Elizabeth Holmes arrives at court holding hands with partner Billy Evans, and parents ahead of sentencing. I’m watching the large media scrum from 5 floors up outside the courtroom #Theranos
Holmes, looking very pregnant, is now in the building along with a large group of supporters. It’s unclear how many people will speak at this sentencing hearing and how long it may last #Theranos
We’re now seated inside the courtroom. Attorneys for both sides are at their respective tables. Holmes is with her family in an adjoining room
Holmes is at the defense table now. The courtroom is packed to the gills with reporters, supporters and a handful of curious observers who spent their morning in a long line.
A group of about 13 people was just brought in to sit in the jury box. Unclear who they are but they may be people who will speak. Judge Davila is now at the bench too
The judge is speaking about the fed. probation report and addressing the representative for the department. Probation has recommended 9 years for Holmes.
Davila said he reviewed all the documents associated with the case. He's now addressing some of the objections before he will go over the sentencing guidelines
Davila said he will read the Pre sentencing report by probation line by line and compare how that relates to the sentencing guidelines.
Holmes' attorney, Kevin Downey, is objecting to the constitutionality of "acquitted conduct." Davila, as it stands, can factor in evidence from all the charges (even those Holmes was acquitted of) in his sentence.
Probation says Holmes acquitted conduct was not factored into its recommendation for 9 years in federal prison.
US attorney John Bostic is arguing that Holmes' acquitted conduct should be relevant in sentencing, particularly the counts related to #Theranos patients that she was found not guilty of
Bostic argues Holmes was not guilty of intent to defraud patients, but “that does not mean she did not have a reckless disregard for patients”
Bostic is now bringing up Sunny Balwani's verdict of guilty on all 12 counts as proof the facts of the allegation Holmes was acquitted of are still sound.
Kevin Downey is now revisiting the argument that erroneous patient tests happen. "Some tests are errant," he said. (We'll never know how many bad tests #Theranos performed bc the database was lost).
Bostic responds that the issues at Theranos went far beyond what would be expected at a clinical lab and failed quality control tests 25% of the time or more. (This is all an argument about whether a sentencing enhancement should be added based on the patient counts)
Or rather the enhancement relates to whether Holmes displayed a conscious disregard or recklessness
Moving on to objection No. 2, regarding the investments
It sounds like there will be a number of objections (double digits?) that both sides will attempt to hash out. We might be here for a while.
Downey is arguing that Holmes should get a sentence reduction for acceptance of responsibility even though she has maintained her innocence. Holmes, he said, contested her intent, not the facts of what happened. Bostic says Holmes should not get points for admitting wrongdoing
"She does not acknowledge guilt," Downey says. "We don't punished defendants for exercising their trail rights." Downey acknowledges "This is not the classic example where the downward departure is granted."
They're now discussing an enhancement for being the organizer of a criminal enterprise and whether that should apply to Holmes' sentence.
Bostic: "Her authority was second to none."
Downey says the enhancement does not apply because there needs to be 5 other participants in the criminal enterprise
Attorneys are now discussing an enhancement related to the number of victims (10 or more).
Downey says the judge should not accept the dozens of people the government has put forward as victims. He says each should evaluated and there’s separate merits to find they are not victims
Bostic says that investors that invested when the fraud scheme was active should be considered victims
We’re now moving on to loss amount as a sentencing enhancement...the last of the outstanding objections
Bostic is arguing that the entire amount by c1 and c2 investors should be considered in sentencing. That would be in the hundreds of millions
Prosecutors calculated that Holmes should pay $804 million in restitution to investors
Some of these arguments feel like very heady law school courses, crossing over into constitutional arguments and beyond. The judge and lawyers are proving they’re at the tops of their respective fields
Downey says the loss amount should be calculated at $48 million to $44 million — significantly less than what the government has proposed.
We're taking a 15 minute break before going through more objections. The judge will then give his view on guidelines "before we proceed further."
We’re back after a break. First sketches from inside court of Elizabeth Holmes by @courtart are in #Theranos 
Davila will now share his ruling on the objections:
Davila said he will not use enhancement from acquitted conduct, as the probation department declined to use either.
There are several objections related to the loss calculation and the judge is evaluating each component
Davila says the court is not going to calculate to total c1 and c2 investment as loss for the sentencing enhancement.
Davila said he's going to calculate the overall investor loss by subtracting the company's overall value as of Dec. 31, 2014.
Davila says the evidence shows there are 10 or more victims, so that enhancement should apply
Davila says the loss from 10 victims (Mosley, black diamond...) totals $384 million. "At least 10 investors qualify as victims and support a 2 point adjustment," Davila says.
Davila is sustaining the defense objection against adding an enhancement for Holmes being the head of a criminal enterprise.
Davila said he is not adding a reduction for Holmes accepting responsibility. "She maintains that she did nothing wrong," he said.
Davila is going through a list of other objections that are either not opposed, not relevant or are covered by his other rulings.
Judge will set a restitution hearing in the future. No date yet.
The court is now indicated its enhancements. Base offense is 7. Reasonable total loss is $121 million. 24 level enhancement there
The court finds a 2 level increase due to 10 or more victims. adjusted offence level is 33
The guideline calculation is 135-168 months, the judge says. The parties will now discuss.
That's between 11 and 14 years in prison. The judge has not given his sentence but it may very well be in this range. #Theranso @ktvu
@KTVU “The court is making a statement that the ends don’t justify the means… Ms. Holmes made a choice to defraud investors,” prosecutor Jeff Schenk argues for 15 years in prison. “A significant custodial sentence is a statement that that choice was the wrong choice.”
Schenk says the sentence should focus on “general deterrence” because white collar crimes involve calculated choices not heat of the moment decisions
Defense atty Kevin Downey is now addressing the court before Elizabeth Holmes is sentenced
Downey is requesting a lower sentence than the guideline recommendations (11-14 years). He’s beginning his pitch, saying Holmes was not motivated by greed
Downey: “We know the cases that draw a stiff sentence...these are the cases with the yachts and the mansions and the parties bought with the proceeds of the financial gain.”
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