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Elizabeth Holmes sentenced to more than 11 years in prison for fraud | CNN Business

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Elizabeth Holmes sentenced to more than 11 years in prison for fraud | CNN Business



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Elizabeth Holmes was sentenced to greater than 11 years in jail on Friday following her conviction in January for defrauding buyers whereas working the failed blood testing startup Theranos.

Decide Edward Davila imposed a sentence of 11 years and three months in jail, with one other three years of supervision after Holmes is launched. The sentence additionally features a wonderful of $400, or $100 for every depend of fraud. Restitution might be set at a later date. Holmes was ordered to show herself into custody on April 27, 2023. She is anticipated to attraction her conviction.

Holmes, who was discovered responsible in January on 4 fees of defrauding buyers, confronted as much as 20 years in jail in addition to a wonderful of $250,000 plus restitution for every depend.

Legal professionals for the federal government requested for a 15-year jail time period, in addition to probation and restitution, whereas Holmes’ probation officer pushed for a nine-year time period. Holmes’ protection group requested Davila, who presided over her case, to condemn her to as much as 18 months of incarceration adopted by probation and group service.

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Earlier than the sentencing was introduced, a tearful Holmes spoke to the court docket in San Jose, California. “I cherished Theranos. It was my life’s work,” she stated. “The individuals I attempted to become involved with Theranos had been the individuals I cherished and revered essentially the most. I’m devastated by my failings.”

She additionally apologized to the workers, buyers and sufferers of Theranos. “I’m so, so sorry. I gave the whole lot I needed to construct our firm and to save lots of our firm,” she stated. “I remorse my failings with each cell in my physique.”

“The decide imposed a strong sentence that confirms that fraud can’t masquerade as innovation in Silicon Valley,” stated George Demos, a former SEC enforcement lawyer and adjunct legislation professor at UC Davis. “When given the chance to talk, Elizabeth Holmes made an announcement that she takes duty for Theranos however didn’t say she takes duty for the fraud.”

In arguments earlier than the decide on Friday over her sentence, Kevin Downey, certainly one of Holmes’ legal professionals, stated that not like different defendants in company fraud circumstances, the Theranos founder didn’t categorical greed by cashing out shares or spending cash on “yachts and planes.” As an alternative, the cash was “used to construct medical expertise.”

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Federal prosecutor Jeffrey Schenk identified that Holmes did acquire fame, admiration, and a life-style from the fraud, even when she didn’t make monetary good points. “These nonetheless are advantages she’s receiving,” he stated.

Friday’s sentencing listening to caps off Holmes’ gorgeous downfall. As soon as hailed as a tech business icon for her firm’s guarantees to check for a spread of circumstances with just some drops of blood, she is now the uncommon tech founder to be convicted and face jail time for her firm’s missteps.

Holmes, now 38, began Theranos in 2003 on the age of 19 and shortly thereafter dropped out of Stanford College to pursue the corporate full-time. After a decade underneath the radar, Holmes started courting the press with claims that Theranos had invented expertise that might precisely and reliably take a look at for a spread of circumstances utilizing just some drops of blood taken from a finger prick.

Theranos raised $945 million from a formidable checklist of buyers, together with media mogul Rupert Murdoch, Oracle founder Larry Ellison, Walmart’s Walton household and the billionaire household of former Secretary of Schooling Betsy DeVos. At its peak, Theranos was valued at $9 billion, making Holmes a billionaire on paper. She was lauded on journal covers, regularly carrying a signature black turtleneck that invited comparisons to late Apple CEO Steve Jobs. (She has not worn that look within the courtroom.)

The corporate started to unravel after a Wall Road Journal investigation in 2015 discovered the corporate had solely ever carried out roughly a dozen of the a whole bunch of assessments it supplied utilizing its proprietary blood testing machine, and with questionable accuracy. As an alternative, Theranos was counting on third-party manufactured units from conventional blood testing firms.

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In 2016, Theranos voided two years of blood take a look at outcomes. In 2018, Holmes and Theranos settled “huge fraud” fees with the Securities and Alternate Fee, however didn’t admit to or deny any of the allegations as a part of the deal. Theranos dissolved quickly after.

In her trial, Holmes alleged she was within the midst of a decade-long abusive relationship together with her then-boyfriend and Theranos COO Ramesh “Sunny” Balwani whereas working the corporate. Balwani, she alleged, tried to regulate almost each side of her life, together with disciplining her consuming, her voice and her picture, and isolating her from others. (Balwani’s attorneys denied her claims.)

In July, Balwani was discovered responsible on all 12 fees in a separate trial and faces the identical potential most jail time as her. Balwani is scheduled to be sentenced on December 7.

“The consequences of Holmes and Balwani’s fraudulent conduct had been far-reaching and extreme,” federal prosecutors wrote in a November court docket submitting concerning Holmes’ sentencing. “Dozens of buyers misplaced over $700 million and quite a few sufferers obtained unreliable or wholly inaccurate medical info from Theranos’ flawed assessments, inserting these sufferers’ well being at critical danger.”

Greater than 100 individuals wrote letters in assist of Holmes to Davila, asking for leniency in her sentencing. The checklist consists of Holmes’ associate, Billy Evans, many members of Holmes’ and Evans’ households, early Theranos investor Tim Draper, and Sen. Cory Booker. Booker described assembly her at a dinner years earlier than she was charged and bonding over the truth that they had been each vegans with nothing to eat however a bag of almonds, which they shared.

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“I nonetheless imagine that she holds onto the hope that she will be able to contribute to the lives of others, and that she will be able to, regardless of errors, make the world a greater place,” Booker wrote, noting that he continues to think about her a buddy.

Forward of the listening to, there have been additionally questions over how Holmes’ sentencing may very well be sophisticated by developments in her life after stepping down from Theranos. Holmes and her associate, Evans, who met in 2017, have a younger son. Holmes can be pregnant, as confirmed by current court docket filings and her most up-to-date court docket look in mid-October.

Mark MacDougall, a white-collar protection lawyer and former federal prosecutor, advised CNN Enterprise earlier than the listening to that the truth that Holmes has a younger youngster may influence how she is sentenced.

“I don’t know the way it can’t, simply because judges are human,” he stated.

MacDougall additionally stated he doesn’t see what an extended jail sentence accomplishes. “Elizabeth Holmes isn’t going to run a giant firm once more,” he stated. “She’s by no means going to be ready to have one thing like this occur once more.”

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Taiwan’s new leader faces China threat and voters left behind by chip boom

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Taiwan’s new leader faces China threat and voters left behind by chip boom

Taiwan’s incoming president Lai Ching-te will start his first term on Monday under pressure to raise social spending and tackle deepening economic inequality while at the same time meeting US demands to shore up defences against an increasingly assertive China.

Every Taiwanese leader since the start of free, direct presidential elections in 1996 has taken office with a message aimed at Beijing, which claims the island as its own and threatens to annex it by force if necessary.

But against the backdrop of soaring tensions in the Taiwan Strait, the demands on Lai to balance Taiwan’s security risks with assurances of safeguarding its independence are greater than on most of his predecessors.

“There have been extensive exchanges about his inaugural address with Washington, and the US has been communicating some guidelines,” said a person familiar with the discussions.

Washington is keen to ensure that Lai will stick to the China policy line of his predecessor Tsai Ing-wen, who won broad international support for her cautious handling of often turbulent cross-Strait relations, several people in Lai’s Democratic Progressive party (DPP) said.

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A US official said the American Institute in Taiwan, Washington’s quasi-embassy in Taipei, has been in contact with officials in Taiwan about Lai’s inauguration speech and to underscore long-standing US policy on cross-Strait issues.

“In this upcoming term, we’re not looking to shake things up or change things . . . ‘Status quo’ has been our byword,” the official said.

Lai’s government intends to raise Taiwan’s defence budget from 2.5% of GDP this year to 3%, but also faces the need to increase spending on social programmes © Sam Yeh/AFP/Getty Images

Lai will seek to reassure the US with a commitment to decisively strengthen Taiwan’s defences, including raising military budgets, revamping its military force structure and focusing on cost-effective and mobile weapons systems and more robust civil defence.

But he is also keenly aware of the need to address burning economic concerns among many Taiwanese, especially the young. While Lai’s government intends to raise the defence budget from 2.5 per cent of GDP this year to 3 per cent, members of his team said his top priority would be domestic reform.

Decades of economic policy have focused on supporting Taiwan’s globally leading high-tech industries such as chipmaking, leaving other parts of the economy behind. This has led to growing inequality, with 68 per cent of the population below the average income, a senior DPP official said.

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“We need to explain to the US the importance of social solidarity for the sake of our national unity,” the official said.

Lai is likely to struggle building such unity from day one. He was elected with just 40 per cent of the vote in a three-way race in January and lacks a DPP majority in the legislature.

He has pledged to prioritise policies with cross-party support. But hopes for building consensus dwindled on Friday after parliament descended into brawls over opposition proposals to expand its power via bills that would allow the legislature to find government officials guilty of contempt — a criminal charge punishable with prison time. The DPP called such legal changes unconstitutional.

Taiwan lawmakers argue an exchange blows during a parliamentary session in Taipei on Friday
Taiwan’s parliament on Friday descended into scenes of chaos, dousing hopes of co-operation between Lai’s incoming administration and the opposition KMT © Ann Wang/Reuters

Lai’s policies include a reform of the underfunded national health insurance, an expansion of subsidised childcare and care for the elderly. Beyond social spending, he will also seek to shift economic policy from incentives for certain industries to creating more service sector jobs and stimulating domestic consumption.

“To give these people a sense of wellbeing and security, we need to focus on social investment and build a more universal social security system,” the DPP official said. “There will not be too much pushback against that from the opposition — they may even want to outdo us on spending on that.”

Lai has recruited a number of private-sector executives into his cabinet, most prominent among them JW Kuo, an entrepreneur and chair of semiconductor industry supplier Topco, a departure from Tsai’s preference for academics.

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But in the sensitive areas of China policy, national security and defence, the incoming president has retained almost Tsai’s entire team. Her foreign minister Joseph Wu will head up Lai’s National Security Council while NSC head Wellington Koo will become defence minister.

This personnel continuity will offer stability, DPP officials hope, as China has escalated military manoeuvres close to Taiwan’s waters and airspace in recent weeks.

The new president intends to express readiness for dialogue — in line with Tsai’s practice — in his inaugural address in a sign of goodwill to Beijing, which has denounced him as a “dangerous separatist”.

Night street scene in Taipei
Decades of supporting Taiwan’s high-tech sector has left other parts of the economy behind, resulting in growing inequality © Annice Lyn/Getty Images

But Lai is also expected to restate principles outlined by Tsai that Taiwan is committed to its democratic system, that the Republic of China — its official name — and the People’s Republic of China should not be subordinate to each other and that Taiwan will resist annexation or encroachment on its sovereignty. Taiwan’s future must be decided in accordance with the will of its people, Lai will add.

Despite maintaining Tsai’s national security personnel and approach to China, some observers believe Lai’s tenure could look very different in practice. He has shown a penchant for political battle during his 28-year career in politics, in stark contrast to Tsai, a controlled, soft-spoken former trade policy official.

“As we deal with the challenges we face, we will also have to find our own voice”, said a senior member of the incoming administration, adding that Lai would “lay out his vision in his own words”.

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As mayor of the municipality of Tainan, Lai’s insistence on abolishing slush funds for city councillors triggered a revolt in the local legislature.

On a visit to Shanghai in 2014, he told Chinese scholars that Taiwanese independence was not an idea that originated with the DPP but a long-standing aspiration of the Taiwanese people, and that only if Beijing understood could the two sides find common ground — a bluntness unheard of from other visiting Taiwanese politicians.

In 2017, then Tsai’s premier, he infamously described himself as a “pragmatic worker for Taiwan independence”.

“Lai’s brain is not Tsai’s brain,” said a person who has known the incoming president for many years.

Additional reporting by Demetri Sevastopulo in Washington

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Philadelphia police make several arrests as protesters try to occupy Penn's Fisher-Bennett Hall

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Philadelphia police make several arrests as protesters try to occupy Penn's Fisher-Bennett Hall

PHILADELPHIA (WPVI) — Philadelphia police officers swarmed the University of Pennsylvania on Friday night due to a protest on campus.

Chopper 6 was overhead around 9 p.m. as police officers scuffled with some pro-Palestinian demonstrators in the city’s University City section.

Members of the Penn Gaza Solidarity said they were planning to occupy the Fisher-Bennett Hall.

A Penn spokesperson said a group of individuals entered the hall and attempted to occupy it.

“Penn Police, with support from Philadelphia Police, escorted them out and secured the building, taking several individuals into custody. The situation remains active,” said a spokesperson in a statement.

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Chopper 6 overhead as police scuffle with protesters on Penn’s campus on May 17, 2024.

The Action Cam was on the scene as officers could be seen taking some protesters away in handcuffs in the area of 34th and Walnut streets.

It wasn’t immediately clear how many people were arrested.

Before dispersing just before 11 p.m., demonstrators marched from the campus to the Penn Museum and then to Franklin Field, where commencement ceremonies are being held in the coming days.

Protesters say they decided to take over Fisher Bennett Hall because Penn administrators failed to meet their demands and refused to negotiate in good faith. They want administrators to disclose Penn’s investments, divest from Israeli companies and depend pro-Palestine protesters.

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The protest comes a week after police dismantled a two-week encampment on the College Green.

IMAGE: The Action Cam was on Penn’s campus as Philadelphia police arrested several protesters on May 17, 2024.

Copyright © 2024 WPVI-TV. All Rights Reserved.

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Blow to UAW as Mercedes-Benz workers in Alabama vote against union

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Blow to UAW as Mercedes-Benz workers in Alabama vote against union

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Workers at a Mercedes-Benz plant in Alabama rejected joining the United Auto Workers union on Friday, a major setback in labour’s campaign to organise foreign-owned carmakers across the US south.

The National Labor Relations Board said 2,642 votes had been cast against union representation, versus 2,045 in favour. The plant assembles luxury sport utility vehicles, including electric and ultra-luxe Maybach models.

The high-profile defeat is a reversal for the UAW after its landslide victory at a Volkswagen plant in Chattanooga last month. Union leaders had hoped that vote marked the beginning of a wave of labour gains across the US south.

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The Detroit-based union, which represents more than 400,000 active workers, has said it hopes to capitalise on the record 25 per cent pay rises it won for Ford, General Motors and Stellantis employees after a strike last year.

UAW president Shawn Fain on Friday said the union would continue organisation efforts at the Vance, Alabama plant. “This isn’t fatal. This is a bump in the road. We will be back in Vance, and I think we’ll have a different result down the road,” he said.

Mercedes said it hoped its employees continued to view the company as “not only their employer of choice, but a place they would recommend to friends and family”.

Lawmakers across the south have used generous subsidies and promises of low-cost, non-union labour to attract foreign carmakers to their states since the 1970s. The union says the so-called “Alabama discount” has helped Mercedes increase its profits 200 per cent over the past three years.

The region’s “right to work” laws give workers the ability to opt out of paying union dues, making it more difficult for labour organisations to support themselves financially.

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Union organisers faced far greater resistance at Mercedes than at Volkswagen. After the union announced 70 per cent of the facility’s 5,075 eligible employees had signed union cards, Mercedes replaced the plant’s chief executive, eliminated an unpopular two-tier wage plan that paid longer-serving employees more, and implemented an 11 per cent pay raise.

A double-sided sign hung on the plant’s fence urged workers to simply “vote” on the external public-facing side, but to “vote no” on the inside. Pictures of the sign went viral on social media.

Stephen Silvia, a professor at American University who studies labour relations, called it “a classic anti-union campaign”.

Mercedes previously said it respects employees’ right to organise and was providing workers with the information they needed to make an informed choice.

Local officials also fought the UAW. Alabama’s Kay Ivey, a Republican, was one of six governors who signed a letter calling the UAW “special interests looking to come into our state and threaten our jobs and the values we live by” before the VW election last month. Mercedes was one of the first car plants in Alabama and was widely credited with reviving the state’s manufacturing sector, said University of Alabama professor Michael Innis-Jiménez.

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“They are quoting this as the best place to do business because you can pay the workers less,” Innis-Jiménez said. “I think the politicians here are scared that [if the union wins] companies will just stop coming in.”

In March, Alabama passed a state law designed to complicate union organising by denying subsidies to companies that voluntarily recognise a new union.

Despite the loss, the UAW is likely to continue campaigning to organise workers at foreign-owned car plants across the country, Silvia said, but might slow the pace at which it files for representation elections. The union’s next targets may be a Hyundai plant in Montgomery, Alabama and a Toyota plant on the outskirts of St Louis, Missouri, Silvia added.

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