Theranos Founder Indicted of Federal Wire Fraud Charges in California

Posted on Monday, July 2nd, 2018 at 10:42 am    

Elizabeth Holmes dropped out of Stanford in 2003 to found Theranos, a medical technology company that would at one point be worth roughly $9 billion. Since then, Holmes has suffered quite the reversal of fortune. Along with former COO and president of Theranos Ramesh Balwani, Holmes is facing a potentially lengthy prison sentence stemming from her indictment on federal wire fraud charges. As it turns out, many of the high-profile investments that propelled Theranos to such a lofty worth were acquired dishonestly. Holmes and Balwani stand accused of defrauding their investors out of significant sums of money. If found guilty, they could see significant fines in addition to potential prison time.

If you’re in Los Angeles and need help finding the fine line between a simple mistake and fraud, contact Spolin Law P.C.. Our lawyers have the knowledge and dedication to put your defense together. Schedule a free consultation with an experienced Los Angeles fraud defense attorney today by calling (310) 424-5816.

Were the Lies Told to Investors Fraud, or Just Wrong?

Theranos attracted several notable investors in its early days as a business. These investors were attracted, according to the allegations against Holmes, by misleading remarks about how well Theranos’ medical technology worked. Supposedly, there were functionality problems with the technology that both Holmes and Balwani were aware of. In spite of this, they maintained that their machines could compete with the market standard. Holmes and Balwani are also accused of inflating Theranos’ revenue projections, and referencing a fictitious contract with the Department of Defense.

Second Form of Fraud Connected to False Advertisement

The charges against Holmes and Balwani also outline a second form of alleged fraud, more nuanced than simply lying to investors. Theranos made its blood-testing technology available for use at Walgreens. Through an advertising campaign, Theranos encouraged doctors and patients to have blood tests performed at those Walgreens locations, using Theranos technology. A portion of the money Walgreens customers paid for those blood tests went to Theranos, and by extension – Holmes and Balwani. The case against them alleges that money was acquired through fraud.

Potential Fraud Results in Large Possible Sentence

In total, Holmes, Balwani, and Theranos are accused of defrauding investors out of roughly $700 million dollars. Holmes and Balwani are each charged with two counts of conspiracy to commit wire fraud, and nine counts of wire fraud. What punishment they will ultimately face depends on how much of that money they have left. If the money is gone, both will likely face between 15 and 20 years in prison. They could also each be fined up to $250,000, plus addition reparations for each count of conspiracy and fraud.

Was There Intent to Commit Fraud?

In a case such as this, the prosecution bears the burden of proof. That means they must show beyond a reasonable doubt that the actions of Holmes and Balwani showed an unquestionable intent to commit fraud. This question can be decided by examining the related evidence, such as communications between the accused parties, as well as their personal notes.

Facing Wire Fraud Charges? An Attorney Can Help

As the story of Elizabeth Holmes and Theranos shows, fraud cases are complicated. Selling your product and making predictions about your company, inhabits a gray area where the truth is concerned. While you may not be sure how to navigate the legal system, our lawyers will put every piece of your defense into place. If you have questions about fraud crimes, fraud consequences, or any fraud law applicable to your situation, contact Spolin Law P.C. today.

Call (310) 424-5816, or use the online form to set up a free case consultation.


Inmates Escape from Orange County Jail – A Discussion of the Crime of “Escape”

Posted on Sunday, January 24th, 2016 at 10:37 am    

On Friday three inmates accused of major felonies escaped from the Orange County Men’s Jail, located 40 miles from downtown Los Angeles in the Santa Ana area. The three men were in custody pending pre-trial proceedings and trial for unrelated charges of murder, kidnapping, and torture.  An area-wide manhunt is now underway.

The Orange County Sheriff announced the escapes today.  The Sheriff’s Office has determined that the inmates escaped by cutting through half-inch steel bars, climbing through a sewage pipe, and using bed sheets tied together as a rope to climb down four stories.

While the charges that the inmates faced are certainly serious, their act of escape may also meaningfully lengthen their sentences.  Under California law, escaping from a jail when facing felony charges is itself a felony (although a prosecutor has discretion to charge the offense as a misdemeanor). Escape is defined as

  • “an unlawful departure”
  • “from the limits of an inmate’s custody”
  • by an individual lawfully in custody

People v Gallegos (1974).  Conviction of “escape” can result in a prison sentence of 16 months, two years, or three years, depending on the decision of the sentencing judge.

An escape attempt for inmates who have yet to face trial will also likely impact their upcoming trial.  This is because prosecutors are given wide latitude to show evidence of the defendant’s conduct that indicates “consciousness of guilt.”  That is, assuming a judge does not determine that the incident would unfairly prejudice the jury against the defendant, a prosecutor can show evidence of the escape to demonstrate that the defendant knew he or she was guilty and wanted to escape the prospect of conviction at trial.  Fleeing from police or otherwise avoiding capture are other examples of conduct by an accused that can frequently be used at trial to show consciousness of guilt.

As the search for the three inmates continues, check back for updates on the status of the manhunt and on whether they will indeed be charged with and prosecuted for the crime of escape.

Talk to a Los Angeles Criminal Defense Lawyer

Aaron Spolin, a former prosecutor, and award-winning criminal defense attorney in Los Angeles, has a track record of success handling violent crime cases. He has been on the winning side of hundreds of cases. To receive a 100% free and confidential consultation from Aaron today, please call this number: (310) 424-5816.


Beverly Hills Businessman Arrested on Major Federal Fraud Charges

Posted on Thursday, January 14th, 2016 at 9:26 am    

Beverly Hills, CA, businessman Ataollah Aminpour was arrested January 13th on federal criminal charges for allegedly defrauding his employer Mirae Bank of $33 million.

Mr. Aminpour will be prosecuted by the United States Attorney’s Office for the Central District of California.  He faces up to 30 years in federal prison.

The fraud charges stem from the period of time when Mr. Aminpour was chief marketing officer for Mirae Bank.  He is accused to bringing loan applicants to the bank and then conspiring with the applicants to falsify their financial situation so as to qualify for large loans.  For example, according to the U.S. Attorney’s Office he loaned an applicant $1.3 million dollars for one day so that the applicant could represent to the bank that he had approximately $1.4 million dollars in his bank account as collateral for a loan.

Mr. Aminpour profited from these actions by also misrepresenting to Mirae Bank the true value of the businesses that the loan applicants were purchasing.  When the bank loaned more money than was actually necessary to buy the businesses, he allegedly took the excess money for himself.  The total amount of the loans equaled $150 million, amounting to a $33 million loss for Mirae Bank.  Mr. Aminpour’s actions contributed to the bank’s collapse in 2009.

Under federal law, an individual commits bank fraud when, in an effort to “defraud a financial institution,” he or she “knowingly and willfully:”

  • “falsifies, conceals, or covers up … a material fact,” or
  • “makes any materially false, fictitious, or fraudulent statement or representation,” or
  • “makes or uses any false writing or document knowing [it] to contain any materially false . . . statement or entry”

Full text of bank fraud definitions can be viewed in the United States Code, at 18 U.S. Code § 1001 and 18 U.S. Code § 1344.

According to the U.S. Attorney for the Central District of California, Eileen Decker: “Over the course of nearly four years, Mr. Aminpour was able to skim money from many of these loans, which allowed him to profit at the expense of the bank and taxpayers who had to bail out the failed financial institution” Mirae Bank.   U.S. Attorney Decker’s full comments are listed on her office’s website.  We will post an update here with any new occurrences in the case, including a possible guilty plea or the setting of a trial date.

Talk to a Los Angeles Criminal Defense Lawyer

Aaron Spolin, a former prosecutor, and award-winning Los Angeles criminal defense attorney, has a track record of success handling violent crime cases. He has been on the winning side of hundreds of cases. To receive a 100% free and confidential consultation from Aaron today, please call this number: (310) 424-5816.