An outright fraud is looking for new investors - she'll get them too. Credit Max Morse for TechCrunch via Wikipedia

Elizabeth Holmes, and her sidekick, have just been hit with criminal charges over in the US. Which seems reasonable enough, given that they raised $700 million in funding for something that never was going to work and, objectively at least, then spent near a decade lying about it all. However, there is a certain weakness in the case against them as they’ve been charged with wire fraud. This is something of a ragbag, catch all, charge. Pretty much everyone is close at least to being guilty of wire fraud which is why it’s such a useful charge. But the use of it and the use of it alone does indicate a certain weakness in the prosecution case.

The founder of a US start-up that promised to revolutionise blood testing has been hit with criminal charges.

US prosecutors said Theranos founder Elizabeth Holmes engaged in a multi-million dollar scheme to defraud investors, doctors and patients.

The charges come three months after Ms Holmes settled charges from financial regulators that she lied about the capabilities of her firm’s blood tests.

The civil charges from the SEC have indeed been laid and settled:

The criminal charges come three months after Holmes was charge in a civil suit by the Securities and Exchange Commission with “massive fraud”. Theranos and Holmes agreed to settle the charges without admitting or denying any wrongdoing. She paid a $500,000 penalty, returned millions of shares to the company and relinquished her company voting power under the terms of the settlement. She was also banned from serving as an officer or director of a public company for 10 years.

The full press release on the charges is here.

A federal grand jury has indicted Elizabeth A. Holmes and Ramesh “Sunny” Balwani,

Well, OK. But it’s this which is interesting:

…accusing them of two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

If convicted, the pair face a maximum of 20 years in prison and a fine of $250,000 per count.

Don’t get this wrong, wire fraud is a real crime and people do indeed serve significant time if found guilty. But it’s also one dragged out by prosecutors when they think that the real and underlying crime is going to be difficult, perhaps too difficult, to prove. For example, if actual fraud is tough to prove to a jury, accuse people of conspiring to commit fraud using a telephone conversation – that’s conspiracy to wire fraud. A much easier thing to show.

My read on this is that only the charges of wire fraud show that the prosecution here think their case about actual fraud to be a little weak. Which is odd, given what went on, but that is my read on it.