid powered by a black hole, is hurtling around the Milky Way for hundreds of thousands of years. Its crew of 3000 souls is in frozen suspended animation most of the time, and are sometimes referred to as meatsicles. The Chimp, an automated AI bot, wakes one “tribe” of humans every so often to assist with its main mission, building gates in the galaxy that apparently connect in some way to other gates or even back to earth, in order to make it possible for the human diaspora to spread galaxy-wide. Any individual human is thus awake only a day or two and then returned to animation for another century or millennium until needed again. In this away they age very slowly. Everyone on board is thousands of years old, but biologically only, say, in their thirties. There are no star ship battles or aliens. It’s all humans.

A contingent of crew decides that life is not worth living under these conditions and seeks to rebel against the Chimp’s control. A rebellion of this sort poses many challenges since the conspirators are only awake a few days every century or three and the Chimp can see and hear everything. I liked the premise and Watts has a great touch with the jargon, although he admits in the Acknowledgments that it is all “handwavium.” This is a short novella, an easy read, and, I learned only from reviews, part of a series called the Sunflower cycle. You may want to explore that series and read them all in a different order. This is probably not the best one to start on if you plan to do that, but I enjoyed it as a stand-alone book.

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What3Words on the News

Once again it’s time to see what we can learn from the What3Words site about today’s news. There we learn that is totally at sea as is the Senate.judiciary.committee. A strange.hearing.ensued in Quebec, followed by a near San Antonio, Texas. Now it turns out that Flake.wants.investigation by the FBI in South Australia before a to occur in the desert of western China. I’ll never. understand.politics. Hmm, interesting location for that one … maybe it explains a lot.

Unhinged: An Insider’s Account of the Trump White House by Omarosa Manigault Newman

Unhinged: An Insider's Account of the Trump White HouseUnhinged: An Insider’s Account of the Trump White House by Omarosa Manigault Newman
My rating: 3 of 5 stars

As others have said, Omarosa is not an admirable character. She’s self-serving, narcissistic (like guess who), and to some at least a sell-out to her race. She also writes very poorly; more on that later. The book will be judged largely on the reader’s political bias, and there’s little to be said about that. But one thing I learned as an FBI agent is that just because a sleazeball is telling you something, that doesn’t mean it’s false. Some of my best, verifiable information came from scummy informants or from defendants who turned on their pals to avoid jail. The book spends way too much time discussing her childhood, her rise to riches through TV, and so forth, nearly all of it portraying her as some sort of poor girl made good through hard work (and winning beauty contests). When she gets to Trump, her accounts really don’t give much that’s new. She describes him pretty much the way he appears on TV – rambling, constantly contradicting himself, attacking others who have not been loyal to him at least in his view, lusting after women including his own daughter, spouting racist language (Mexicans are murderers and rapists, etc.) If she wanted to lie and dump on him, she could have come up with stuff beyond what he himself has done and said publicly. Her main criticism of him, if you want to call it that, is that he is in mental decline. It’s clear as she states at the end, that she still cares about him and considers him her mentor, the one who raised her to fame and riches, even though she recognizes his racism, not only against blacks but also against other minorities like Jews and Puerto Ricans. She is definitely vengeful. Even so, I find her observations credible not so much because I find her credible, but because so much of what she says is visible when he talks on television and in his tweets.

More revealing is how she portrays the Trump family and the Pence contingent. She said that we should think twice about impeaching Trump because three weeks later we’d be dying to get him back. She thinks Ivanka encourages her father’s handsy lust for her and uses it to her advantage. I’m not so sure about that. Ivanka seemed pretty creeped out to me when Trump went after her in public during the campaign and bragged how he would date her if she weren’t his daughter. She has some nice things to say about Melania, though, perhaps surprisingly.

No one is all that interested in this book as a literary piece, but I must state that it is badly written and apparently totally unedited. It’s replete with grammar and spelling errors. I won’t bother to list those, but more disturbing are some of the logical brain benders that made it to print. For example: “Walking into the briefing was like coming through the tunnel of a visiting team’s field.” Huh? She said this about entering a meeting of people she thought were hostile to her. The visiting team’s field would be empty because, well, it’s visiting, not at home that day. If she meant she was in the position of a visiting team, she would be walking into the home team’s field. She repeatedly mentioned that she was like a guardrail protecting the world from the “Trump train.” A train with a guardrail? I don’t think it would do much good stopping a train, and she didn’t.

With all that said, it’s probably a viable and useful insider look at today’s White House and will end up as a source for future historians, so I recommend reading it if you care about what’s happening there.

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Cipher analysis – the Condex

A few years ago I developed a statistical test called the Normor test that measured how closely the letter frequencies of a cipher resembled normal letter frequency. This turned out to be quite useful as a diagnostic tool for identifying the type of an unknown cipher. One shortcoming of that test is that it does not distinguish between transposition types. They all have the same Normor score as the plaintext. It occurred to me that something similar could be devised that measures contact data to see how closely that data looks like normal contacts. This might possibly be useful in distinguishing between transposition types or even other types.

First I had to write a program that tabulated contact data in a usable form. This proved to be a bit of a programming challenge for me, but I succeeded in writing a program that put the data in a form similar to the chart appearing on page 220 of Elementary Cryptanalysis (Elcy) by Helen Fouché Gaines. I used the program to produce the following chart from dozens of novels, speeches, and other English-language materials downloaded from


This differs slightly from the Elcy chart in that I limit the contacts to five on each side, but the data is much more inclusive since it is based on much more data. Use the central letter and look outward to see the letters that most frequently immediately precede (left side) or follow (right side) that central letter. For example, the letter that most often contacts Y on the left is L. The second most frequent one is R. Similarly on the right the most frequent contact is O, then S.

I use this table as my normal English standard. The program was then run on some sample ciphers. Since they are typically too short to fill both sides of the table, I do that with periods. Here’s a columnar cipher and the resulting table:


nlhti a ibefh
.roea b drsy.
….. c …..
.pnib d hmtu.
soert e tsenb
migea f eotu.
.omhe g fpst.
lidas h oaegi
hetna i adefh
….. j …..
….n k m….
.tlas l aehlv
.sked m efgt.
ihtse n oiade
ashon o soebg
…ng p di…
….e q a….
hebas r eabnr
baseo s sehln
gfdae t eainh
.sfed u hnrt.
….l v h….
..tre w his..
….. x …..
….b y s….
….. z …..

When two letters share the same frequency they are listed in alphabetical order from inside out. This contact chart could be useful solving many ciphers such as cryptograms by hand, but my aim was to measure how much this set of contacts matches the standard above. After some experimentation I found the best way to do this was to go row by row and take each character in this target ciphertext that appears to the left or right of the central letter and take the difference between its position in this lower chart and its position on the same side of the same row in the normal chart and keep a running total.  For example, for row B, the letter A is the most frequent left contact in both charts so the difference in positions is 0. For the right side, the D is most frequent in the cipher but doesn’t appear in the normal, so I add 5 for each such instance. For the K row, N is in position 1 in the cipher, but 4 in the normal chart, so the difference of 3 is added. When all 26 rows are totaled, I divide by the total number of letters appearing on the right and left sides of the cipher (ignoring periods) to arrive at an average position difference. I call this number the Condex for Contact Index. If the cipher contacts exactly matched the normal chart, the total (and average) would be 0. If none of them appeared at all in the normal list, it would be 5. In short, the higher the score, the less normal.

I found that English plaintext averaged in the low 2 range, i.e. 2.0 to 2.25. I tested paragraphs of some novels and the highest average score was 2.487, with a single high of 3.06 and a low of 1.74. My file of ACA solutions averaged higher, 2.79, but bear in mind that it contains very non-standard constructions like the Patristocrat specials and Playfair solutions with X’s between the doubled letters. When I tested several transposition cipher types (testing hundreds to thousands of each type) I found they averaged in the mid- to high 3’s. In order from low to high they were Amsco, Myszkowski, Columnar, and Swagman. The average score and ranges of the latter three were nearly identical, but the Amsco was noticeably lower, which makes sense since the typical Amsco ciphertext consists of about 2/3 normal digraphs. It averaged 3.45. Amscos were the only ciphers I tested that had scores below 3, going as low as 2.8. The lowest among the others was one Swagman con at 3.15. Thus the Condex could be helpful in identifying an unknown Amsco. However, I must note that there are other easier ways to do that such as counting common digraphs.

For non-transposition types the scores were much higher, both the average scores and the maximum and minimum scores. I tested the following types: Bifid, Two-Square, Foursquare, Fractionated Morse, Quagmire,  Bazeries, and Vigenere. I used Bion’s 2-square/4-square data for those types and generated my own for the others. The differences in ranges of scores were so slight as to be meaningless. The averages ranged from 4.12 to 4.29. The Two-Square had the biggest variation and some of the lowest ones dipped down into the mid-3’s. The Condex might be useful in distinguishing between transposition and substitution or fractionation types, but that, too, is more easily and accurately done with the Normor or other tests.

The algorithm is too computation-heavy to be used in any iterative solving process like hill-climbing and I don’t see how it would help there, anyway. Although I don’t see any future as a type diagnostic tool for the Condex, the tool is at least useful for some hand-solving and might prove useful for tabulating data for foreign languages. Anyone who wants to experiment with it, contact me and I’ll provide you with my Windows executable program. There’s a contact link in the top menu.

These results are valid only for text lengths in the typical range for ACA ciphers. I used a minimum of at least 100 letters for my testing and anything below that becomes almost random, even for plaintext. The maximum length was probably around 300 letters. For very large data samples of English, for example, the score will drop virtually to zero.

More Google NGram tales

Once again I am posting stories concocted entirely by the Google NGram site. I started each sentence with three or four words and an asterisk, as indicated by the underlines, and Google provided the next word by listing whatever most often came next following those exact words in the millions of books that it has scanned. I then repeated, dropping the first word and using the new word until a full sentence was achieved. Thus each word is a function of the preceding three or four words. Voila!

The President might have dissolved it by withdrawing the army and navy. His wife never knew whether he was in the habit of doing so. Congress reacted by passing the gas through a solution of potassium iodide and starch. Then the Supreme Court ruled that the state had a duty to perform in the future as a result.

Her beauty was not of the same kind of thing as a matter of fact. It was even more important than the other two groups. When he saw her, he was so sorry for her. That’s why she‘s so upset about the death of the body.

Something in the Water by Catherine Steadman

Something in the WaterSomething in the Water by Catherine Steadman
My rating: 4 of 5 stars

I normally don’t like books read by the author nor books written by actors or other celebrities, but this book is an exception to both rules. The author is an actress, a very accomplished one from shows like Downton Abbey, so her voice acting on the audiobook was superb. Maybe I’m just a sucker for a posh British female accent but I loved hearing her read. The story is a ripping good thriller, too. I wouldn’t call it a mystery. It doesn’t begin with a murder, or at least not an obvious one, but it opens with Erin, our heroine, digging a grave. After that and returning to the actual start of it all, it’s in straight chronological order, which I much appreciated. Erin and her husband honeymoon in Bora Bora where they find something in the water while out scuba diving, something that changes their lives. It’s valuable, but maybe too valuable – something wanted by some very bad people. Are they safe? Do they keep it? Read the book to find out.

There was one stylistic quirk that bothered me. Erin narrates the story in the first person and is continually second guessing herself. “Now we’re safe. We are … aren’t we?” “I’m an honest person. I am. Right? Or am I?” That sort of thing. I think the author was trying to throw some suspense into everything and it only became an irritating affectation, but only a minor one. It’s a worthy read.

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Our Ignorant Newsies – Axe to Pick

My wife caught this one while listening to the radio. I don’t know who the commentator was, but my wife usually listens to PBS. Someone reportedly had “an axe to pick” with someone else. I suppose that’s much like having a bone to grind, but it sounds a bit more violent. They both sound pretty violent when you think about it – not very PBS-like. They should take a pickaxe to both phrases.

Ghost Fleet by P.W. Singer and August Cole

Ghost Fleet: A Novel of the Next World WarGhost Fleet: A Novel of the Next World War by P.W. Singer
My rating: 3 of 5 stars

This naval war novel is very much in the thematic style of Tom Clancy. The title refers to an imagined scenario where most of the digital weapons the U.S. has, such as GPS satellites and chip-dependent aircraft, have been neutralized by a Chinese malware package. Chinese and Russians are allied against America. War ensues and the Chinese “Directorate” dominates at first. America thus turns to its older fleet of warships and planes, the so-called ghost fleet or mothball navy floating uselessly now in real life in Suisun Bay, to fight back.

It’s a clever scenario. The writing, however, doesn’t live up to the premise. The first 300 pages are a slog. I had trouble keeping everybody straight. There are too many characters and settings. Bad Chinese and good Chinese-Americans. Good Russians and bad Russians. Two characters, father and son, are named Simmons which causes additional confusion. The scenes and settings are very short jumping all over the place. Zillions of military acronyms and alphabet soup weapons system names are bandied about endlessly.

It takes way too long to get to the actual battle action. Despite this, the final 100 pages or so are pretty exciting and make it worth the three stars. I was surprised at the political correctness for such a macho-themed book. Half the military personnel are women (often with male-sounding names or nicknames, which only added to the confusion). A gay officer is even thrown in for a cameo. I gave up on the audiobook the first time I tried this one, and would have given up on it entirely, but since it was a selection for my book club I forced myself to get the print book and read it through. In the end, it was okay but I can’t really recommend it.

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Paper Ghosts by Julia Heaberlin

Paper GhostsPaper Ghosts by Julia Heaberlin
My rating: 3 of 5 stars

I was leery of this one at first since it was supposed to be about serial killings. I expected some gore and sadism. It was indeed about serial killings, but it did not describe them in detail or with much gore. The story is told by a young woman using different names whose sister Rachel was killed. Our protagonist believes the killer is a mentally disturbed man who used to be a famous photographer and who had once taken photos of her family and other murdered girls, a man who was once tried and acquitted of the murder of one of them. She pegs him for three unsolved murders and sets about on a long-term plan to lure him from the assisted living home on the pretense she is his daughter (learned only through a DNA match). The book is the tale of their journey together the the rural south. The book held my interest and the author captures the feel of the country setting well.

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BAD BLOOD – Holmes indictment

Here’s the summary of the indictment from the U.S. Attorney’s office in San Jose.

Friday, June 15, 2018

Theranos Founder and Former Chief Operating Officer Charged In Alleged Wire Fraud Schemes

Elizabeth Holmes and Ramesh “Sunny” Balwani Are Alleged To Have Perpetrated Multi-million Dollar Schemes To Defraud Investors, Doctors, and Patients.

SAN JOSE – A federal grand jury has indicted Elizabeth A. Holmes and Ramesh “Sunny” Balwani, announced Acting United States Attorney Alex G. Tse, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett; Food and Drug Administration (FDA) Commissioner Scott Gottlieb; and U.S. Postal Inspection Service (USPIS) Inspector in Charge Rafael Nuñez.  The defendants are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud.  According to the indictment returned yesterday and unsealed today, the charges stem from allegations Holmes and Balwani engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients.  Both schemes involved efforts to promote Palo Alto, Calif.-based Theranos.

Holmes, 34, of Los Altos Hills, Calif., founded Theranos in 2003.  Theranos is a private health care and life sciences company with the stated mission to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing blood, and interpreting the resulting patient data.  Balwani, 53, of Atherton, Calif., was employed at Theranos from September of 2009 through 2016.  At times during that period, Balwani worked in several capacities including as a member of the company’s board of directors, as its president, and as its chief operating officer.

According to the indictment, Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’s blood testing laboratory services, even though the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests.  The tests performed on Theranos technology, in addition, were likely to contain inaccurate and unreliable results.

The indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors.  Specifically, the defendants claimed that Theranos developed a revolutionary and proprietary analyzer that the defendants referred to by various names, including as the TSPU, Edison, or minilab.  The defendants claimed the analyzer was able to perform a full range of clinical tests using small blood samples drawn from a finger stick.  The defendants also represented that the analyzer could produce results that were more accurate and reliable than those yielded by conventional methods—all at a faster speed than previously possible.

The indictment further alleges that Holmes and Balwani knew that many of their representations about the analyzer were false.  For example, allegedly, Holmes and Balwani knew that the analyzer, in truth, had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines.

“This district, led by Silicon Valley, is at the center of modern technological innovation and entrepreneurial spirit; capital investment makes that possible.  Investors large and small from around the world are attracted to Silicon Valley by its track record, its talent, and its promise.  They are also attracted by the fact that behind the innovation and entrepreneurship are rules of law that require honesty, fair play, and transparency.  This office, along with our other law enforcement partners in the Bay Area, will vigorously investigate and prosecute those who do not play by the rules that make Silicon Valley work.  Today’s indictment alleges that through their company, Theranos, CEO Elizabeth Holmes and COO Sunny Balwani not only defrauded investors, but also consumers who trusted and relied upon their allegedly-revolutionary blood-testing technology.”

“This indictment alleges a corporate conspiracy to defraud financial investors,” said Special Agent in Charge Bennett.  “This conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives.”

“The conduct alleged in these charges erodes public trust in the safety and effectiveness of medical products, including diagnostics. The FDA would like to extend our thanks to our federal law enforcement partners for sending a strong message to Theranos executives and others that these types of actions will not be tolerated,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations.

“The United States Postal Inspection Service has a long history of successfully investigating complex fraud cases,” said Inspector in Charge Rafael E. Nuñez.  “Anyone who engages in deceptive practices should know they will not go undetected and will be held accountable.  The collaborative investigative work on this case conducted by Postal Inspectors, our law enforcement partners, and the United States Attorney’s Office illustrates our efforts to protect both consumers and investors.”

The Indictment Alleges That Doctors And Patients Were Defrauded

The indictment alleges Holmes and Balwani defrauded doctors and patients by making false claims concerning Theranos’s ability to provide accurate, fast, reliable, and cheap blood tests and test results, and through omissions concerning the limits of and problems with Theranos’s technologies.  The defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests, including the tests for calcium, chloride, potassium, bicarbonate, HIV, Hba1C, hCG, and sodium.  The defendants nevertheless used interstate electronic wires to purchase advertisements intended to induce individuals to purchase Theranos blood tests at Walgreens stores in California and Arizona.  Through these advertisements, the defendants explicitly represented to individuals that Theranos’s blood tests were cheaper than blood tests from conventional laboratories to induce individuals to purchase Theranos’s blood tests.

Further, the indictment alleges that based on the defendants’ misrepresentations and omissions, many hundreds of patients paid, or caused their medical insurance companies to pay, Theranos, or Walgreens acting on behalf of Theranos, for blood tests and test results, sometimes following referrals from their defrauded doctors.  In addition, the defendants delivered to doctors and patients blood results that were inaccurate, unreliable, and improperly validated.  The defendants also delivered to doctors and patients blood test results from which critical results were improperly removed.

The indictment describes a number of schemes that defendants allegedly employed to mislead investors, doctors, and patients.  For example, with respect to investors, defendants performed technology demonstrations during which defendants intended to cause potential investors to believe blood tests were being conducted on Theranos’s proprietary analyzer when, in fact, the analyzer really was running a “null protocol”  and was not testing the potential investor’s blood.  Similarly, defendants purchased and used commercially-available analyzers to test patient blood, while representing to investors that Theranos conducted its patients’ tests using Theranos-manufactured analyzers.

 The Indictment Alleges That Investors Were Defrauded

According to the indictment, the defendants also allegedly made numerous misrepresentations to potential investors about Theranos’s financial condition and its future prospects.  For example, the defendants represented to investors that Theranos conducted its patients’ tests using Theranos-manufactured analyzers; when, in truth, Holmes and Balwani knew that Theranos purchased and used for patient testing third party, commercially-available analyzers.  The defendants also represented to investors that Theranos would generate over $100 million in revenues and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenues in 2015 when, in truth, the defendants knew Theranos would generate only negligible or modest revenues in 2014 and 2015.

Further, defendants allegedly represented to investors that Theranos had a profitable and revenue-generating business relationship with the United States Department of Defense and that Theranos’s technology had deployed to the battlefield when, in truth, Theranos had limited revenue from military contracts and its technology was not deployed in the battlefield.  In addition, the defendants represented to investors that Theranos would soon dramatically increase the number of Wellness Centers within Walgreens stores when, in truth, Holmes and Balwani knew by late 2014 that Theranos’s retail Walgreens rollout had stalled because of several issues, including that Walgreens’s executives had concerns with Theranos’s performance.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The indictment charges each defendant with two counts of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and nine counts of wire fraud, in violation of 18 U.S.C. § 1343.  If convicted, the defendants face a maximum sentence of twenty (20) years in prison, and a fine of $250,000, plus restitution, for each count of wire fraud and for each conspiracy count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Both defendants appeared today before U.S. Magistrate Judge Susan van Keulen for their initial appearances.  The matter was assigned to the Honorable Lucy H. Koh, U.S. District Judge, for further proceedings.

Assistant U.S. Attorneys Jeff Schenk, Robert S. Leach, and John C. Bostic are prosecuting the case with the assistance of Laurie Worthen and Bridget Kilkenny.  The prosecution is the result of an investigation by the FDA Office of Criminal Investigations, the FBI, and the US Postal Inspection Service.

BAD BLOOD by John Carreyrou part 2

For part 1, see my previous post.

Apparently Elizabeth Holmes has a certain charisma. The book quotes several people as remarking how striking her blue eyes and unusually low her voice were. She can be charming when she wants to be, apparently. So there are many who may be inclined to take her side. Don’t be one of them. She may have Svengali-like drawing power, but so did David Koresh and Jim Jones. Don’t drink the Kool-aid.

Holmes and Balwani have been indicted on wire fraud and other charges by the U.S. Attorney’s Office in San Jose. I know from first-hand experience how difficult it is to get that office to prosecute a white collar case. Jurors have difficulty understanding such cases. Having a loss value of millions is only a starting point. You also need absolutely overwhelming proof of guilt of a federal crime before they’ll even take it to a grand jury. I’ve testified before a federal grand jury myself many times. Indictment is usually not a tough hurdle since you only need a two-thirds majority and all the evidence comes from the prosecution, but I also know that some jurors are simply hostile to the government in general or the FBI in particular. Others ask wacky, irrelevant questions and yet others simply aren’t smart or educated enough to understand the evidence or legal instructions. At trial, though, it only takes one juror to hang a jury. One thing the grand jury doesn’t rely on, though, is reporting from newspapers or magazines. Everything is verified through FBI investigations, interviews, records searches, and so forth.  So if these two were indicted, the substance of the case is there. That doesn’t mean they will be found guilty at a trial or even should be found guilty. That will depend on the trial evidence and the legal instructions from the judge. I also have great confidence in the regulatory agencies that have shut down Theranos. Those people are dedicated to public health and take their responsibilities seriously. If they found the lab procedures and equipment bad enough to shut the place down, it was a danger to public health. For all these reasons and more, I believe the book reports accurately.

I found it interesting that this case really has no political slant to it. Holmes herself was chummy with the Clintons and Obamas, and was a big supporter of Hillary Clinton in 2016, yet her board of directors was packed with conservative Republicans including George Shultz and Henry Kissinger. Fox News owner Rupert Murdoch was the single largest investor. She was able to bamboozle leaders of both parties. Most disturbing to me personally, though, were the dirty tactics employed by David Boies, the so-called super lawyer. His intimidation tactics and harassment were very instrumental in silencing many employees or others. He should at the least be disbarred and, I hope, indicted himself. He, too, was a director with a very large equity stake in the company. They were all lusting after that billionaire title. For shame.

BAD BLOOD by John Carreyrou

Everyone should read this fantastic book. Before I go farther I should point out that this is no ordinary review and my particular knowledge and experience make it necessary to tell you something of myself. I’m a retired FBI agent and attorney in Silicon Valley. I used to work on high-tech cases much like the one in the book. I also litigated in both local and federal courts and served as a judge (pro tem) for several years. I was the first to investigate Raj Rajaratnam, the billionaire hedge fund manager who stole insider information and was convicted of insider trading. He got eleven years. I could cite other cases, but the point is, I know what I’m talking about in this particular area. I’ll post this first section as a review, but the full writeup will be on my blog.

So, everyone who ever has had a blood test or anticipates ever having one should read it. Everyone in Silicon Valley in the tech/startup world should read it. But don’t read it just because you should; it is just the best, most engrossing, most entertaining book I’ve read in years. I read it in two days and would have done it quicker if my daughter and her husband hadn’t been visiting from out of state. If it were fiction no one would have believed it. It would seem too far-fetched. I’m also a skeptic of what’s reported in the press or in tell-all books since I’ve seen reporting that is slanted or simply inaccurate on cases of mine. But what I know from first-hand experience tells me that this author, an investigative reporter for the Wall Street Journal (WSJ), has uncovered the truth in all its frightening, disgusting ugliness. The story he tells here is exactly what I have learned to exemplify the Silicon Valley milieu in which I live. It is a story of an egomaniacal young woman who envisioned herself as the next Steve Jobs, as a superstar tech entrepreneur, as the the first self-made female billionaire high-tech corporate genius. Elizabeth Holmes, the 19-year-old Stanford dropout who is the central figure in the book, founded Theranos, a company she claimed could perform hundreds of blood tests from a few drops of blood drawn with a thumb stick, thus revolutionizing health care.  It is a story of unbridled greed, lying on a pathological scale, of high officials like former Secretary of State George Schultz, retired generals, Stanford professors and others who betrayed their company, its shareholders, the patients and doctors who relied on the faulty tests Theranos produced, all for the promise of incredible riches. It’s a story of secrecy, intrigue, and intimidation. I’ll stop here for the book review sites because my next posts will contain spoilers. I’ll explain there why and how I know this book to be true and reliable. For now, I’ll just say read this riveting, superbly-written, true story. You won’t regret it.

A Howl of Wolves by Judith Flanders

A Howl of Wolves (Sam Clair, #4)A Howl of Wolves by Judith Flanders
My rating: 4 of 5 stars

Sam(antha) Clair makes her fourth appearance in this mystery. Set in London and involving the theater and theater people (make that theatre since this is British through and through), the plot makes a cracking good start with the director of Thomas Kyd’s 16th Century play The Spanish Tragedy being found suspended, dead, and in costume and stage makeup, when the curtain opens the third act. Based on other reviews I’ve read, this isn’t the first theater-based mystery from this author.

Sam narrates in the first person with a witty stream of mostly self-effacing barbs. The author is a master of hyperbole. I would say mistress, but that sounds too salacious so I’ll settle for the sexist “master.” But then, a sexist master sounds salacious, too. Oh well. Anyway, every description is cleverly overstated. Sam has known earthworms with more upper body strength than she has. She picks up enough Chinese food to feed a few battalions. Her solicitor (that’s a “lawyer” for us Yanks) mother Helena is so formidable the mere tappety-tap of her heels produces “frissons of fear even in the hearts of Supreme Court Judges.” You get the idea. The style is lighthearted but there’s still a rather good murder mystery there. Sam has the advantage of having a husband at Scotland Yard and the aforementioned bulldog lawyer-mom to sweep away those niggling obstacles to crime-solving, like access to confidential lab results, interview notes, and other police material. If you’re looking for blood and guts, gunfights, and passionate sex scenes, you won’t find them here (except quite a bit of fake blood in the play, apparently).

The pace could have been faster and the ending less mundane, but the witty style kept the story going well enough to suit me. The aha moment was too contrived for my taste, dependent on Sam seeing something the reader couldn’t see, or at least which isn’t described well enough for the reader to pick up on as the critical clue. That puts this mystery in the “unfair” class in my book, but the intelligence of the writing style and the inside knowledge of the theater were more than enough to overcome that.

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