Elizabeth Holmes’ sentence brings into focus the troubles plaguing our culture of incarceration

There has been tremendous buzz surrounding the recent sentencing of Theranos Founder Elizabeth Holmes to 11.25 years in prison. Some have argued that, in light of the life sentence suggested by the Federal sentencing guidelines, Ms. Holmes’ sentence stands as another example of the disparities faced by minority and underprivileged defendants contrasted with their white, privileged counterparts in the criminal justice system. Others argue that Ms. Holmes has been given a needlessly lengthy sentence for a first-time, non-violent offender, and point to the unfairness of the fraud-loss table as a driving force for white-collar sentences. Both arguments are valid and suggest that it is time to re-examine the goals and public policy underlying our sentencing scheme, and to revamp the manner and types of sentences that can and should be imposed.

The goals of sentencing include punishment, rehabilitation, individual deterrence, and general deterrence. For decades, the primary focus in our public discourse has been on punishment and deterrence. No leader wants to be considered “soft on crime.” As a result, the United States incarcerates roughly 25% of the world’s total prison population.

Minorities unquestionably bear the brunt of our sentencing scheme. In October 2021, The Sentencing Project, a Washington, D.C.-based research and advocacy center, found that Black Americans are incarcerated at nearly 5 times the rate of White Americans, whereas Latino Americans are imprisoned 1.3 times the rate of White Americans. This has devastating consequences on minority families and communities. Individuals released from incarceration may have difficulty gaining employment, finding safe housing and experience reduced lifetime earnings. Additionally, high levels of incarceration within communities can result in increased crime rates and contribute to neighborhood deterioration. Thus, increased rates of incarceration within minority communities have had detrimental effects on these communities as a whole and actually encourage a cycle of crime.

The disparity in sentencing in the context of race stems directly from the war on non-prescription drugs, which targeted street-based drug users and traffickers. This led to unequal prosecutorial charging decisions, disproportionate sentences for non-prescription drug-related crimes, and favored pre-trial detention in these cases. Id.

On the other hand, the problem with sentencing in white-collar fraud cases, like Ms. Holmes’, is that the Federal Sentencing Guidelines, in attempting to achieve “fairness and equality” have assigned irrational and random numerical values to “loss” that overinflates the importance of this one factor. As any seasoned practitioner knows, in today’s marketplace where fraud losses are very commonly in the hundreds of millions of dollars, these loss figures will almost always mitigate in favor of decades-long, if not life, sentences. Fraud crimes often compute to staggeringly long sentences under the guidelines, despite a lack of criminal record, and other compelling mitigating circumstances that demonstrate that the defendant is not a future threat to the community. 

The bottom-line is that by focusing on punishment (and incarceration as the sole type of punishment), we have, in fact, created the problems highlighted by both critics of Ms. Holmes’ sentence. Punishment is, of course, a valid goal of sentencing, but not to the exclusion of the other goals. Indeed, by focusing solely on punishment we have created a cycle of harm to our citizens, and communities. Studies repeatedly show that lengthy incarceration fails to promote the deterrence it is presumed to promote, neither general nor specific. Without re-focusing on rehabilitation and implementing educational and vocational training and opportunities, mental health and drug treatment, and family and career counseling, we are simply throwing our money and human resources away. A renewed focus on rehabilitation would serve as an answer to all skeptics of Ms. Holmes’ sentence. It’s time for the discussion of sentencing reform to elicit an honest discussion of our goals and a reallocation of our resources.