Holmes and Balwani verdicts

Some people are having trouble reconciling the verdicts in the cases of Elizabeth Holmes and Sonny Balwani. I don’t see a problem with the verdicts, and this explanation may help you understand them.

Both were charged with twelve counts of federal crimes. Counts one and two were conspiracy counts – one conspiring to defraud investors and the other to defraud doctors and patients. Both were convicted of the first count. Only Balwani was convicted of the second. They acquitted Holmes on the second count. That’s the only inconsistency that’s difficult to explain, since the allegation was that they conspired together, but the explanation given below on the remaining counts sheds light on it.

All the other counts were wire fraud counts. Six of those were for defrauding investors and three were for defrauding doctors or patients. One of the patient counts was thrown out by the court in the Holmes case due to a technical error by the prosecution, so Holmes was not tried on that one. Holmes was acquitted of the other two patient counts. Balwani was later convicted of all three, so I presume the prosecutors corrected their error on that one count. A juror from Holmes’s trial has said that the jury did not think Homes intended to provide patients with bad results, i.e. to defraud them. Knowing there could be problems with the test is not enough. She also did not communicate with the doctors or patients directly, thus the doctors or patients did not rely on her statements, a necessary element of the offense. Apparently the jury in Balwani’s case found he did. This can be explained by evidence showing different levels of involvement by the two defendants, or by different evidence presented in Balwani’s trial. One important witness testified only in Balwani’s trial.

That leaves the six investor counts. Holmes was convicted of three while Balwani was convicted of all six. But Holmes was NOT acquitted on those other three. The jury deadlocked on those. So it is not really a significant difference there. For all we know the deadlock was 11 – 1 for conviction on those remaining three counts. There may have been one or two jurors with a bit more skepticism than others on that jury. In addition, different investors heard different presentations and communicated via phone or email to different extents with the two defendants, so it is really quite normal for one to be found guilty and the other not on any specific charge.

Holmes is scheduled to be sentenced in October, Balwani in Novemer. I believe she may actually get a longer sentence, primarily because she testified. She denied the charges on the stand and did not accept responsibility. To the contrary, she testified falsely, obstructing justice. The same judge heard the evidence in both cases and may very well find her conduct was more egregious than his even though she was guilty on fewer counts. He can even take into account the evidence of harm to patients and doctors despite her acquittal on those counts. Even if he accepts that she did not intend to provide false results, there was plenty of uncontradicted evidence that her actions or negligence caused the harm during the course of her crime. Unintended harm, if it’s reasonably foreseeable, can be used in sentencing. I doubt he will cite that as contributing to his sentencing decisions, but it’s difficult for him to dismiss it entirely in his thinking.

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