Turns out, Elizabeth Holmes may not be a one-off

As of this writing, Theranos-founder and convicted fraudster Elizabeth Holmes is scheduled to begin her prison sentence later this month. She has asked the court to allow her to stay out of prison pending her appeal, basing her request on her ties to the community, her "good character," and the fact that she's the mother of a newborn and a toddler. Not clear whether a judge will allow her to be a stay-at-home mom, but there are plenty of mothers - most not from privileged backgrounds, of course - who also have ties to the community, "good character," and newborns and toddlers, and who are serving prison sentences. 

Anyway, however white collar and country club the prison she lands in will be, Holmes is facing serious time: a sentence of 11+ years. 

Who wouldn't want to avoid that? Especially with two little ones to care for.

Of course, as Baretta (Robert Blake) told us back int the 1970's: don't do the crime if you can't do the time. 

Oh, well.

Maybe Holmes shouldn't have conned investors into thinking that her miraculously disruptive blood testing technology worked when it didn't. 

I was thinking that Elizabeth Holmes was something of a one-off - after all, most CEO's are men; and, thus, most white collar criminals are men -  when I saw a piece in The Globe on Magellan Diagnostics.

Magellan Diagnostics is a local company that, like Theranos, makes a miraculously excellent machine for testing. In this case, lead. Like Theranos, their testing process was going to decrease the time it took to get results. The Feds are now alleging that the results were bogus. 

The former president [also CEO] and two former top officials of Magellan Diagnostics, Inc. are now facing federal charges for knowingly selling defective lead testing machines between 2013 and 2016 that generated inaccurate results for tens of thousands of children whose caregivers worried they faced lifelong health issues due to lead exposure, authorities said. (Source: Boston Globe)

Two of those three former Magellan employees - Amy Winslow and Reba Dauost (who was director of quality assurance) - are women. 

Winslow, who is now the CEO of a company called NanoImaging Services, has credentials that are even more sterling than those of Holmes.' Holmes was a Stanford dropout; Winslow graduated from Brown and Harvard Business School. Although Winslow, at 51, is older than Holmes, her picture in her LinkedIn profile shows her to be an attractive blonde. 

Winslow and her colleagues:

...are accused of knowing the machines — then marketed under the names of LeadCare Ultra, LeadCare II, and LeadCare Plus — had a manufacturing flaw that generated false negatives that left caregivers wrongly believing children were safe, according to the office of US Attorney for Massachusetts Rachael Rollins.

The allegations are pretty serious, claiming that the trio lied to both their customers and the FDA about just how reliable their tests were.  

All three are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to defraud an agency of the United States and introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead, according to Rollins’ office.

Supposedly, the three Magellan executive knew that the devices didn't work in 2013, but went ahead and sold them anyway. And sell they did, reaching 50% market share for U.S. lead testing by 2017. The Feds further allege that they deliberately kept information about the flawed machines from the FDA. (The devices were recalled by the CDC and FDA in 2017.)

The suggestion is that the Magellan crew sat on news that their machines didn't work because they were hoping to get acquired. The company was acquired in 2016, and Winslow's piece of that pie was $2M. 

“It is alleged that Winslow told a Magellan employee to stop studying the malfunction in LeadCare II devices because Magellan needed to maintain ‘plausible deniability,’ ” federal prosecutors allege. The FDA was finally notified of the flaws in 2017 after the sale, but Winslow allegedly sent a “false timeline” to the FDA that did not include internal test results from 2013, prosecutors said.

Winslow's attorney has issued a statement denying the allegations, and it's certainly possible that her deniability may be entirely plausible. We'll see.

At this point, the story is missing some similarities to that of Theranos. It's certainly not mentioned anywhere that Winslow charmed Henry Kissinger, George Schultz, and other old (and not so old) goats into falling in crush with her and her company, as Holmes did. And the Magellan story lacks the salaciousness of Holmes and her (bed)fellow Theranos exec, erstwhile lover boy Sunny Balwani. (He's facing a sentence similar to Holmes.') And the money swirling around Theranos was orders of magnitude beyond the measly $66M that Magellan was sold for. Holmes was a paper billionaire at one point. 

But it sure sounds that, at the core, Magellan was a lot like Theranos. 

Interesting that Elizabeth Holmes may not be a one-off.