Theranos Former CEO, Elizabeth Holmes, May Roll The Dice With An Insanity Defense
The biggest female white-collar criminal of all time is facing the trial of her life in March of 2021 in the Federal Court for the Northern District of California. Elizabeth Holmes ran her billion dollar scam through her Palo Alto company Theranos.
Elizabeth Holmes rose to the top of the biotech world in a few short years. Theranos was worth $100 million in 2010. By 2014 Theranos was valued at $7 billion. Forbes magazine named Holmes the world’s youngest self-made female billionaire. Holmes was idolized by the press. Rupert Murdoch, Sam Walton, and Betsy DeVos invested millions in Theranos. Theranos appointed George Shultz, Henry Kissinger, former Secretary of Defense William Perry, Secretary of State James Mattis, Senator Bill Frist and Senator Sam Nunn to the Board of Directors.
Elizabeth Holmes idolized Apple founder Steve Jobs. Holmes never took off her black “Steve Jobs” turtleneck sweater. Holmes spoke in an unnatural baritone voice to sound like a man. Holmes rattled off Steve Jobs phrases all the time. When the Feds started closing in Holmes told the press: “First they think you’re crazy, then they fight you, then you change the world.” It was a twist on a Steve Jobs quote: “Those who are crazy enough to think they can change the world usually do.” Former employees at Theranos said Holmes occasionally reverted to her higher pitched “female” voice. Was Holmes suffering from schizophrenia?
Holmes’s big invention at Theranos was the “nanotainer.” The nanotainer was a small plastic vial that held a few drops of blood obtained from a finger prick. Holmes falsely told investors that her nanotainer could run hundreds of blood tests from a few drops of blood. The nanotainer eliminated the need to extract vials of blood. Unfortunately, the nanotainer didn’t work. Theranos employees complained that the nanotainer gave inaccurate readings. Holmes needed more than a finger prick of blood to run hundreds of tests. Holmes told her employees to keep quiet. Some employees left and went public. Nobody believed the “disgruntled” employees. Nobody questioned the billionaire golden girl.
The White-Collar Crime Rate for Women is Lower Than It is for Men
Most corporations, hedge funds, and financial institutions are controlled by men. Women don’t have the same opportunity to steal large sums of money as their male counterparts. The two biggest white-collar female criminals are Martha Stewart and Leona Helmsley. Stewart did six months in Club Fed in Danbury CT for insider trading. Leona Helmsley did some time for tax evasion.
Leona Helmsley worked her way to the top by marrying rich and powerful men in the New York real estate industry. Holmes worked her way to the top by sleeping with a successful man in the biotech business. When Holmes was 18 years old at Stanford University she hooked up with 37-year-old Ramesh “Sunny” Balwani, a successful Pakistani-born Silicon Valley high tech millionaire. Holmes dropped out of college, just as Steve Jobs had done, in order to start Theranos with Balwani.
Sunny Balwani and Elizabeth Holmes
Sunny Balwani drove a black Lamborghini. Sunny dumped his wife for Holmes. Sunny’s relationship with Holmes was kept a secret to Theranos investors. Sunny raised millions of dollars for Theranos without disclosing to investors that he was sleeping with Holmes.
In 2018 the Feds busted Elizabeth Holmes and Sunny Balwani. They were charged with over a dozen counts of investor fraud, wire fraud and conspiracy. They are each facing many years behind bars if convicted.
The criminal trial of Elizabeth Holmes and Sunny Balwani was originally scheduled for the end of 2020. Holmes recently told Federal Judge Edward Davila that she was going to raise the insanity defense. Holmes hired Long Beach psychological expert Mindy Mechanic to testify on her behalf. Mindy specializes in cases of sexual assault, domestic violence, stalking, abuse, infanticide, trauma, and PTSD. Most of the court records Holmes filed concerning her insanity defense are sealed due to medical privacy and confidentiality laws. I can only speculate that Holmes is going to claim that she was a victim of abuse by her partner Sunny Balwani. This abuse made her not responsible for her actions. Holmes therefore should be found not guilty by reason of insanity.
Federal Judge Davila “severed” the trials of Holmes and Sunny after Holmes told him that she would be raising the insanity defense. Holmes would be tried first in March of 2021. Sunny would be tried immediately thereafter. They would not be tried together. Judge Davila obviously didn’t want the jury to hear Holmes bash Sunny on the witness stand. Sunny has the right to a fair trial. Sunny would have his own day in court without having the jury listen to Holmes’ unusual insanity defense that throws Sunny under the bus.
Proving insanity for financial fraud is not an easy task. If it had a high probability of success, I am sure Jason Kurland and Steve Bannon would be mounting an insanity defense of their own.
Not Guilty By Reason of Insanity
John Hinckley Jr. was found not guilty by reason of insanity after he tried to shoot President Ronald Reagan in 1981. Hinckley claimed that he tried to kill Reagan because he thought he was a character in a Jodie Foster movie. Hinckley was obsessed with Jodie Foster. Hinckley spent 33 years in mental health institutions before being released to the custody of his mother in 2016. In 1993 Lorena Bobbitt was found not guilty by reason of insanity. Lorena claimed that her husband raped and abused her. This caused Lorena to “snap” and remove his hardware, which she disposed of in a field. His hardware was located and reattached by doctors after 9 hours of surgery. Her husband went on to star in porno movies. He claimed that he was back to normal. Lorena spent 45 days in a mental institution before she was released to society.
I can’t see how Holmes is going to be able to convince a jury that she was “insane” when she committed massive financial fraud over several years. I have never heard a white-collar criminal raise the insanity defense. It’s one thing to argue that you snapped and committed a single violent act. The classic case is when your spouse is caught in the act and you kill whoever is unfortunate enough to be in your bed at the time you snap. It’s another thing to argue that you stole hundreds of millions of dollars over several years because you were subjected to the abuse of Sunny Balwani.
Before she was indicted Elizabeth Holmes lived the high life. Holmes spared no expense at Theranos. The rent at the Theranos office headquarters was $1 million a month. Holmes spent $100,000 on a conference table. Holmes had a personal security detail, drivers, personal assistants, and she lived in a mansion in Los Altos. Holmes frequently flew around the world in a private jet to meet with potential investors, or should I say potential “marks.”
When the Feds started closing in, Holmes flew across the country to purchase a 9 week old Siberian husky from a dog breeder. Holmes named her dog Balto after a famous dog who led a dog sled in 1925 that delivered life saving medicine in Alaska. Holmes’ inaccurate nanotainer didn’t save lives. Patients who relied on the nanotainer could have lost their lives. Does this sound like the mind of a crazy woman? I don’t think so. This is the mind of a highly deviant individual who was motivated by pure greed. Tune in for more on the ongoing crime drama of Elizabeth Holmes, Sunny Balwani and Balto.