U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani • Hacker News Board

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#441

Post by austenallred » Sat, Jun 16, 2018, 2:26 PM UTC

recharged93 wrote: post #307

SilverSlash wrote: post #298

Earlier quoted context omitted.

How about Tyler Shultz? The main whistleblower and grandson of George Shultz. He was working at Theranos and realized they were a giant fraud. He lost his job, was harassed by lawyers, he and his parents almost had to sell their house to pay legal fees, his grandfather wouldn't speak to him anymore, etc.

Basically the gov't employee, son, and likely others we don't know about lost their jobs and even blacklisted. I say 90% of VC back companies are blowing smoke to the endpoint investor, public and consumer. 100% of those companies have miracle products that scale forever and work... In 1 specific ise case: the demo booth. They oversell. I see 2 out of 10 startups bring a viable product to the global 2000 table. Space…

The difference is that SpaceX realizes the goal is aspirational, and isn’t signing people up for doomed rides to Mars right now.

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#442

Post by rayiner » Sat, Jun 16, 2018, 2:28 PM UTC

dragonwriter wrote: post #439

fitchjo wrote: post #437

Earlier quoted context omitted.

Are you implying that the bankers should go to jail for the misrepresentations made by the applicant because they didn’t exercise an “appropriate” level of diligence?

No, IIRC from reports years back, there is considerable evidence that this kind of fraud was not often not initiated by applicants but encouraged by lender agents, who were in turn encouraged by lender policies and incentive structure, which was set by lender executives. This isn't lack of diligence, this is setting a policy with reasonably foreseeable consequences.

You lost the jury at “lender policies and incentive structures.”

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#443

Post by mlvljr » Sat, Jun 16, 2018, 2:28 PM UTC

jakobegger wrote: post #384

briandear wrote: post #368

Earlier quoted context omitted.

So should jail sentences be done the same way? If I am in jail 10 days, I lose a hell of a lot more money than some bum spending the same 10 days. So the cost of jail is much greater to me on a per day basis. This “based on wealth” concept is fine, assuming that also applies to jail sentences. We can’t expect an egalitarian scheme for fines if we neglect the same consideration for jail. Assuming our goal is inflictin…

The idea of jail is that your personal freedom is taken away as punishment for a number of days. How much opportunity cost those days have, or how much money you lose as a result of your jail time, is irrelevant. The punishment is taking away your personal freedom. Jail time is a fair punishment: Nobody likes having their freedom taken from them. There is no need to scale it. But its different for fines. If you drive…

Make it couple percent of the cost of the car driven :)

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#444

Post by amorphid » Sat, Jun 16, 2018, 2:28 PM UTC

Amezarak wrote: post #419

tomxor wrote: post #410

Earlier quoted context omitted.

If they don't care about driving and they were being a shit driver then didn't the law also work? either they are forced to drive like less of an idiot or they don't drive... I don't really care if they get a professional driver - good, less dead people on the road.

Right, but then you're worried about getting bad drivers off the road, not proportionate impact. For a poor person, losing their license (and not continuing to drive anyway) is devastating and can mean the impossibility of keeping a job or even raising their kids. For a rich person, it just means they can't enjoy the pleasure of driving themselves around. You were talking about equalized impact to start with, I reall…

Do you have a 1 or more recommendations for how to fairly treat poor who are also crappy drivers? Poverty sucks, and I don't have any bright ideas that would keep poor+bad drivers behind the wheel.

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#445

Post by filleduchaos » Sat, Jun 16, 2018, 2:29 PM UTC

rayiner wrote: post #383

mhneu wrote: post #238

Excellent news for American society. “The Chickenshit Club” by Eisinger recently explained why the lack of criminal charges had emboldened white collar crime. Basically, individuals need to have the risk of criminal charges if they do something very egregious - they need to have skin in the game. The US Justice Dept has in the past two decades largely only been fining corporations. And so companies estimate risk and…

> Too bad the US can’t retrospectively prosecute bankers for 2008 and claw back their size-subsidized, low risk premium profits. The Theranos case clearly illustrates why. Fraud by the top executives of a company, who lied about what their technology can do to raise a bunch of money, and endangered patients in the process--that is a story you can explain to a jury. Even if you think there are "bankers" (curiously, yo…

> You shouldn't be able to put people in jail for a crime you can't explain to a group of a dozen ordinary people.

This sounds so wrong. Why shouldn't people whose only virtue (related to the case) is being smart enough to come up with complex crimes go to jail? Are we forgetting just how, well, average the average person is?

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#446

Post by tptacek » Sat, Jun 16, 2018, 2:30 PM UTC

rayiner wrote: post #442

dragonwriter wrote: post #439

Earlier quoted context omitted.

No, IIRC from reports years back, there is considerable evidence that this kind of fraud was not often not initiated by applicants but encouraged by lender agents, who were in turn encouraged by lender policies and incentive structure, which was set by lender executives. This isn't lack of diligence, this is setting a policy with reasonably foreseeable consequences.

You lost the jury at “lender policies and incentive structures.”

"Bank employees were instructed to tell prospective clients to lie about their income, drastically, and sometimes helped them do it. Bank employees did this because when people lied about their income, the bank made more money, even though doing so put people at financial risk."

I'm not sure this is a hard case to make.

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#447

Post by tptacek » Sat, Jun 16, 2018, 2:39 PM UTC

rayiner wrote: post #383

mhneu wrote: post #238

Excellent news for American society. “The Chickenshit Club” by Eisinger recently explained why the lack of criminal charges had emboldened white collar crime. Basically, individuals need to have the risk of criminal charges if they do something very egregious - they need to have skin in the game. The US Justice Dept has in the past two decades largely only been fining corporations. And so companies estimate risk and…

> Too bad the US can’t retrospectively prosecute bankers for 2008 and claw back their size-subsidized, low risk premium profits. The Theranos case clearly illustrates why. Fraud by the top executives of a company, who lied about what their technology can do to raise a bunch of money, and endangered patients in the process--that is a story you can explain to a jury. Even if you think there are "bankers" (curiously, yo…

I don't know that this is a very persuasive argument. We have all sorts of complex, technical "laws" (both in statutes and agency rules extending those statutes). A lot of them are important and sensible.

In a field like finance, once you make something illegal, doesn't the prosecution's argument pretty much come down to:

1. Under the US code, foo is illegal. That's the rule that everybody working in this field has to play by.

2. The defendant fooed, flagrantly and with relish, and in the process made umpteen zillion dollars.

3. At all times, the defendant made it clear that they knew fooing was wrong. For instance, when discussing fooing, they logged into each other's email accounts and wrote drafts rather than sending emails, and shredded their birth certificates after discussing foo.

4. As a result of all this reckless fooing, which we remind you is illegal in the US, 3,392 people lost their houses.

A jury can't follow this argument?

An argument I've read more frequently is that the laws around this stuff aren't clear enough, so that a defense attorney can hopelessly muddle up a case by arguing "we weren't fooing, we were clearly barring". We could make the laws a lot more clear! But in doing so, we'd potentially disrupt the economy, and so it's a tricky balancing act.

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#448

Post by gph » Sat, Jun 16, 2018, 2:43 PM UTC

tptacek wrote: post #446

rayiner wrote: post #442

Earlier quoted context omitted.

You lost the jury at “lender policies and incentive structures.”

"Bank employees were instructed to tell prospective clients to lie about their income, drastically, and sometimes helped them do it. Bank employees did this because when people lied about their income, the bank made more money, even though doing so put people at financial risk." I'm not sure this is a hard case to make.

>Bank employees were instructed to tell prospective clients to lie about their income

But is there explicit proof of this? I didn't think there was, but maybe I'm wrong. I thought at best the argument would be more like:

"Bank executives set up incentives for their employees that they knew would encourage fraudulent behaviour."

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#449

Post by resentfuljoe » Sat, Jun 16, 2018, 2:56 PM UTC

http://www.paulgraham.com/founders.html

4. Naughtiness

Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination.

Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications.

Re: U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani

#450

Post by arethuza » Sat, Jun 16, 2018, 3:01 PM UTC

tomxor wrote: post #404

dghughes wrote: post #303

Earlier quoted context omitted.

Even speeding tickets or anything most normal people would find a burden are nothing to super rich. But making few days in jail mandatory is a major deterrent. Then again even people texting and driving are not swayed by fines. In my region of the world a $3,000 fine is not a deterrent to many people. I say jail time would change that attitude.

> Even speeding tickets or anything most normal people would find a burden are nothing to super rich. I'm not sure how it works in your country but in the UK too many speeding tickets and you will loose your license. The exact number depends on the severity of each offence, but we get max of 12 points over 3 years [1] so they stick with you - repeat offenders are given even stricter rules after getting their license…

Around here in this part of Scotland it is mostly average speed cameras - I am amazed at the number of people who don't seem to have grasped what this means and slow down at the cameras (which are very visible) only to speed up afterwards.