Elizabeth Holmes' trial is almost over, here's what the future could hold for the founder accused of fooling the world
1/3/22
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Jurors are now in their third week of deliberations in the Holmes trial, and after nearly four months of testimony, 32 witness accounts, and three full days of jury deliberation, Holmes’s fate remains uncertain.
But it is likely that the 37-year-old mother will face jail time, Justin Paperny, founder of federal prison consultancy
White Collar Advice, told
Fortune.
“I suspect she may get five to seven years in prison,” said Paperny.
So what will that look like? Paperny, who himself served an 18-month sentence for a single count of conspiracy to commit securities fraud, and who now works with people in similar situations, walked us through the process.
The sentencing
It’s very likely that Holmes will end up serving jail time, said Paperny. She already agreed to a large
settlement with the Securities and Exchange Commission in 2018, in which she will return millions of shares to Theranos, pay a $500,000 fine, and abstain from serving as an officer or director of a public company for 10 years. That shows she has admitted some guilt and could sway a jury against her, said Paperny, who added that most defendants lose at trial (
fewer than 1% go to trial and win their cases).
As a federal prisoner, Holmes would be eligible for a
15% reduction in her sentence for good behavior, but other than that, early release options in the federal system are very limited. “There is no real mechanism to really aggressively advance your release date in federal prison,” said Paperny.
But that doesn’t mean that Holmes will be going to prison soon, either. If Holmes loses her case, she’ll likely appeal to a higher court and could remain free while that appeal is pending. Paperny says that could take as long as 18 months. If that appeal goes south, she’ll be asked to turn herself in.
The prison
Holmes will likely be sent to a low-security prison, often referred to as Club Fed, because her alleged crimes were nonviolent and white collar. Paperny predicted that she could end up in Alderson, W.Va.,
where Martha Stewart served her five-month term for lying about a stock sale. That
would mean no fences plus a swimming pool, volleyball, softball, tennis, racquetball, and even roller skating. Another option is a prison camp in Dublin, Calif. The prison, which is in the Bay Area, is
where Felicity Huffman spent time for her role in the college admissions scandal.
Amenities include a sundeck and tennis courts. They also have craft activities like crochet, watercolor painting, and origami.
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