The charges against Elizabeth Holmes, and some views of the trial . . .

If you are following some of the Government’s trial against Elizabeth Holmes, as with any allegation or trial of wrongdoing or liability you start first with the standard of care or duty that is alleged to have been breached or violated, and the facts. In the circumstance of a trial, the facts are the evidence that is admissible and presented to the trier of fact in the trial (i.e., the jury or the judge in a court trial).

With that preface, Elizabeth Holmes is charged with nine counts of wire fraud 18 USC §1343, plus two counts of conspiracy to commit wire fraud 18 USC §1349.

18 USC §1343 states as follows (from law.cornell.edu/uscode):

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”

And here is some additional discussion about 18 USC §1343 from the US Department of Justice website (https://www.justice.gov/archives/jm/criminal-resource-manual-941-18-usc-1343-elements-wire-fraud):

941. 18 U.S.C. 1343—ELEMENTS OF WIRE FRAUD

The elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute, but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme. United States v. Briscoe, 65 F.3d 576, 583 (7th Cir. 1995) (citing United States v. Ames Sintering Co., 927 F.2d 232, 234 (6th Cir. 1990) (per curiam)); United States v. Frey, 42 F.3d 795, 797 (3d Cir. 1994) (wire fraud is identical to mail fraud statute except that it speaks of communications transmitted by wire); see alsoe.g.United States v. Profit, 49 F.3d 404, 406 n. 1 (8th Cir.) (the four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used) (citing Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit 6.18.1341 (West 1994)), cert. denied, 115 S.Ct. 2289 (1995); United States v. Hanson, 41 F.3d 580, 583 (10th Cir. 1994) (two elements comprise the crime of wire fraud: (1) a scheme or artifice to defraud; and (2) use of interstate wire communication to facilitate that scheme); United States v. Faulkner, 17 F.3d 745, 771 (5th Cir. 1994) (essential elements of wire fraud are: (1) a scheme to defraud and (2) the use of, or causing the use of, interstate wire communications to execute the scheme), cert. denied, 115 S.Ct. 193 (1995); United States v. Cassiere, 4 F.3d 1006 (1st Cir. 1993) (to prove wire fraud government must show (1) scheme to defraud by means of false pretenses, (2) defendant’s knowing and willful participation in scheme with intent to defraud, and (3) use of interstate wire communications in furtherance of scheme); United States v. Maxwell, 920 F.2d 1028, 1035 (D.C. Cir. 1990) (“Wire fraud requires proof of (1) a scheme to defraud; and (2) the use of an interstate wire communication to further the scheme.”).

[cited in JM 9-43.100]

18 USC §1349 states as follows (from law.cornell.edu/uscode):

“Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.”

Thus, you can understand the Holmes defense focus, some of which includes: no false or untrue statements, representations, promises or pretenses were made; and there was no voluntary and intentional scheme, act or action to make a false or untrue (e.g., known untrue or perhaps not based on a reasonable belief) statement, representation, promise or pretense with the intent to defraud.

As you might be aware, Ms. Holmes did not have to testify at trial. The Government/prosecution could not compel her to testify. And the Government/prosecution had the burden of proof – i.e., as Ms. Holmes is presumed to be innocent of the claims that are alleged against her, the Government/prosecution has the burden to sufficiently establish and prove to the required degree, measure or standard at least one of the claims that the Government/prosecution alleged against Ms. Holmes. However, if Ms. Holmes decided to testify herself, she then would be required to allow the Government/prosecution to cross-examine her – i.e., to try to pick apart her testimony, actions and defenses.

Ms. Holmes and her attorneys decided that she would testify – presumably that decision was made based on a perception and calculation of the risk and concern that the evidence that the Government/prosecution presented to the jury might be sufficient to result in a finding of guilt on one or more of the claims that had been alleged. Of course, this is a judgment call, the answer to which we will probably never know.

Ms. Holmes also isn’t your standard witness. She prepares well and fully for her testimony, she speaks and presents herself well, and she tends to stand up well against cross-examination. On the stand/in public she appears to be fairly unflappable, even on occasions when she acknowledged that in hindsight, she might have said something differently. On the other hand, the effect is unknown of the evidence that was presented about the coaching or training that Ms. Holmes underwent to hone her presentation skills and her appearance of being a CEO who is knowledgeable, confident, correct in her statements, and in control.

Advantage to Holmes:

The Government/prosecution has the burden of proving its case.

She needs to find only one juror who isn’t sufficiently convinced by the Government/prosecution.

Ms. Holmes also isn’t your standard witness.

Advantage to the Government/prosecution:

In a sense, the Government/prosecution has unlimited, or not so limited, resources.

Apparently, the risk or concern as viewed by the defense is sufficiently strong that the jury might find guilt if Ms. Holmes did not testify.  

Ms. Holmes has to defend against each of the Government/prosecution’s claims.

The conspiracy to commit wire fraud charges  (18 USC §1349) might offer the Government/prosecution a fallback charge or position.

Uncertainties and contingencies:

Well . . . there are many, however, for sure:

The persuasiveness, believability, likeability and optics of Ms. Holmes’ testimony and demeanor;

How well the competing attorneys do in their closing arguments;

The judge’s instructions to the jury;

Whether and to what extent each juror holds the Government/prosecution to its burden; and

The individual jurors and their personalities.

* * * * * * *

Best to you. David Tate, Esq. (and inactive CPA)

Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

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David Tate, Esq. (and inactive California CPA) – practicing in California only.

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