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3 long years after Elizabeth Holmes was first indicted. I know that we made so many mistakes on this front. It's the moment we've all been waiting for. I'm Rebecca Jarvis. This is the dropout. Elizabeth Holmes on trial. Episode 19. The verdict. 7 days and more than 50 hours after deliberations began in the criminal trial of Elizabeth Holmes. The jury. Eight men and four women. One who gave us details you'll hear for the first time on this podcast. Finally came to a decision.
At 4 10 PM on January 3, 2022 courtroom for on the fifth floor of the San Jose courthouse was packed. Elizabeth seated at the defense table was stationed between her two lead attorneys Kevin Downey and Lance Wade. Just behind her a row of family and friends were shoulder to shoulder including Elizabeth's partner Billy Evans, her mother Noel, her father Christian and Billy sister Gracie.
ABC News court producer Miles Cohen sat just a few feet away as the jurors entered the room. I watched his homes looked at the jurors as they came in and I didn't see one juror look back at her. In fact, it looked like they were looking the other direction. You know, it was just silent and tense during that time.
And that tension seemed to extend to Elizabeth who revealed the faintest hint of anxiety before the verdict was read she sat straight up in her chair, but I could see under the table she was tapping her foot. You could see Billy Evans with his head in his hands and his eyes on the ground. Holmes mom and dad just stuck in their seats and looked forward. I could not see any visible sign of emotion on their face.
When the proceedings began, the four person, journal number two, a man in his 30s or 40s handed Judge Dovel of the verdict form throughout the courtroom. You could hear a slight whisper of measured breathing. Looking down at the document for the first time, Judge Dovela raised an eyebrow. Something was missing. The date after it was added, deputy court clerk Adriana Cratzman began to read aloud.
We the members of the jury unanimously find the defendant Elizabeth Holmes guilty of the charge of conspiracy to commit wire fraud against Theranos investors. Cratzman continued down the list, taking through each of the 11 counts. In the end, Elizabeth would be found guilty on a total of four, three counts of wire fraud and one count of conspiracy to commit wire fraud against investors.
Not guilty on four, three counts of wire fraud and one count of conspiracy to commit wire fraud against patients. But on three additional counts related to investors Chris Lucas, Brian Tolbert and former money manager Alan Eisenman, the jury could not reach a unanimous verdict. As the verdicts for each count were read, the room fell completely silent. Elizabeth blanked, but sat frozen.
There was just no visible sign of emotion on Elizabeth Holmes face. She was convicted on the very first count. And even after that, she just kept her eyes forward and she sat straight up in her chair, just like she's done for most of this trial. And the second count was read again, no emotion, the third count, the fourth count. And there wasn't really anything from her family either.
They were looking straight ahead. And this was not something I expected from someone who had been convicted of fraud. It was a surreal conclusion to a trial that's lasted more than 17 weeks and a day filled with uncertainty. In the morning, the jury had issued a note declaring that they'd been deadlocked on those three counts.
Judge Davila had read an Alan note instructing the jurors to go back and deliberate, not to rush. But just a few hours later, the jury had returned, conceding they couldn't agree on the three charges related to investors Lucas, Tolbert and Eisenman. This outcome, is it surprising? It is absolutely surprising. I'm sort of baffled by the results.
Caroline Polisi is a white collar defense attorney who's been following along with us throughout the trial and has advised hundreds of clients throughout her career. She says she's never seen a verdict quite like this. It's kind of like everybody gets something verdict. It's like some not guilty, some guilty and some hung.
Although I really do think that even though it seems like a compromise verdict in reality, her exposure is essentially the same as it would have been had she been convicted on all counts really as practical matter. You've been in that room with clients. How do they behave under these circumstances? Elizabeth Holmes was in the courtroom with her mom, her father, her partner, Billy Evans. They were stoic. There was not even a wince when the verdict was delivered.
How do they behave once they walk out of that courthouse and they're sitting there with their attorneys after this bad news? It really runs the gamut. And oftentimes there's a reason why I will just say that clients often obtain new counsel for sentencing and that is not by chance.
I wouldn't be surprised if Elizabeth Holmes were her typical Elizabeth Holmes that we all know. I would assume that she is getting down to business is incredibly practical about the whole situation and is not throwing her hands up but is looking for options to continue. This is far from over.
So this is not there's not a lot of time to waste. So what exactly will this kind of popri verdict mean for Elizabeth? Here's Santa Clara University law professor Ellen Kreitsberg who's also been following the trial with us from the start.
This is clearly a win for the prosecution. It really is less important as to whether or not she was convicted of some or all of the offenses. The fact that she was convicted of some of the offenses means she's going to be held accountable for what they have shown to be her deceitful and fraudulent behavior. And so I think this is clearly a win for the government.
Kreitsberg says not to conflate a confusing outcome with a confused jury. This jury concluded the way they've conducted themselves the entire trial. They were thoughtful. They were conscientious. It appears they really meticulously went through the evidence and they differentiated among the different counts and deciding that she was guilty of some not guilty of others and ultimately couldn't reach a unanimous decision in a few other of the counts.
This idea that she could be found guilty on four of the investor counts, but that these other three investor counts would be inconclusive. There would be no verdict on them. Does that undermine in any way the overarching verdict? I don't think the fact that it was a mixed verdict undermines it at all. The jury clearly found she engaged in fraudulent deceitful conduct. They found she made these misrepresentations with the intent of the court.
They were not persuaded by any of the suggestion that she may have been overpowered psychologically or influenced psychologically by Sonny Bawani. And so they made a very clear statement that she should be held accountable. The fact that some of the counts were inconclusive. We first of all don't know how the jury split on those counts. We don't know if they were evenly divided or the majority felt she should be found guilty or not guilty.
And we also don't know what they focused on with respect to the evidence. The evidence was not identical as to each investor when we look at how she communicated information to them, how they learned about certain information. And so I don't find it troubling at all. And as it turns out, we now know to some extent how the jury reached the conclusions they did. We spoke to juror number six. Wayne Cox, a 64 year old TV writer and actor from Aptos, California.
Cox co-wrote 90s animated series like Tiny Tune Adventures and Problem Child, and even won a daytime Emmy for writing the Tiny Tune's theme song. Cox told us on the first day of deliberations the jury didn't anonymous poll. Every juror indicated whether he or she thought Elizabeth was guilty on each of the 11 counts. Cox said the results were mixed. We tallied them on an eraser board and we saw that they were divided on most everything he said.
But after three days of deliberations, the jurors had reached a decision on eight of the counts and spent the remaining four days debating those final three counts which ended in mistrial. Cox told us he personally believed Elizabeth was guilty on the three deadlock charges, but more than one juror felt Elizabeth was not guilty on those charges.
We had nowhere to go, he said. We had already talked in circles for hours and hours and days and days, he told us. So we all made one last argument either way, and we were stuck right where we were, where we'd been stuck for days. The jury also never expected for the trial to last so long. We joked early on about, we'll be doing this in 2022, Cox said.
Cox says the jury ranked witnesses credibility using stars as he described it one star was no credibility to was like listen to that three was pretty good and four was completely credible. And what was Elizabeth star ranking? Cox says she scored the lowest a two lab director Adam Rosendorf got four. We liked the way he paused said Cox that he would think about his answers. And there were no one star witnesses.
Cox says some of the jury also liked investor Alan Eisenman whom you may recall is one of the more colorful characters in the courtroom. He had a lot of outbursts, but Cots says the jury liked it when witnesses showed emotion. Maybe it didn't go to their veracity that much, but it certainly made it entertaining according to Cots. Eisenman incidentally scored a three in the star system.
Cots also told us he was the juror who sent the note before Christmas asking if they could bring the jury instructions home because he found them overwhelming when the jury asked to re hear the investor call recorded by Brian Talbert.
Cots says it was because they wanted to listen to how Elizabeth pitched her technology the jurors were specifically listening for Elizabeth's comments about the use of Theranos devices in Afghanistan or in the field and decided that she was careful with her language.
Couching her statements as future projections she was careful with her words said Cots and that was a big reason according to Cots that the jury was hung on the investor counts related to Chris Lucas and Brian Talbert who were both on that call.
Cots says the jury concluded Elizabeth was responsible for information that went to investors because she was ultimately in charge, but that she was quote one step removed from the patients, which is why they found her not guilty on those counts the jury according to Cots also didn't feel the patients were directly defrauded. Cots says that after the jury reached the decision it's not like anybody was glad like oh yeah you know she's guilty we got her it was really hard to convict her he said.
It's tough to convict somebody especially somebody so likeable with such a positive dream you know attempt to really change the world for the better it's tough to convict he told us. As for Elizabeth's allegation she was abused by Sunny Bellwani Cots says the jury felt sympathetic but mostly just avoided the subject in deliberations because they didn't think the claims were relevant. Cots also noted Elizabeth cried and then when the question wasn't about that she wasn't crying.
Cots says in the end the jury respected Elizabeth's belief in her technology in her dream he says he thinks she still believes in it and that the jury still believes she believes in it.
Cots told us he felt one of the most compelling pieces of evidence were the financial projections given to Lisa Peterson the investment manager for the divorce family office Lisa Peterson had written a number on the document presumably in a meeting with Elizabeth by hand and that written note was very convincing to Cots.
Cots says at times jurors were pinching themselves just to stay awake but that because of the nationwide attention there was extra pressure to take everything seriously when they heard rumblings general James Mattis was taking the stand. Cots said he thought to himself wouldn't it be funny if it were general Mattis and it was I had no idea that's big time. Gee I wonder who's going to be who we're going to hear from next.
Cots said general Mattis was believable and it was amazing how all these witnesses who are hurt by Elizabeth were very sympathetic to her. Cots said you could tell they really despite feeling let down were impressed by her and respected her and cared about her. Cots said he thought they all did.
As for Elizabeth herself taking the stand Cots said they were surprised but it was all on her and this was her if she didn't say anything in her own defense I think it would have worked against her said Cots. There were also times according to Cots when the reporters in the courthouse covering the trial sounded like a cocktail party outside the courtroom doors.
On a lighter note Cots says the jury got along famously we were all very interactive we worked as a unit and we respected each other those people have good heart he said. Cots says everyone on the jury had a busy life children jobs and that he was proud to be with those hard working people he said he was the one who nominated jury number two was the four men because he seemed very mature and organized we all voted for him said Cots.
Cots also says during breaks jurors would do puzzles together on the day Elizabeth finished her testimony and the defense rested its case they had just put down the final piece on a puzzle of Serat's Sunday afternoon on the island of La Glonde Jotte. It was a picture which Cots observed judge Davila coincidentally had hanging on the wall of his chambers it's like we're working on this puzzle the whole trial and we'll put the last piece in on the very day that her testimony ended said Cots.
Cots says they had the same lunch every day for months ham turkey and roast beef sandwiches he was a turkey and cheese guy sometimes the jurors would swap sandwiches. Cots says the juror raised ethical concerns about staying on because she was concerned about rendering judgment on a fellow human being but was ultimately kept on was met with applause when she entered the deliberation room on her first day.
Cots says everyone really like judge Davila who he said was even killed steady and fair they also like Davila's deputy clerk Ariana Craftsman who Cots called the jury's pilot. They made us feel almost like celebrities he said we were pampered they made us feel comfortable and very respected that was the best part of the experience said Cots.
But in the end Cots said he's happy it's over and he doesn't want to do it again with or without all these insider details J. Edelsson the founder and CEO of Edelsson PC who's been called Silicon Valley's most hated plaintiffs attorney says the bottom line is the bottom line now for Elizabeth is quite simple. The big news is Elizabeth Holmes is going to jail and probably going to jail for a pretty long period of time and we had to give credit to the jury.
They were trying to match up what the prosecution proved with what the specific elements of the crimes. The difficult part of this case was separating the emotions from it. Holmes put together a very well done emotional defense and the jury clearly was not impressed by that. I think the jury did its job and I'm really I'm proud of legal system. I think that the judge was terrific.
She put on a good defense. They have a lot of cards. They can they can use but they use the ones they have but I'm sure the prosecution is feeling very very good right now. Hey, this is Brad Milky. I host ABC's Daily News podcast start here. The dropout will be back in a minute but first this episode is supported by FX's group test.
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I want to invite you to start your day with us every morning on start here. We dive deep into the biggest news stories with some of the best journalists in the world. It's smart, it's relevant and maybe most importantly for you. It's quick. Again, that start here the daily podcast from ABC News available wherever you listen.
While Elizabeth Holmes has always been the heart of this story. It's also been a parable about us and the ecosystem that allowed her to thrive and ultimately awaited her downfall. What does this outcome mean for Silicon Valley where startups by young founders are sprouting up every day.
As we've chronicled here over 25 episodes Elizabeth received early support from Silicon Valley luminaries like Oracle's Larry Ellison investor Don Lucas and venture capitalist Tim Draper who sitting in my office in 2016 insisted that Theranos' technology worked. Have you seen the technology. Oh, yeah, I've done it. I've done it. You've done it. I've done it. And there were 50 tests run on the one drop of blood, two drops of blood, 50 tests, two drops of blood from your fingers.
Yes. And it worked beautifully. We reached out to Draper who gave us the following statement after the verdict. This verdict makes me concerned that the spirit of entrepreneurship in America is in jeopardy. Elizabeth Holmes is an entrepreneur. She envisions a better future.
Entrepreneurs invent and keep iterating until their product works. I still believe in what she was trying to do. And if this scrutiny happened to every entrepreneur as they tried to make this world a better place, we would have no automobile, no smartphone, no antibiotics, and no automation. And our world would be less for it.
But besides PFM health sciences, most of Theranos' later stage funding came from investors like Rupert Murdock and the Walton and DeVos families, not the major venture firms that specialize in biotech. In retrospect, that should have been a clear warning, according to Jason Callicanis, a former journalist who's now an angel investor. What's the takeaway from this trial going to be in Silicon Valley?
Well, that's a great question. If you zoom back and you look at Theranos as a company, it's really not a Silicon Valley company in terms of, you know, who funded it. We don't actually consider Theranos really part of what we do here because they felt the ultimate test, which was raising money from the top venture capital firms here in Silicon Valley.
She got none of the top investors in Silicon Valley. She struck out zero for zero. She didn't get anybody in the top hundred firms. That's all you need to know. Callicanis was an early investor in Uber and hundreds of other Silicon Valley startups. While he thinks bold vision and risk-taking will always be a part of the Valley's DNA, he says what Elizabeth did was something else entirely.
There is certainly a piece to what we do here in Silicon Valley that is to be audacious and not to fake it to you make it, but to suspend disbelief and to be a bit delusional. Because what it takes to build an electric car or Uber or Airbnb is you have a probably one to five percent chance of succeeding.
So it does draw the entrepreneurial class group of dreamers with audacious goals, who are, you know, in their best moments delusional in that they convince themselves when they wake up that I can do this and I'll make it happen. And the ones who actually do win in Silicon Valley are the ones who do the work and who raise money from the most qualified investors and Elizabeth Holmes is the opposite of that profile in my estimation having invested over 300 founders.
One bad actor is not going to have any effect on people's ability or appetite to invest in high growth tech companies that change the world. They'll have zero impact on Silicon Valley. And watch the Theranos debacle unfold. Calacannis now recommends this rule of thumb. If a company becomes worth billions of dollars before they have a product in market, it's going to fail and it might be a fraud. It doesn't have to be a fraud, but it might be.
While Elizabeth may not have received the official backing of Silicon Valley, it sure looked like she had it at least for a time. Remember, in addition to loads of glowing publicity from the press from time fortune forbs, the New Yorker, Mary Claire and others, Elizabeth was also celebrated in and gained entry to some very exclusive circles in Silicon Valley and beyond Harvard named her to its medical school board of fellows, president Obama named her a US ambassador for global entrepreneurship.
I think the opportunity to try to connect with especially women and young girls and developing economies around what only because of this country I've been able to do.
She was a fixture at Bay Area parties with tech titans and venture capitalists. And as for her prestigious board of directors, many came through her connection to former secretary of state George Schultz and to Stanford's Hoover institution, which is one reason why attorney Jay Adelson says he suspects this is a Silicon Valley story that will have an undeniable impact. I think overall this is going to lead to a tremendous shake up in Silicon Valley.
We've had 20 plus years of Silicon Valley playing fast and loose with facts and everyone kind of just agreed that it was okay. And it really isn't okay. It's not okay to steal a little bit of dollars from investors and it's not okay to to mask with people's lives. Adelson hopes if there is that kind of shake up, it'll apply to everyone. It concerns me that Elizabeth Holmes was at the time the most prominent female startup.
And the number of men who have gotten away with stuff that Elizabeth Holmes did, if not worse, it would fill, you know, germs. I do, just as someone who believes so much in consumer rights, and not defrauding people, I'm glad about this filthy verdict. It makes me uneasy that I don't want there to be one scapegoat here. I'm not saying that she didn't do anything wrong. She deserves her sentence. But I think there are a lot of other people, a lot of men who've done similar things.
And I hope that justice will be done in other instances as well. Will you think this changes things? Do you see more of these cases being brought by the government? Yeah, I mean, I think it changed things on a number of levels. I think investors probably are buoyed by this result and probably feel like they've got better arguments to make that they were defrauded.
And yeah, I think prosecutors now understand that these are tough cases to try in that, you know, they're long cases, they're, you know, somewhat in the weeds. But they're economically winnable and they're really important for our country. Law professor Ellen Kreitsberg doesn't see it leading to any sweeping changes, but she does expect an impact. You live in the valley, you practice in the valley, you teach in the valley, what is the outcome of this case?
So I don't think this is going to have a dramatic change in Silicon Valley. I think it is on the one hand sends a very clear message to CEOs to be mindful of where that ethical line is and to be even more careful not to cross that line. And remember the line they're saying she crossed was that she shifted from the projection of I have an incredible machine that will potentially revolutionize health care and that vision statement that a lot of companies engage in is not the criminal behavior.
But when she crossed the line to saying, and here is what my machine already does, that's where she crossed the line and I don't think most companies do that. So it is a lesson that you will be held accountable if you do cross that line. And I think it also should have the effect on investors who, although they're lack of due diligence in this case to look into her claims was not considered a defense to Elizabeth Holmes.
But certainly is a signal to investors that perhaps they should be more careful and before they invest hundreds of millions and dollars, they should look more carefully get very clear precise statements and be very clear on what information they are getting from the company. But at the end of the day, there's a lot of innovation on the one hand and a lot of people looking to make a whole lot of money on the other hand. And so much of what happens in the valley is not going to change.
So where does that leave us and what are founders who are fighting to get their ideas off the ground right now supposed to make of the Elizabeth Holmes allegory. I think the the Theranos case is one that will be taught for centuries in business schools about what not to do and how not to build and run a company. Adam Grant is an organizational psychologist at Wharton and host of the Ted podcast work life. He also mentors a lot of startups.
I think at minimum we need to be much clearer about what it means to fake it until you make it right. I've never been a fan of that advice to begin with. I'm much more comfortable investing in an entrepreneur who just admits I don't know what I'm doing on this yet, but I'm confident that we'll figure it out together. And I think a lot of entrepreneurs are just given bad advice throughout the story. There's this blurred line between full transparency and selling the dream.
And that is a question every founder, every startup faces. Where do you think the line should be? Well, I don't think there's anything wrong with selling a dream. I think where you run into trouble is when you make claims that you've already achieved the dream. When in fact you haven't. And so I think every founder has to make a case for why their vision is important and what makes it achievable.
I see this in founders a lot. There's an expectation that they have to show hockey stick growth. But in many cases that's a projection. Right, it's an aspiration. You can't claim its reality if it hasn't happened. Where do you think that need to show the hockey stick growth is coming from? I think investors put a lot of pressure on entrepreneurs to prove that they're going to be the next game changing startup. And I think that that sometimes leads entrepreneurs to cut corners.
I think also there's some of the pressures and turtles. Right, I think we live in a society where people are constantly trying to outdo others. You see your classmates start up valued at hundreds of millions or billions of dollars. Like, well, what have I done with my life lately? And then it becomes, I think a slippery slope for some founders that I've seen who think that they just have to exceed whatever whatever that yardstick is. Grant hopes there's a bigger takeaway too.
The right lesson is to say we actually need more founders who are working on solving meaningful problems, not just building cute apps. And we need better systems and standards for evaluating whether what they're doing is credible. As for the other major outstanding question, what becomes of Sunny Bellwani? We still don't know. Elizabeth's former boyfriend and COO originally was charged as her co-conspirator. His trial is scheduled to begin next month.
Sunny's attorney, Jeff Cooper-Smith, was confident about his client's chances when we spoke to him back in 2019. I'm very confident that when the jury hears the whole story, you're going to see an acquittal in this case. But post-aluspith Holmes verdict, Jay Edelsson says Sunny has reason to be less optimistic. I think it's bad for Sunny on a number of levels. One is you never really want to be the second defendant to go because the prosecution learns so much from the first trial.
So they're allowed to speak to members of the jury and say, tell me what work and what didn't work. That's a lone, very helpful second. They won their case. And a lot of the things that they're going to have to show to convey Elizabeth Holmes, they're going to have to show again for Sunny. And they've demonstrated that they can do that. So I just think he's in a lot of trouble.
And he'll be in shouldn't see his defense. I'm sure his defense is going to be, she made all the decisions. I was just rooting for her from the sidelines. And that's going to be a really, really difficult defense to make. It's also entirely possible the government and Sunny are already working on another option, according to Professor Kreitsberg. I'm sure that Sunny Barwani is discussing with his lawyers whether at this point they should reach out to the government for a plea offer.
And I'm sure the government is thinking about whether they want to reach out to Sunny Barwani to make a plea offer, even though it seems more likely they can get the conviction. And so their case against Sunny Barwani is stronger in many ways after the trial of Elizabeth Holmes. A trial is a long and arduous process. And if they can get a plea offer, it is usually worth the government's time to do that.
It saves an awful lot of time and energy and logistics and all the witnesses that have to come to California again to testify. But I suspect that there'll be some significant conversations about the possibility of a plea between the government and Sunny Barwani's lawyers. Macy's has all of your grill master essentials for Father's Day. Stop by to get our hand-dream chicken breast and certified Angus beef patties that are ready to grill.
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While Sunny Bellwani and Elizabeth Holmes' cases were severed ahead of her trial, the outcomes may be linked in other ways. Judge Davila and both legal teams agreed after the verdict to postpone Elizabeth's sentencing until after Sunny's litigation is resolved, whether by plea deal or trial. And law professor Ellen Kreitzberg says Elizabeth could use that to her advantage.
And Elizabeth Holmes and her lawyers may talk to the government now about cooperating with them in the trial of Sunny Bellwani. Under the federal guidelines, cooperation by a defendant is viewed very favorably and allows what's called downward departures, in other words, allows the judge to reduce the sentence that might otherwise be required under the guidelines. So she may be interested in pursuing that now that she's facing conviction on several counts.
And ultimately, it's up to Judge Davila to sentence Elizabeth. Each of the four guilty counts carries a maximum of 20 years in prison. Elizabeth also faces a fine of $250,000 plus restitution for each count of wire fraud and conspiracy. So how likely is it Elizabeth Holmes spends serious time behind bars? Hold our three legal experts, Edelsen, Kreitzberg and Policing, as well as ABC News chief legal affairs correspondent Danny Brums.
Their predictions about Elizabeth's sentence ranged from about three to 10 years behind bars. But there's a lot of wiggle room when it comes to those numbers according to attorney Caroline Policing. If you were her attorneys, what would that conversation look like when you walk out of the court? You always got to stay positive. There is a lot to be done at sentencing here. It's its own cottage industry among criminal defense attorneys.
You have to be focused now at this point. There is a lot that's going to happen and it's going to happen quickly. It is not a foregone conclusion in terms of how long she is going to jail. And really, I would note that there is an argument to be made that maybe she shouldn't go to jail at all. You think there's a chance Elizabeth Holmes doesn't go to prison at all?
I don't think there is a chance that she doesn't go to prison at all. I think there is a chance that her lawyers will argue with stray face that she may not need to go to prison. That the principles of the federal sentencing guidelines can be achieved without sending her to prison. I think certainly that this split verdict will give them a lot of room to work with in terms of how are they going to go about making the arguments for a departure from the guidelines.
Policing also believes the amount of money involved in the investor fraud convictions more than $140 million could have an impact on sentencing. The loss amount here is very high and for better or for worse, the federal sentencing guidelines, they have a huge bump up when the loss goes above 65 million. She's definitely looking at technically over 15 years or in the realm of that possibility.
This is where Elizabeth's abuse allegations against Sunny Belwani could play a role. Sunny has firmly denied the claims and the defense conspicuously left them out of closing arguments. But Policing says they could help Elizabeth at sentencing. It really could be that they were laying the foundation if necessary to be able to delve into that complex relationship a bit more in the sentencing.
Because you get more wiggle room in a sentencing memorandum in terms of the types of arguments you can make. And I think that that type of an argument in terms of being in an abusive relationship is definitely the type of background color that an attorney would put in a memorandum arguing that a non-guide lines maybe even a non custodial sentence would be sufficient but not greater than necessary to satisfy the objectives of the sentencing.
Elizabeth's good behavior in personal circumstances might also help according to Professor Ellen Kreitzberg. This is a judge who is both thoughtful and compassionate and the more time that passes where she stays out of trouble and perhaps engages in more positive conduct will weigh heavily in her favor. One issue to think about with respect to sentencing that although the fact that she has a child and her family is not a specific factor the court can consider.
I think it does give us the opportunity to think about whether or not compassion in any way should enter into sentencing and the federal guidelines are fairly rigid and do not allow a lot of room for that. But it will be an interesting discussion when the judge does issue his sentence and he's required and I'm sure he will give a long and detailed explanation for the reasons for his sentence. Kreitzberg says we could also be hearing then from two of the heroes in this story.
Tyler Schultz and Erica Chung who risked everything to expose what they said they witnessed inside of Theranos. Their experience could be included in the impact statements. A report is conducted by a court office that will look into her background, we'll talk to the victims and may even talk to some of the people like Tyler Schultz or Erica Chung who really received a great deal of intimidation in the context of this case, much of which wasn't brought into trial.
At sentencing the judge can go outside of the four walls of the courtroom and learn all kinds of information both positive and negative of adolescent homes in deciding what the appropriate sentences. Tyler Schultz, by the way, whose remarkable bravery is a big reason we're all here, posted this statement to Twitter after the verdict was read in court.
This has been a long chapter in my life. I am happy that justice has been served and that this saga is finally in my rearview mirror, proud of the impact that Erica and I had hoped to inspire other young professionals to hold their leaders accountable. Even in the face of all of it, when we spoke back in the first season of the dropout, Erica warned us not to become cynical.
I hope that people don't get completely discouraged and think that everyone who is in the healthcare industry and the biotech industry is somehow out to get them and to hurt them. Like there are a lot of good people in this industry that really, really want to do, you know, really want to do good. The government will also have the option to retry the three counts where jurors were deadlocked and judge Davila ruled a mistrial.
Prosecutors say they expect to make a decision on that at a hearing next week. But Jay Adelson believes a retrial at this point is unlikely. The basic rule of thumb is that when a prosecutor has already done a trial once, the second time around, they may call the mistakes go away. So already, I'm sure they spent a good portion of the afternoon talking to the jury members, finding out what worked, what didn't work.
And they're going to put on if they do have to do it and kind of depends what the sentence is going to look like. You know, homes is in a lot of trouble. You think they would actually retry Elizabeth Holmes on those three counts where the jury could not come to a conclusion? I don't think they have to because they got the big win. These are serious fraud counts they got guilty works on. These aren't kind of little pinling counts. These have to do with the core of their case.
But it is not uncommon at all for prosecutors to take the verdict they've got. Get a few guilty counts and then retry any hum counts. So I'm sure there's something they'll be thinking through. Once sentencing is determined, it's very likely team homes will file an appeal. A process professor Kreitsberg says could take years. They will ask the judge to keep her release pending the outcome of the appeal.
And this judge may very well leave her out pending appeal which could take from one to two years. So although there is some accountability which has been decided by the jury today with their verdict, the actual punishment may not come into effect for some time. Even so, Kreitsberg is confident there will come a day when Elizabeth is behind bars. In that appeal, the lawyers will ask the court to look at legal errors. Did the judge make rulings that were incorrect, constitutionally impermissible?
And because of those errors should her conviction be overturned. Now, if they're successful on appeal, it doesn't mean she's absolved. It means it goes back and the government can take her to trial again. But this judge was extraordinarily careful, very smart. And in any of the rulings in which it was a very close case, he tended to give the ruling to the side of the defense. And he did that probably knowing that should there be a conviction, be very unlikely that it would be reversed on appeal.
So now Elizabeth, 37 years old, celebrated less than a decade ago as the next Steve Jobs and wants the youngest female self-made billionaire, waits. She's not in custody, but she's no longer free. On January 3, 2022, Elizabeth walked out of the San Jose Court House, much like she did on day one of this trial, and every day in between. Handed hand with members of her family. She was expressionless, focused, and silent.
Before we go, we want to thank you, the listeners, for coming along with us on this journey. Thank you for sharing this with us, for giving us your time, for trusting us with this complicated story. Well, this is goodbye for now. We hope to be back soon with big developments, and also something new. And we hope you'll set a reminder for March 3, 2022, when the Hulu Limited Scripted series called The Dropout, based on the first season of this podcast, begins.
Elizabeth Holmes and Sunny Bellwani did not respond or declined to comment for this podcast. Some material, including port depositions, were edited for clarity and time. The dropout Elizabeth Holmes on trial is written and reported by Victoria Thompson, Taylor Dunne, and me. Victoria is the executive producer of Taylor and I, our producers. For ABC audio, Susie Lewis producer and Madeline Wood and Marwell Milwaukee are associate producers. Dia Athan and Miles Cohen are our court producers.
For ABC's business unit, our associate producer is Victor Ordonias, and our production assistant is Lane Wynn. Mixing and scoring on this episode is by Susie Liu and Robert Galein. Evan Viola composed the music for The Dropout. Our artwork is by Teddy Blanks at Chips & Y and Severic Hanstatt. For ABC audio, Liz Alessie is executive producer. Special thanks to Josh Cohen, Elizabeth Russo, Ian Rosenberg, Eric Abram, and Stacia DeScheescu. He's better all here!
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