What Is a Fictitious ID and What Are the Penalties for Possessing One?Published on August 23, 2018
There are many reasons people possess false identification materials. If you’re under the age of 18, you need an ID that says you’re of the legal age to purchase any tobacco products. Perhaps the most well-known use of a fake is buying alcohol or gaining entrance to a bar or club. Whatever your reason for using a fictitious ID is, getting caught using one will lead to legal trouble. California law prohibits possessing or displaying a fake ID with the intent of defrauding someone else. For using such identification, you can be charged with either a misdemeanor or a felony. The specifics of your case will determine the level of your offense.
If you have been caught using a fake ID, call a criminal defense attorney right away. At Spolin Law P.C., we will handle every aspect of your fraud case, whether that means getting the charges dropped, or putting together an aggressive defense. If convicted of an offense related to the use of a fictitious ID, you face several potential penalties. With your rights and freedom on the line, you want to know that someone is keeping you and your case on track.
What Qualifies as a Fictitious ID?
California law defines a fake ID as any driver’s license or identification card issued by a government agency that has been:
- Physically altered
- Forged, or made to show falsified information
- Duplicated or reproduced
- Counterfeited from someone else’s ID
Possessing or displaying an ID that falls under any of these categories, and intending to use that ID to commit forgery, is an offense punishable under California Penal Code.
Intent and Fictitious ID Charges
In addition to possessing, being in control of, or displaying a fake ID, it also illegal in California to use such identification to commit forgery. With regard to fake ID laws, forgery refers to fraud, which is the deception of another person to cause loss or damage to property, financial assets, or legal standing. This statutory language could serve as a possible defense in your case; if you didn’t know that your ID was falsified, you wouldn’t possess the intent to defraud anyone with it.
Penalties for Possession of a Fake ID
Under the California Penal Code, possessing or displaying a fake ID is known as a “wobbler.” This means your offense could be charged as either a misdemeanor or a felony, depending on the details of your case. If you’re charged with a misdemeanor, you face up to one year in jail, and a fine of $1,000. If you’re charged with a felony, however, you may be incarcerated for up to three years, and fined as much as $10,000. Your official charges are determined by numerous factors, such as:
- How much your fraud was worth
- What your crime would have cost others
- Your previous criminal record
Talk to An Experienced Attorney About Your Fictitious ID Charges
If you are facing charges for the possession or use of a fake ID, an experienced attorney will assist you in handling the confusion wobblers can sometimes cause. If you’re in the Los Angeles area, Spolin Law P.C. is prepared to discuss your fictitious ID or fraud case. Whether you’re facing a misdemeanor or felony-level offense, our dedicated attorneys know what a successful defense requires. To schedule a free, initial evaluation of your case, contact a criminal defense lawyer at our firm by calling (310) 424-5816.
Attorney Aaron Spolin Ranked in Top 1% of California LawyersPublished on August 15, 2018
Spolin Law P.C. is pleased to announce that two independent third-party rating agencies have ranked Aaron Spolin among the top 1% of criminal law attorneys in California.
The American Institute of Criminal Law Attorneys (AIOCLA) has nominated and selected Aaron Spolin for its 2018 list of the “10 Best Attorneys” in California in the field of criminal law. As the organization’s selection letter notes, AICLA is an “impartial third-party attorney rating service and invitation-only legal organization recognizing excellence in practitioners in the field.” Each attorney must (1) be formally nominated by the Institute, clients, and/or a fellow attorney, (2) “have attained the highest degree of professional achievement in his or her field of law,” and (3) “have impeccable client satisfaction ratings.” Spolin Law P.C. was informed of the selection in a letter sent to the office this past February.
The National Trial Lawyers (NTL) also recognized Mr. Spolin for his criminal law advocacy, adding him to its criminal defense list of the “Top 100 Trial Lawyers.” NTL is an educational organization with the mission of “promoting excellence and fostering diversity in the legal profession.” It is also the publisher of The Trial Lawyer magazine. In March of this year the organization informed Mr. Spolin of his selection. This was shortly after he had obtained not-guilty jury verdicts on the top charges of two cases within a two-month time span.
To speak with a Los Angeles criminal appeals attorney at Spolin Law P.C., call or email us at (310) 424-5816 or email@example.com.
Trader Joe’s Shooting Suspect Facing Murder Charges, Despite Not Firing the Bullet that Killed an EmployeePublished on August 7, 2018
Many people think of murder as a fairly straightforward crime. You may think that, regardless of the particulars, you can face a murder charge if your actions result in someone else’s death. Regardless of how you conceive murder as a criminal offense, you would likely be surprised to hear about a man facing murder charges despite someone else firing the shot caused a death. This is the exact situation of Trader Joe’s shooting suspect Gene Evin Atkins. While a police officer discharged the bullet that struck Trader Joe’s employee Melyda Corado, prosecutors are trying to hold Atkins responsible through a legal principle known as the “provocative act doctrine.”
If you’re facing murder charges in the Los Angeles area, you need the strong legal counsel of an experienced murder defense attorney. The law surrounding homicide crimes is extremely complicated. At Spolin Law P.C., we know how to recognize the minute details that govern these offenses, and develop a defense based off that information.
Atkins is Accused of Initiating Chain of Events that Led to Murder in Trader Joe’s Shooting
The basis of the case against Atkins is that his actions led to Corado’s death, even though Atkins himself didn’t pull the trigger. That chain of events begins with Atkins stealing his grandmother’s car. He then kidnapped a 17-year-old female, and fled in the vehicle. Police say he fired shots out the back window at officers who were pursuing him.
Atkins’ flight eventually led him to crash the car outside Trader Joe’s. After the crash, Atkins attempted to flee into the store. As he ran, he continued to shoot at the police, who returned fire. It was during this shootout that a police-fired bullet struck and killed Corado, who was exiting the store as Atkins was entering.
Understanding the Provocative Act Doctrine
Atkins’ murder charge stems from a principle of California law known as the “provocative act doctrine.” The main concept of this doctrine states that if your actions provoke another person to commit a killing, you may be liable for murder.
In Atkins’ case, the prosecution is trying to show that he intentionally set into motion a series of actions, and the outcome of those actions was Corado’s death. The fact that he was not trying to bring about Corado’s death does not matter. Because he kidnapped someone and shot at police as he fled, he allegedly acted with conscious disregard for human life. In firing the shot that killed Corado, the police were simply responding to the circumstances, placing the responsibility for the murder on Atkins.
The California Supreme Court has clarified the scope of the provocative act doctrine, stating that its application must be based on intent. While you don’t have to commit the deadly act yourself, you must have the intent of acting in such a way that endangers others.
Contact a Murder Defense Attorney at Our Firm for Help Today
Whichever section of the law your murder charge is brought under, the most important aspect of your defense is reliable legal representation. Spolin Law P.C. should be your first call for assistance with murder charges in Los Angeles. Our attorneys are dedicated to fighting aggressively for you in court, and they will do so by utilizing a number of possible defenses, their years of experience, and their knowledge of the complicated laws that govern these cases.
Can I Get in Trouble for Making Fraudulent Returns to California Stores?Published on July 31, 2018
Almost anywhere you go in the United States, shopping is part of the culture. With so much commerce occurring on a day-to-day basis, it’s only natural that some people receive items that are not in the condition they expected. In such circumstances, returns are normal and expected. Recently, however, a situation arose highlighting the fact that returns can cause more issues than you might think. A 23-year-old man faces six felony charges for making fraudulent returns at Walmart. According to KSWT, a CNN affiliate, Thomas Frudaker conducted the questionable transactions at over 1,000 Walmarts in the last 18 months.
The laws that govern fraud are complex. A Los Angeles fraud defense attorney can keep an honest misunderstanding from turning into a criminal charge. If you’re facing a fraud investigation in the Los Angeles area, contact Spolin Law P.C. today. Our lawyers understand how fraud cases progress, and will be able to help you throughout every step of the way.
Missing Parts Raise Concern Over Returns
Frudaker attracted suspicion when he attempted to return a computer in Yuma, Arizona. Parts were apparently missing from the machine, prompting authorities to look into Frudaker’s purchasing habits. It was discovered that, over the last year and a half, he had made similar returns at over 1,000 Walmarts across the United States.
For making roughly 1.3 million dollars worth of false returns, Frudaker faces six felony charges. Among his counts are theft, fraudulent schemes, and criminal damage. His bail was set at $40,000.
Return Fraud is Theft in California
California Penal Code defines theft as taking something, intentionally and unlawfully, with the intent to deprive the true owner of its use or enjoyment. If you obtain property that isn’t yours through false pretenses, falsity, or through other means of deceit, you have committed theft by fraud. Some common examples of return fraud are:
- Returning an item you know to be stolen, by yourself or someone else, for money or store credit
- Forging a receipt to show you purchased an item that you did not
- Forging a receipt to show you purchased an item for more than you actually paid
- Returning an item to a different store for more than you originally purchased it for
- Acquiring an item at a store and returning it before purchasing it
Return fraud can be classified as a misdemeanor or a felony in California. What specific charge you face depends on the value of what you attempted to return. Penalties for return fraud range from one to three years in prison, as well as fines between one and ten thousand dollars.
Facing Charges for Fraudulent Returns? Call Us Today for Help
Being found guilty of return fraud hinges largely on intent. In order for a theft crime to be proven, it must be shown that you both knew and intended to return something you did not purchase. Whether you intentionally and knowingly did something depends on a wide range of factors. It’s possible that not all these factors have been considered in your case.
A skilled fraud attorney will be able to weigh all these factors while putting together your defense. If you’re facing a fraud investigation in the Los Angeles area, your first call should be to Spolin Law P.C.. Whatever your case is, our lawyers have the experience to provide you with a comprehensive defense.
Theranos Founder Indicted of Federal Wire Fraud Charges in CaliforniaPublished on July 2, 2018
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.
Dozens Charged with Criminal Offenses in Mexican Mafia Jail SweepPublished on June 27, 2018
Dozens of members of the notorious Mexican Mafia were recently arrested in a crackdown due to increased criminal activity occurring in Los Angeles County jails. Federal agents worked with local police in a coordinated operation that was the result of two cases. These cases resulted in 32 suspects being taken into federal custody, in addition to the several dozen people named who were already incarcerated. The cases named 83 people. Some of these people avoided justice, and remain fugitives.
Those named in the case will face a variety of charges and possible sentences. If you or someone you know has been charged with a crime in the Los Angeles area, contact a Los Angeles criminal defense attorney at Spolin Law P.C.. For a free, confidential case evaluation, call us at (310) 424-5816 today.
Charges the Mexican Mafia Members May Face
The operation targeting Mexican Mafia members was part of a large federal investigation into the gang’s activities. Many of those named by the report were charged as part of a racketeering conspiracy. Through an elaborate communication network, gang leaders distributed orders to lower-ranking agents. This network allowed the leaders to control gang territory, collect taxes on contraband, and even arrange for those who disobeyed the gang’s wishes to be assaulted.
Drug trafficking made up a large portion of the gang’s activities. The gang used their extensive contacts to facilitate drug sales all over the Los Angeles area. In some instances, they even introduced drugs into prisons to be sold. Members would purposefully get arrested for minor crimes to smuggle drugs in.
Location of Mexican Mafia Leaders
The Mexican Mafia is a recognized presence on the streets of Los Angeles. They have used their vast network of influencers and informants to establish themselves as a powerful force in the prison system. In addition to smuggling drugs, prosecutors say that high-ranking gang members were able to orchestrate all sorts of illicit activity while behind bars. Murders, attempted murders, assaults, and kidnappings were all executed on orders that came from prisoners.
Not only did the Mexican Mafia conduct a vast array of illegal business from inside prison, they also took a cut of any other business being conducted. Any organization that wanted to sell contraband was forced to give a portion of their stock to the Mexican Mafia. There was even a period of time when the gang collected a share of commissary sales.
Levels of Mexican Mafia Operatives
According to prosecutors, the gang members working throughout the prisons operated at various levels of the organization’s hierarchy. These started with the highest-ranking officials who made the most important decisions. Their second in command handled the day-to-day gang business. There were also several high-ranking women, or “secretaries,” making sure communications were delivered both in and out of prisons.
I’m Facing a Criminal Charge in Los Angeles, What Can I Do?
The Mexican Mafia raids are an indication of law enforcement cracking down on criminal activity. All those indicted, even those who were already in prison, will face criminal charges. Some 500 law enforcement officers were involved in the operation. This is a clear show of force. It indicates that law enforcement is placing a big target on gang-related activity, and casting their net wide.
Being linked to a crime of any nature can be terrifying. You may fear for your reputation, your job, or even your personal safety. If you’re facing a criminal charge in the Los Angeles area, contact Spolin Law P.C. to talk to a knowledgeable criminal defense attorney. The criminal justice system can be a scary place, and you shouldn’t have to face that fear alone. Call us today at (310) 424-5816, or reach out online for a free case consultation.
Do I Need an Attorney for a Criminal Case Appeal?Published on June 6, 2018
Appealing a criminal case is vastly different than trying a criminal case. Do you need an attorney to handle your criminal case appeal? The short answer is, no – you do not. You have the right to act on your own behalf – or pro se – for your appeal. While it’s not prohibited, it is not necessarily recommended. Appeals are rather difficult and require a skill set that not even all attorneys possess.
A Los Angeles criminal appeals attorney from Spolin Law P.C. can help. If you’ve been convicted of a criminal offense and wish to appeal, contact us today at (310) 424-5816 to schedule a free case consultation.
Trial Work vs. Appellant Work
Trying a criminal case is vastly different than appealing a court’s decision in the same case. Reasons you may want to consider a criminal appeal include:
Once a criminal trial begins, it moves at a relatively fast pace. At trial, criminal defense attorneys must pay careful attention to everything happening in the courtroom and raise objections on the record. This is important because those objections could mean the difference between winning or losing a future appeal.
Unlike a criminal trial, a criminal case appeal moves quite slowly. You’ve probably heard about appeals taking years to move through the process. That’s true. While criminal defendants have a constitutional right to a speedy trial, there is no right to a quick appeal.
The U.S. Constitution gives everyone the right to a jury trial where a defendant’s fate is in the hands of their peers, not solely in the hands of a judge. In a criminal case appeal, there is no jury. The attorneys make oral arguments either before a judge or panel of three judges depending on the jurisdiction where the appeal takes place.
Arguing before a jury is much different than making opinions before a judge. Experienced criminal trial lawyers are highly adept at reading a jury and crafting their arguments so jurors understand. Appellant lawyers, on the other hand, must be prepared to answer questions posed by the judge that could involve minute details about law and procedure.
Extensive Research & Writing
Before an appeal even gets to a judge, your attorney will have likely spent hours studying the law, reading trial transcripts, and determining if criminal procedure was followed to the letter. This is how criminal defense attorneys make their case for your appeal. While doing their research, your attorney will outline a legal brief. This is the document they send to the court, and upon which the court decides if it will or will not hear your appeal.
Intricate Legal Arguments
We’ve already how established how important a well-written and persuasive a legal brief must be. But what’s actually in the brief? Included in this important document are complex legal arguments that delve deep into the complex details of the law.
Criminal trial attorneys know the law inside and out. Appellant attorneys take that knowledge and craft an argument explaining not only the law, but how and why the trial court below applied the law incorrectly in your case. This is an extremely difficult obstacle to overcome, because appellant courts are hesitant to tell other courts they were wrong.
Contact Spolin Law P.C. for Help With Your Criminal Case Appeal
The attorneys at Spolin Law P.C. know what is at stake when you’ve been convicted of a crime. An appeal may help you get your life back on track. Appealing on your own is possible, but your chance of winning may be decreased simply because you don’t know the legal system like our highly-skilled attorneys do.
Southern CA Insurance Agents Accused of Policy SchemePublished on May 23, 2018
In March 2018, four life insurance agents in California were arrested for stealing $1.9 million in advance commissions. According to authorities, they accomplished this by submitting fraudulent life insurance applications.
Insurance fraud is a serious charge that may negatively impact every facet of your life. If you are under investigation for this offense, you should reach out to a highly skilled Los Angeles fraud defense attorney at Spolin Law P.C.. Call us at (310) 424-5816, or reach out through our online form to schedule a free case consultation.
Information on the Southern CA Insurance Policy Scheme
Mohammed Kakooza (44), Margret Birabwa (35), Michael C. Monday (43), and Denis E. Osikol (36) were all involved in this newsworthy life insurance policy scheme. Kakooza created a referral program and paid life insurance applicants $25 to $50 for referring their family members and friends. Authorities explained that some applicants were told they were applying for life insurance, and that Kakooza would reach out to them with premium payment details.
In some cases, premium payments were paid for from the bank accounts of Kakooza and the other three men rather than the applicants. According to authorities, life insurance applications were submitted with forged signatures, and the applicants knew nothing about them. False information about occupation, income, network, and beneficiaries was included on these applications.
Although the majority of these policies were processed and placed without any issues, they eventually lapsed because the premiums weren’t being paid. Between May 2013 and July 2017, Monday and Osikol submitted more than 600 fraudulent applicants to more than a dozen life insurance companies.
More than $1.2 million in commissions were deposited into Birabwa’s bank account while almost $700,000 were deposited into Kakooza’s bank account and more than $12,000 were deposited into Osikol’s bank account. Although Birabwa and Kakooza collected most of the commission money from the insurance companies, Monday and Osikol did receive some money directly from Birabwa and Kakooza.
These four men were arrested after a joint investigation by the California Department of Insurance and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. In the event they are found guilty, each man will each spend between 16 and 25 years in jail.
California Insurance Commissioner Dave Jones explained that he does not tolerate dishonest insurance agents who scam both consumers and insurance companies. He hopes that the arrest of these Southern California insurance agents will warn other agents who are committing similar crimes.
What is Insurance Fraud?
Insurance fraud can occur with life insurance policies, health insurance plans, car insurance, homeowners insurance, and more. One example of this crime is creating illegitimate applications in an attempt to make money from an insurance company.
Insurance fraud may also occur when someone intentionally destroys their home or stages a motor vehicle accident so they can be compensated by their insurer. Regardless of the details, this type of fraud may lead to harsh penalties that can take away your freedom.
Contact Spolin Law P.C. for Help Today
If you’ve been arrested for insurance fraud, you should reach out to a criminal defense attorney from Spolin Law P.C. as soon as possible. For a free, initial case evaluation, contact us today at (310) 424-5816.
Backpage CEO Pleads Guilty to Money Laundering ChargesPublished on May 9, 2018
The chief executive officer (CEO) of Backpage.com, a classified advertising website that launched in 2004, recently pleaded guilty to state and federal money laundering and conspiracy charges. If found guilty of these offenses, he faces a lengthy prison sentence and large fines.
Are you facing charges for money laundering? If so, your future may be at stake. This makes it crucial to contact an experienced Los Angeles fraud attorney at Spolin Law P.C.. Call us at (310) 424-5816 today, or reach out through our online form to protect your rights and freedom.
What is Backpage?
When classified advertising in newspapers began to decrease in popularity and websites such as Craigslist became the go-to for classified ads, Backpage hit the internet. This website featured a variety of categories typically found in newspaper classified sections. It also contained an adult section with subcategories for sex work professions. There has been a great deal of controversy regarding this portion of the site. Many individuals believe it was used to promote underage sex trafficking and contributed to the rise of prostitution.
The Story Behind the Backpage CEO’s Money Laundering Charges
Since Backpage’s inception, the site brought in a half-billion dollars through risqué advertising for escorts and massages, as well as other services and goods. According to authorities, the site was created to traffic underage victims. The CEO of Backpage, Carl Ferrer, stated that they attempted to remove these ads from the site.
In April 2018, Ferrer pleaded guilty to state and federal charges including three counts of money laundering and one count of conspiracy. The U.S. Justice Department shut down the website, and Ferrer agreed to testify in ongoing prosecutions against others at Backpage.
Ferrer could spend up to five years in prison and pay $250,000 in fines in the federal case in Arizona. Backpage could face a fine of $500,000 because of its money laundering and conspiracy plea in the Arizona case.
California Attorney General Xavier Becerra explained that human trafficking is modern-day slavery, and that the shutdown of Backpage is a victory for survivors. He hopes that Ferrer’s conviction will help combat human trafficking across the world.
Money Laundering Defined
The practice of engaging in a financial transaction in order to conceal the amount, source, or identity of the money received is known as money laundering. Often, money laundering charges accompany selling stolen goods, tax evasion, drug trafficking, or other serious charges.
Since both state and federal laws prohibit money laundering, pleading guilty to a money laundering charge comes with serious consequences that can change your life forever. Therefore, if you are being investigated for a money laundering crime, it is in your best interest to seek legal representation immediately.
Contact an Experienced Los Angeles Fraud Attorney at Spolin Law P.C.
If you’re facing money laundering charges, Spolin Law P.C. can help. We will thoroughly investigate your case and design a strong defense strategy that can improve your situation and aid your future. Call (310) 424-5816, or reach out online to speak to a Los Angeles fraud attorney at our firm today.
Understanding Investor Fraud in the Wake of the Theranos InvestigationPublished on April 25, 2018
She was seen as the next Steve Jobs or Bill Gates, but it turns out that Elizabeth Holmes and the $9 billion blood-testing startup she founded at the age of 19 were little more than smoke and mirrors. Theranos raised over $700 million from investors eager to cash in on the promise of technology that would revolutionize blood testing. The only hitch was that their blood testing device was unable to perform as well as they hoped. Holmes continued to attract investors with false promises, effectively committing investor fraud.
Fraud charges are serious, and they bring with them harsh penalties. If you or a loved one are facing such charges, contact a Los Angeles fraud attorney from Spolin Law P.C. at (310) 424-5816 to schedule a free case consultation.
What Will Happen to the Theranos CEO?
Unlike Bernie Madoff or Martin Shkreli, who received criminal sentences for defrauding their investors, Holmes has so far escaped criminal prosecution. This March, she settled a complaint with the Securities and Exchange Commission (SEC), which accused her and Theranos of fraud. Neither she nor the company admitted to any wrongdoing. In exchange, Holmes has agreed to:
- Pay a $500,000 fine.
- Not serve as director or officer of a publicly traded company for 10 years
- Return 18.9 million shares of Theranos stock.
- Give up her majority voting control of the company by swapping from Class A to Class B Common shares.
These penalties are not particularly harsh. Theranos is not a publicly-traded company, so Holmes can and will continue to serve as the CEO of the company she founded in 2003. Furthermore, Holmes will avoid costly litigation with defrauded investors, because most of them agreed to not sue her after she offered them shares in Theranos’ new preferred stock.
Holmes Targeted Gullible Investors and Board Members Who Looked Past Technical Details
Few people with a solid science background backed Theranos or served on its board of directors. Instead, Holmes wooed top a-list board members such as former secretaries of state George Schultz and Henry Kissinger with grandiose promises of revolutionizing the blood testing process. Holmes’ strength was in confidently selling the future impact of her device on multiple industry sectors, from health care to defense.
Holmes said her company was able to conduct a complete battery of tests from just one drop of blood, where traditional testing would require several vials. But when pressed for technical details, Holmes remained elusive, saying, “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”
Theranos Will Likely not Survive After Fraud Allegations
Theranos has struggled since a 2015 Wall Street Journal article revealed that its blood testing technology was not performing as well as Holmes claimed. While she and Theranos never admitted to lying about their technological prowess, investors began to panic. Her combative television appearances became increasingly bizarre as more and more evidence of the investor fraud emerged.
Walgreens, Theranos’ partner in a blood testing business, jumped ship, which leaves the company without broad access to customers. The lack of demand prompted Theranos to shut down some of its labs and to lay off almost half of its employees. Yet, Theranos is still in business, and Holmes is still its CEO. The firm is now developing a new “mini-lab” blood testing apparatus. But in all likelihood, the taint of Holmes’ monumental fraud will keep Theranos from ever attaining its prophesied status.
Will Holmes Get Charged with a Crime?
Investor fraud may result in civil lawsuits from the victims, criminal prosecution from the government, and civil action from the SEC. So far, Holmes has faced only charges from the SEC, which she promptly settled. She was able to ward off civil lawsuits with investors through a share swap. But it’s hard to believe that the suspected perpetrator of a $700 million fraud will escape criminal charges.
The U.S. Attorney’s Office in San Francisco is investigating Holmes, but has not shared any information with the press. According to former SEC Enforcement Division lawyer and legal head of the Office of the Special Inspector General for the Troubled Asset Relief Program (SGTARP), “the fact that the alleged fraud was not just financial but also presented a potential harm to public safety is a further factor that could motivate DOJ to investigate.”
Facing Fraud Charges? Call Spolin Law P.C. for Help
To convict you of investor fraud, a prosecutor must show beyond a reasonable doubt that you knowingly lied to investors with the intent of convincing them to give you money. In these circumstances, the assistance of an experienced Los Angeles fraud attorney from Spolin Law P.C. is essential. If you believe you are under investigation for fraud, now is the time to get legal help.