Former Theranos chief operating officer and president Ramesh “Sunny” Balwani was sentenced to nearly 13 years in prison Wednesday for fraud, after the unraveling of the blood-testing juggernaut prompted criminal charges in California federal court against both Balwani and Theranos founder Elizabeth Holmes, who on Nov. 18 was sentenced to more than 11 years in prison.
During the sentencing hearing, attorneys for Balwani attempted to pin the blame on Holmes, telling U.S. District Court Judge Edward J. Davila that “decisions were made by Elizabeth Holmes.”
Davila had set a sentencing range of 11 years plus 3 months to 14 years, but prosecutors today sought a 15-year sentence given his “significant” oversight role at Theranos’ lab business.
The final guideline sentence was 155 months, plus three years of probation. Davila set a Mar. 15, 2023, surrender date.
Sunny Balwani, former president of Theranos Inc., arrives at federal court in San Jose, California, on Wednesday, Dec. 7, 2022.
David Paul Morris | Bloomberg | Getty Images
Balwani and Holmes, former romantic partners, helmed Theranos as the company enjoyed a meteoric rise, attracting backers ranging from the DeVos family to news magnate Rupert Murdoch. It was one of Murdoch’s publications, The Wall Street Journal, that first reported on irregularities with Theranos’ purportedly revolutionary blood-testing machines.
As COO, Balwani managed both the laboratory business and the financial aspects of the company. Theranos was marred with repeated failures during his tenure, including falsified documents and erroneous test results.
“I am responsible for everything at Theranos,” Balwani said in a message to Holmes. Balwani assumed broad responsibility for day-to-day operations at the company.
Theranos claimed the machines required just a few drops of blood to run and could execute more than 1,000 tests. In reality, the Journal reported the company could only process a little over a dozen tests. The Journal’s reporting eventually prompted the company’s dissolution in 2018 and, later, the arrest of Balwani and Holmes on fraud charges.
Balwani’s sentencing in federal court marks the end of the Theranos saga, which enthralled the public and prompted documentary films and novel treatments.
With a star-studded investor list, a captivating founder who drew comparisons to Apple’s Steve Jobs, and a potentially revolutionary technology, the company for a time represented the apex of Silicon Valley ingenuity.
The revelations about Theranos brought about a stunning fall from grace for both Balwani and Holmes, who were in a relationship for much of their tenure at the company. Holmes accused Balwani of abuse in court proceedings, providing text messages and contemporaneous notes from their relationship as evidence.
“Kill the old Elizabeth,” Balwani purportedly told her.
Balwani perpetrated a “decade-long campaign of psychological abuse,” Holmes’ lawyers argued. Balwani is nearly 20 years older than Holmes, who testified that he managed the lab and financial side of the business.
This is a developing story. Please check back for updates.
SAN DIEGO — Aaron Judge has issued his ruling: Court remains in session in the Bronx.
Judge is staying with the New York Yankees on a $360 million, nine-year contract, according to a person familiar with baseball’s biggest free agent deal ever.
The person spoke to The Associated Press on Wednesday on condition of anonymity because the AL MVP’s contract had not been announced.
Judge, who hit an American League record 62 homers last season, will earn $40 million per year, the highest average annual payout for a position player. The contract trails only Mike Trout’s $426.5 million deal with the Los Angeles Angels and Mookie Betts’ $365 million pact with the Los Angeles Dodgers for biggest in baseball history. Trout and Betts were already under contract when they signed those deals.
The Yankees made a long-term offer to Judge before last season that was worth $213.5 million over seven years from 2023-29. But the outfielder turned it down in the hours before opening day in April.
The 6-foot-7 Judge bet on himself — and won.
Judge surpassed Roger Maris’ AL home run mark to power New York to an AL East title. He also tied for the major league lead with 131 RBIs and just missed a Triple Crown with a .311 batting average.
New York was swept by Houston in the AL Championship Series, but Judge became the first AL MVP for the Yankees since Alex Rodriguez in 2007.
By rejecting the Yankees’ preseason offer, Judge gained $146.5 million and an extra two guaranteed seasons. The Northern California native also visited with the San Francisco Giants last month, and there likely were more teams monitoring the market for the slugger who turns 31 in April.
Judge’s decision will have a domino effect on several teams and free agents. His status held up at least some of New York’s offseason plans — given the size of the contract — but general manager Brian Cashman made it clear his team would wait patiently while Judge contemplated his options.
In the end, that approach worked.
“So we’ll wait, we’ll wait for this process to play out,” Cashman said Monday at baseball’s winter meetings in San Diego. “And that means staying active in the conversations and negotiations.”
Judge, 30, was selected by New York in the first round of the 2013 amateur draft and made his big league debut in 2016, homering in his first at-bat.
A year later, he was one of baseball’s breakout stars. He hit .284 with 52 homers and 114 RBIs in 2017, winning the AL Rookie of the Year award. The four-time All-Star has 220 homers and 497 RBIs in seven big league seasons.
“A guy of his stature and his greatness hopefully spends his entire career into Monument Park and into the Hall of Fame as a Yankee,” New York manager Aaron Boone said Tuesday.
The average annual value of Judge’s deal trails only New York Mets pitchers Max Scherzer and Justin Verlander, at $43.3 million. Verlander’s deal was reached Monday and hasn’t been announced, but a person familiar with it told the AP he would earn $86.7 million over two years.
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Blum reported from Qatar.
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AP Baseball: https://apnews.com/hub/MLB and https://twitter.com/AP—Sports
FTX CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on Friday, June 4, 2021.
Matias J. Ocner | Miami Herald | Tribune News Service | Getty Images
Sam Bankman-Fried, the disgraced former CEO of FTX — the bankrupt cryptocurrency exchange that was worth $32 billion a few weeks ago — has a real knack for self-promotional PR. For years, he cast himself in the likeness of a young boy genius turned business titan, capable of miraculously growing his crypto empire as other players got wiped out. Everyone from Silicon Valley’s top venture capitalists to A-list celebrities bought the act.
But during Bankman-Fried’s press junket of the last few weeks, the onetime wunderkind has spun a new narrative – one in which he was simply an inexperienced and novice businessman who was out of his depth, didn’t know what he was doing, and crucially, didn’t know what was happening at the businesses he founded.
It is quite the departure from the image he had carefully cultivated since launching his first crypto firm in 2017 – and according to former federal prosecutors, trial attorneys and legal experts speaking to CNBC, it recalls a classic legal defense dubbed the “bad businessman strategy.”
At least $8 billion in customer funds are missing, reportedly used to backstop billions in losses at Alameda Research, the hedge fund he also founded. Both of his companies are now bankrupt with billions of dollars worth of debt on the books. The CEO tapped to take over, John Ray III, said that “in his 40 years of legal and restructuring experience,” he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” This is the same Ray who presided over Enron’s liquidation in the 2000s.
In America, it is not a crime to be a lousy or careless CEO with poor judgement. During his recent press tour from a remote location in the Bahamas, Bankman-Fried really leaned into his own ineptitude, largely blaming FTX’s collapse on poor risk management.
At least a dozen times in a conversation with Andrew Ross Sorkin, he appeared to deflect blame to Caroline Ellison, his counterpart (and one-time girlfriend) at Alameda. He says didn’t know how extremely leveraged Alameda was, and that he just didn’t know about a lot of things going on at his vast empire.
Bankman-Fried admitted he had a “bad month,” but denied committing fraud at his crypto exchange.
Fraud is the kind of criminal charge that can put you behind bars for life. With Bankman-Fried, the question is whether he misled FTX customers to believe their money was available, and not being used as collateral for loans or for other purposes, according to Renato Mariotti, a former federal prosecutor and trial attorney who has represented clients in derivative-related claims and securities class actions.
“It sure looks like there’s a chargeable fraud case here,” said Mariotti. “If I represented Mr. Bankman-Fried, I would tell him he should be very concerned about prison time. That it should be an overriding concern for him.”
But for the moment, Bankman-Fried appears unconcerned with his personal legal exposure. When Sorkin asked him if he was concerned about criminal liability, he demurred.
“I don’t think that — obviously, I don’t personally think that I have — I think the real answer is it’s not — it sounds weird to say it, but I think the real answer is it’s not what I’m focusing on,” Bankman-Fried told Sorkin. “It’s — there’s going to be a time and a place for me to think about myself and my own future. But I don’t think this is it.”
Comments such as these, paired with the lack of apparent action by regulators or authorities, have helped inspire fury among many in the industry – not just those who lost their money. The spectacular collapse of FTX and SBF blindsided investors, customers, venture capitalists and Wall Street alike.
Bankman-Fried did not respond to a request for comment. Representatives for his former law firm, Paul, Weiss, did not immediately respond to comment. Semafor reported earlier that Bankman-Fried’s new attorney was Greg Joseph, a partner at Joseph Hage Aaronson.
Both of Bankman-Fried’s parents are highly respected Stanford Law School professors. Semafor also reported that another Stanford Law professor, David Mills, was advising Bankman-Fried.
Mills, Joseph and Bankman-Fried’s parents did not immediately respond to requests for comment.
Bankman-Fried could face a host of potential charges – civil and criminal – as well as private lawsuits from millions of FTX creditors, legal experts told CNBC.
For now, this is all purely hypothetical. Bankman-Fried has not been charged, tried, nor convicted of any crime yet.
Richard Levin is a partner at Nelson Mullins Riley & Scarborough, where he chairs the fintech and regulation practice. He’s been involved in the fintech industry since the early 1990s, and has represented clients before the Securities and Exchange Commission, Commodity Futures Trading Commission and Congress. All three of those entities have begun probing Bankman-Fried.
There are three different, possibly simultaneous legal threats that Bankman-Fried faces in the United States alone, Levin told CNBC.
First is criminal action from the U.S. Department of Justice, for potential “criminal violations of securities laws, bank fraud laws, and wire fraud laws,” Levin said.
A spokesperson for the U.S. Attorney’s Office for the Southern District of New York declined to comment.
Securing a conviction is always challenging in a criminal case.
Mariotti, the former federal prosecutor is intricately familiar with how the government would build a case. He told CNBC, “prosecutors would have to prove beyond a reasonable doubt that Bankman-Fried or his associates committed criminal fraud.”
“The argument would be that Alameda was tricking these people into getting their money so they could use it to prop up a different business,” Mariotti said.
“If you’re a hedge fund and you’re accepting customer funds, you actually have a fiduciary duty [to the customer],” Mariotti said.
Prosecutors could argue that FTX breached that fiduciary duty by allegedly using customer funds to artificially stabilize the price of FTX’s own FTT coin, Mariotti said.
But intent is also a factor in fraud cases, and Bankman-Fried insists he didn’t know about potentially fraudulent activity. He told Sorkin that he “didn’t knowingly commingle funds.”
“I didn’t ever try to commit fraud,” Bankman-Fried said.
Beyond criminal charges, Bankman-Fried could also be facing civil enforcement action. “That could be brought by the Securities Exchange Commission, and the Commodity Futures Trading Commission, and by state banking and securities regulators,” Levin continued.
“On a third level, there’s also plenty of class actions that can be brought, so there are multiple levels of potential exposure for […] the executives involved with FTX,” Levin concluded.
The Department of Justice is most likely to pursue criminal charges in the U.S. The Wall Street Journal reported that the DOJ and the SEC were both probing FTX’s collapse, and were in close contact with each other.
That kind of cooperation allows for criminal and civil probes to proceed simultaneously, and allows regulators and law enforcement to gather information more effectively.
But it isn’t clear whether the SEC or the CFTC will take the lead in securing civil damages.
An SEC spokesperson said the agency does not comment on the existence or nonexistence of a possible investigation. The CFTC did not immediately respond to a request for comment.
“The question of who would be taking the lead there, whether it be the SEC or CFTC, depends on whether or not there were securities involved,” Mariotti, the former federal prosecutor, told CNBC.
SEC Chairman Gary Gensler, who met with Bankman-Fried and FTX executives in spring 2022, has said publicly that “many crypto tokens are securities,” which would make his agency the primary regulator. But many exchanges, including FTX, have crypto derivatives platforms that sell financial products like futures and options, which fall under the CFTC’s jurisdiction.
“For selling unregistered securities without a registration or an exemption, you could be looking at the Securities Exchange Commission suing for disgorgement — monetary penalties,” said Levin, who’s represented clients before both agencies.
“They can also sue, possibly, claiming that FTX was operating an unregistered securities market,” Levin said.
Then there are the overseas regulators that oversaw any of the myriad FTX subsidiaries.
The Securities Commission of The Bahamas believes it has jurisdiction, and went as far as to file a separate case in New York bankruptcy court. That case has since been folded into FTX’s main bankruptcy protection proceedings, but Bahamian regulators continue to investigate FTX’s activities.
Court filings allege that Bahamian regulators have moved customer digital assets from FTX custody into their own. Bahamian regulators insist that they’re proceeding by the book, under the country’s groundbreaking crypto regulations — unlike many nations, the Bahamas has a robust legal framework for digital assets.
But crypto investors aren’t sold on their competence.
“The Bahamas clearly lack the institutional infrastructure to tackle a fraud this complex and have been completely derelict in their duty,” Castle Island Ventures partner Nic Carter told CNBC. (Carter was not an FTX investor, and told CNBC that his fund passed on early FTX rounds.)
“There is no question of standing. U.S. courts have obvious access points here and numerous parts of Sam’s empire touched the U.S. Every day the U.S. leaves this in the hands of the Bahamas is a lost opportunity,” he continued.
Investors who have lost their savings aren’t waiting. Class-action suits have already been filed against FTX endorsers, like comedian Larry David and football superstar Tom Brady. One suit excoriated the celebrity endorsers for allegedly failing to do their “due diligence prior to marketing [FTX] to the public.”
FTX’s industry peers are also filing suit against Bankman-Fried. BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the former billionaire provided for the crypto lending firm.
FTX and Bankman-Fried had previously rescued BlockFi from insolvency in June, but when FTX failed, BlockFi was left with a similar liquidity problem and filed for bankruptcy protection in New Jersey.
Bankman-Fried has also been sued in Florida and California federal courts. He faces class-action suits in both states over “one of the great frauds in history,” a California court filing said.
The largest securities class-action settlement was for $7.2 billion in the Enron accounting fraud case, according to Stanford research. The possibility of a multibillion-dollar settlement would come on top of civil and criminal fines that Bankman-Fried faces.
But the onus should be on the U.S. government to pursue Bankman-Fried, Carter told CNBC, not on private investors or overseas regulators.
“The U.S. isn’t shy about using foreign proxies to go after Assange — why in this case have they suddenly found their restraint?”
Wire fraud is the most likely criminal charge Bankman-Fried would face. If the DOJ were able to secure a conviction, a judge would look to several factors to determine how long to sentence him.
Braden Perry was once a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator. He’s now a partner at Kennyhertz Perry, where he advises clients on anti-money laundering, compliance and enforcement issues.
Based on the size of the losses, if Bankman-Fried is convicted of fraud or other charges, he could be behind bars for years — potentially for the rest of his life, Perry said. But the length of any potential sentence is hard to predict.
“In the federal system, each crime always has a starting point,” Perry told CNBC.
Federal sentencing guidelines follow a numeric system to determine the maximum and minimum allowable sentence, but the system can be esoteric. The scale, or “offense level,” starts at one, and maxes out at 43.
A wire fraud conviction rates as a seven on the scale, with a minimum sentence ranging from zero to six months.
But mitigating factors and enhancements can alter that rating, Perry told CNBC.
“The dollar value of loss plays a significant role. Under the guidelines, any loss above $550 million adds 30 points to the base level offense,” Perry said. FTX customers have lost billions.
“Having 25 or more victims adds 6 points, [and] use of certain regulated markets adds 4,” Perry continued.
In this hypothetical scenario, Bankman-Fried would max out the scale at 43, based on those enhancements. That means Bankman-Fried could be facing life in federal prison, without the possibility of supervised release, if he’s convicted on a single wire fraud offense.
But that sentence can be reduced by mitigating factors – circumstances that would lessen the severity of any alleged crimes.
“In practice, many white-collar defendants are sentenced to lesser sentences than what the guidelines dictate,” Perry told CNBC, Even in large fraud cases, that 30-point enhancement previously mentioned can be considered punitive.
Bankman-Fried could also face massive civil fines. Bankman-Fried was once a multibillionaire, but claimed he was down to his last $100,000 in a conversation with CNBC’s Sorkin at the DealBook Summit last week.
“Depending on what is discovered as part of the investigations by law enforcement and the civil authorities, you could be looking at both heavy monetary penalties and potential incarceration for decades,” Levin told CNBC.
In the most famous fraud case in recent years, Bernie Madoff was arrested within 24 hours of federal authorities learning of his multibillion-dollar Ponzi scheme. But Madoff was in New York and admitted to his crime on the spot.
The FTX founder is in the Bahamas and hasn’t admitted wrongdoing. Short of a voluntary return, any efforts to apprehend him would require extradition.
With hundreds of subsidiaries and bank accounts, and thousands of creditors, it’ll take prosecutors and regulators time to work through everything.
Similar cases “took years to put together,” said Mariotti. At FTX, where record keeping was spotty at best, collecting enough data to prosecute could be much harder. Expenses were reportedly handled through messaging software, for example, making it difficult to pinpoint how and when money flowed out for legitimate expenses.
In Enron’s bankruptcy, senior executives weren’t charged until nearly three years after the company went under. That kind of timeline infuriates some in the crypto community.
“The fact that Sam is still walking free and unencumbered, presumably able to cover his tracks and destroy evidence, is a travesty,” said Carter.
But just because law enforcement is tight-lipped, that doesn’t mean they’re standing down.
“People should not jump to the conclusion that something is not happening just because it has not been publicly disclosed,” Levin told CNBC.
Could he just disappear?
“That’s always a possibility with the money that someone has,” Perry said, although Bankman-Fried claims he’s down to one working credit card. But Perry doesn’t think it’s likely. “I believe that there has been likely some negotiation with his attorneys, and the prosecutors and other regulators that are looking into this, to ensure them that when the time comes […] he’s not fleeing somewhere,” Perry told CNBC.
In the meantime, Bankman-Fried won’t be resting easy as he waits for the hammer to drop. Rep. Maxine Waters extended a Twitter invitation for him to appear before a Dec. 13 hearing.
Bankman-Fried responded on Twitter, telling Waters that if he understands what happened at FTX by then, he’d appear.
Correction: Caroline Ellison is Bankman-Fried’s counterpart at Alameda. An earlier version misspelled her name.
BANGOR, Maine — A jury in Maine awarded a now-retired state trooper $300,000 Friday after finding that the state police retaliated against him when he raised concerns about the agency’s intelligence gathering work.
George Loder, 53, filed a whistleblower lawsuit alleging that he was unfairly punished after he went to his superiors with concerns about a state police division that was gathering intelligence on people including power line protesters, gun buyers and employees at a camp for Israeli and Arab teens.
Loder claimed in the suit that after he spoke up, he was reassigned to a desk job two hours from his home and then improperly denied a transfer. He has since retired.
In his suit, Loder raised concerns about data gathering by the Maine Intelligence Analysis Center, which shares information it collects with other law enforcement agencies. The lawsuit prompted questions about the center’s work and a legislative effort to eliminate it.
The Bangor Daily News reported that a jury deliberated for more than five hours before finding that the agency had violated the state whistleblower protection act.
The state police have defended the data gathering and intelligence work and denied that any retaliation occurred.
COVINGTON, Ky. — A Kentucky man has been convicted of strangulation and domestic violence, three years after he was one of hundreds pardoned during former Kentucky Gov. Matt Bevin’s last days in office.
Joheim Bandy, 20, was found guilty by a jury in Kenton County this week, The Kentucky Enquirer reported. Since his 2019 pardon, Bandy has been charged in three separate strangulation cases, the newspaper reported.
Bandy was 15 when he was given a 13-year prison sentence for robbery and assault, according to court documents. He had served two years of that sentence when he was fully pardoned by Bevin.
Bevin wrote in the document that Bandy is “turning his life around,” and “I am confident that he will do great things with his life.” The Republican issued hundreds of pardons following his failed reelection bid, attracting criticism from lawmakers, prosecutors and victims who were outraged that violent felons were being released.
“The pardon (Bandy) received was shockingly irresponsible and it nearly cost a 22-year-old mother her life,” Kenton Commonwealth’s Attorney Rob Sanders said.
In the strangulation case, a victim identified in court documents as the mother of Bandy’s child, told Covington police officers Bandy “pinned her against the wall, placing his hands around her neck, and restricting her ability to breathe.”
Sanders said another trial for Bandy is scheduled to begin in February.
Patrick Baker, another man pardoned by Bevin, was sentenced earlier this year to 42 years in federal prison for a 2014 drug robbery killing, the same crime he was pardoned for. That pardon had drawn particular scrutiny after media reports revealed that Baker’s family had political connections to Bevin and hosted a fundraiser for the former governor. Baker was convicted of murder last year in a federal trial.
CANBERRA, Australia — A prosecutor said Friday he had dropped a rape charge against a former government adviser because of the life-threatening trauma a trial would cause the woman allegedly assaulted in a Parliament House office.
Former government staffer Brittany Higgins alleges a more senior colleague, Bruce Lehrmann, 27, raped her in a minister’s office after a might of heavy drinking in March 2019.
The Associated Press does not usually identify alleged victims of sexual assault, but Higgins has chosen to identify herself in the media.
Director of Public Prosecutions Shane Drumgold said he dropped the case based on medical evidence that a trial could cost Higgins’ life.
“I’ve recently received compelling evidence from two independent medical experts that the ongoing trauma associated with this prosecution presents a significant and unacceptable risk to the life of the complainant,” Drumgold told reporters.
Higgins was in a hospital receiving the care and support she needed, her friend Emma Webster said in a statement to Australian Broadcasting Corp. While the decision to drop the case was disappointing, Higgins’ heath came first, the statement said.
Drumgold said there was a “reasonable prospect” that a trial would end in a conviction.
“In light of the compelling independent medical opinion and balancing all factors, I’ve made the difficult decision that it is no longer in the public interest to pursue a prosecution at the risk of a complainant’s life,” he said.
Lehrmann’s lawyers did not immediately comment.
Lehrmann had pleaded not guilty to a charge of sexual intercourse without consent and his trial in the Australian Capital Territory Supreme Court ended without a verdict in October.
A judge discharged the jury while they were deliberating their verdict after a juror had been found to be researching academic publications on sexual assault, which amounted to juror misbehavior. The jury was supposed to reach its verdict solely on the evidence presented during the 12-day trial.
Lehrmann was to be retried in February 2023. He faced a potential 12-year prison sentence if convicted.
Complainants in sexual assault cases in the Australian Capital Territory are entitled to testify remotely via video rather than face their alleged assailants in court, but Higgins chose to attend court in person to testify.
Lehrmann did not give evidence, but claimed through his lawyers that he had no sexual contact with Higgins.
A book deal Higgins had signed was offered as a motivation for her to lie about being raped.
After the mistrial in October, Higgins gave a press conference in which she attacked the justice system.
“I chose to speak up. Speak up against rape, speak up against injustice, to speak up and share my experiences with others. I told the truth no matter how uncomfortable or unflattering to the court,” a tearful Higgins told reporters outside court.
“Today’s outcome does not change that truth. But I did speak up, I never fully understood how asymmetrical (the) criminal justice system (is), but I do now,” she added.
She recounted how she was questioned for days in the witness box and forced to surrender her telephones, messages, photos and data to Lehrmann’s lawyers. Lehrmann exercised his right not to give evidence.
“My life has been publicly scrutinized, open for the world to see. His was not,” Higgins said.
Drumgold on Friday praised her bravery.
“During the investigation and trial, as a sexual assault complainant Ms. Higgins has faced a level of personal attack that I’ve not seen in over 20 years of doing this work,” Drumgold said.
“She’s done so with bravery, grace and dignity and it is my hope that this will now stop and Ms. Higgins will be allowed to heal,” he added.
Higgins has become a household name in Australia since she went to the media last year with her accusations that the former government had treated her rape allegation, when she was 24, as a political problem and failed to adequately support her.
The case sparked nationwide protests as an example of a toxic work culture in Australian politics that is criticized as hostile toward women.
She quit her government job in January 2021 and then made a statement to police about the then-two-year-old alleged rape.
Then-Prime Minister Scott Morrison responded in February 2021 by apologizing to Higgins in Parliament for the “terrible things” that she had endured in the building.
LOS ANGELES — A federal judge threw out a lawsuit against the maker of an anti-malarial drug blamed for causing psychotic behavior and neurological damage to U.S. servicemembers, ruling that the case had no right to be filed in California.
The proposed class-action case brought last year by an Army veteran accused Roche Laboratories Inc. and Genentech Inc. of intentionally misleading the Department of Defense and the Food and Drug Administration about the dangers of mefloquine, the generic version of the drug Lariam.
Similar cases had been brought in Canada and Australia, but the lawsuit in federal court in Northern California was the first large-scale case of its kind in the U.S., attorneys said.
The U.S. military, which developed the drug during the Vietnam War, was once its largest user to combat malaria. It was given to hundreds of thousands of troops sent to Afghanistan and Somalia.
Roche, which was granted the intellectual property rights and won FDA approval for Lariam in 1989, said it manufactured its last lots for U.S. distribution in 2005. Those drugs expired in 2008 — a year before the company’s 2009 merger with Genentech.
The Pentagon continued to distribute generic versions of the drug, though elite Army units were ordered to stop using mefloquine in 2013 after the FDA put a black box warning on it after it was found to cause permanent brain damage in rare cases. The warning said it caused side effects such as dizziness, loss of balance and ringing in the ears that could become permanent.
The Army has mainly replaced mefloquine with drugs found to be safer.
John Nelson of Florida brought the suit after he said he became permanently disabled from taking the drug during his Army service from 2005 to 2015. Nelson said he never experienced any neuropsychiatric symptoms until he began taking mefloquine just before being stationed in Afghanistan.
U.S. District Court Judge Trina Thompson ruled in San Francisco on Monday that Nelson had sufficiently alleged that the manufacturer knew about dangers of the drug and did not warn the U.S. military.
But the judge said it was a stretch to apply a California law that holds name brand manufacturers responsible for warnings on the generic version of their drugs. Nelson never lived in California and Roche and Genentech were only headquartered in the state for two months while he took the drug overseas in 2009.
“It would be unfair for plaintiff to be able to bring his claims in California and, by virtue of the state’s innovator liability doctrine, he would be extended greater rights than he would be granted in his own state of residence, Florida,” Thompson wrote.
The judge noted that other possible venues — New Jersey, where Roche had been based, and Florida, where Nelson lives and Kentucky, Oregon and Tennessee where he lived previously — either don’t have similar laws that would extend liability to the original manufacturer of a generic drug or have courts that have issued opinions making such a finding unlikely.
Roche issued a one sentence statement asserting that lawyers were “forum shopping” and said it was pleased the court found the case didn’t belong in a California court.
Nelson said his symptoms went from vivid stimulating dreams that disrupted his sleep and made him anxious to having panic attacks, paranoia, insomnia and twice tried to take his own life, the lawsuit said. He was diagnosed as depressed and later as bipolar, though medications, including antipsychotics, did not help.
After attending a conference in 2020 about effects of anti-malarial drugs, Nelson suspected he may have experienced mefloquine toxicity and pursued testing that confirmed the diagnosis.
The lawsuit sought unspecified damages for negligence, failure to warn users, and fraudulent misrepresentation, among other claims. It also sought to have the companies pay for medical monitoring of those who took the drug to understand the impacts.
Attorneys for Nelson did not immediately respond to a request for comment.
JACKSON, Miss. — A federal judge will decide whether to block Mississippi from using three drugs when it puts inmates to death, and his ruling could determine whether the state carries out its next execution in about two weeks.
U.S. District Judge Henry Wingate heard several hours of arguments Monday in a lawsuit filed in 2015 on behalf of some Mississippi death row inmates. Wingate noted that one of the plaintiffs in the lawsuit, Thomas Edwin Loden Jr., is facing a Dec. 14 execution date, which was recently set by the Mississippi Supreme Court.
“The court is going to move expeditiously on this matter,” Wingate said, an indication that he could issue a decision within days.
The mother of the 16-year-old girl killed by Loden watched the court hearing. Wanda Farris of Fulton said she has waited 22 years for justice for her daughter, Leesa Gray.
“She was a sweet Christian girl, loved the Lord, had a lot of life ahead of her,” Farris told reporters outside the courtroom.
Farris’ best friend, Sondra Pearce, was also in court to listen. She said she taught Leesa in kindergarten, and she didn’t like hearing the judge and attorneys discuss whether Loden might feel pain during an execution.
“Let’s talk about Leesa and the inhumane things he put her through,” Pearce said outside the courtroom.
Wingate requested a sworn statement from Mississippi Corrections Commissioner Burl Cain about the state’s current stock of execution drugs.
Gerald Kucia, a Mississippi special assistant attorney general, told Wingate that none of the execution drugs currently in stock are expired. He said some expired execution drugs were recently destroyed by the Mississippi Bureau of Narcotics.
Attorneys for the Roderick & Solange MacArthur Justice Center sued the Mississippi prison system, saying the state’s lethal injection protocol is inhumane.
Jim Craig, a MacArthur Center attorney, said Monday that since 2019, only Alabama, Oklahoma, Mississippi and Tennessee have conducted executions using a three-drug protocol.
According to the Death Penalty Information Center, 27 states have the death penalty. Craig said a majority of death-penalty states and the federal government used a three-drug protocol in 2008, but the federal government and most of those states have since started using one drug.
“Mississippi also has no serious training of their staff before an execution takes place,” Craig said. He said the people who insert needles into a condemned inmate for the execution are not present during practice runs of the procedure.
Craig also pointed out that Alabama Gov. Kay Ivey last week sought a pause in executions. Ivey ordered a “top-to-bottom” review of the state’s capital punishment system after an unprecedented third failed lethal injection.
Kucia told Wingate that the U.S. Supreme Court has never blocked a method of execution.
“This court should not say that Mississippi’s method of carrying out executions is unconstitutional,” Kucia said.
Mississippi’s most recent execution was in November 2021 — its first in nine years. The Mississippi Department of Corrections revealed in court papers in July 2021 that it had acquired three drugs for the lethal injection protocol: midazolam, which is a sedative; vecuronium bromide, which paralyzes the muscles; and potassium chloride, which stops the heart. Cain said the drugs listed in the court records were the ones used for the execution that November. He would not say where the department obtained them.
Mississippi and several other states have had trouble finding drugs for lethal injections in recent years since pharmaceutical companies in the United States and Europe began blocking the use of their drugs for executions.
Loden joined four other Mississippi death row inmates in the federal lawsuit challenging the state’s lethal injection protocol. Mississippi revised the protocol to allow the use of midazolam if thiopental or pentobarbital cannot be obtained.
Wingate granted an injunction to prevent the state from using compounded pentobarbital or midazolam, but the 5th U.S. Circuit Court of Appeals reversed that ruling. That sent the case back to Wingate.
FORT LAUDERDALE, Fla. — A judge accepted a plea deal Monday for a man who randomly killed a Florida couple in their garage six years ago and then chewed on one victim’s face that will send him to a mental hospital for treatment.
Austin Harrouff, 25, pleaded not guilty by reason of insanity to two counts of first-degree murder and other charges for the 2016 slayings of John Stevens, 59, and his wife, Michelle Mishcon Stevens, 53.
The agreement worked out between the defense and prosecution avoids a trial that had been scheduled to start Monday before Circuit Judge Sherwood Bauer and had been expected to last three weeks.
Harrouff will be committed to a secure mental hospital until doctors and a judge agree that he is no longer dangerous. If the trial had gone forward, Harrouff could have faced life in prison.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
FORT LAUDERDALE, Fla. (AP) — A trial for a former college student who randomly killed a Florida couple in their garage six years ago and then chewed on one victim’s face was set to begin Monday.
Circuit Judge Sherwood Bauer will decide whether Austin Harrouff, 25, goes to prison for the rest of his life, or to a mental hospital. Harrouff waived a jury trial after pleading not guilty by reason of insanity to two counts of first-degree murder and other charges for the 2016 slayings of John Stevens, 59, and his wife, Michelle Mishcon Stevens, 53. He also seriously injured a neighbor who tried to help them.
The trial for the former Florida State University student has been delayed by the pandemic, legal wrangling and Harrouff’s recovery from critical injuries suffered while drinking a chemical during the attack. It is being held in Stuart, north of West Palm Beach, and is expected to last about three weeks.
Defendants are presumed sane under Florida law, meaning that Harrouff must show he had a severe mental breakdown that prevented him from understanding actions or that they were even wrong by “clear and convincing” evidence.
He has claimed he was fleeing a demon when the attack happened.
If the judge agrees he was insane, Harrouff will be committed to a secure mental hospital until doctors and a judge agree that he is no longer dangerous. Craig Trocino, a University of Miami law professor, said it would effectively be a life sentence because “it’s highly unlikely” that they would risk releasing a killer as notorious as Harrouff.
If convicted, Harrouff will be sentenced to life in prison without the possibility of parole; prosecutors waived the death penalty.
Harrouff’s parents, who are divorced, and others said he had acted strangely for weeks. His parents had set up an appointment for him to be evaluated, but the attack occurred first.
FORT LAUDERDALE, Fla. — A former college student who randomly killed a Florida couple in their garage six years ago and then chewed on one victim’s face finally goes on trial Monday, with a judge deciding whether he goes to prison for life or to a mental hospital.
Austin Harrouff, 25, has pleaded not guilty by reason of insanity to two counts of first-degree murder and other charges for his August 2016 slayings of John Stevens, a 59-year-old landscaper, and his 53-year-old wife, Michelle Mishcon Stevens, who had retired after working in finance.
The former Florida State University student has waived a jury trial, meaning Circuit Judge Sherwood Bauer will decide whether Harrouff was insane when he killed the couple, and seriously injured the neighbor who came to their aid.
The trial has been delayed by the pandemic, legal wranglings and Harrouff’s recovery from critical injuries suffered while drinking a chemical during the attack. It will be in Stuart, an hour drive north of West Palm Beach, and last about three weeks.
Prosecutor Brandon White did not respond to a call and email seeking comment. Harrouff’s lead attorney, Robert Watson, declined comment.
Under Florida law, defendants are presumed sane. For Harrouff’s defense to succeed, Watson must show that he had a severe mental breakdown that prevented him from understanding his actions or that they were wrong by “clear and convincing evidence.” Harrouff has said he was fleeing a demon when he attacked the couple.
If convicted, Harrouff will be sentenced to life in prison without the possibility of parole; prosecutors waived the death penalty.
If Harrouff is ruled insane, Bauer will commit him to a secure mental hospital until doctors and a judge agree that he is no longer dangerous. That would also effectively be a life sentence, said Craig Trocino, a University of Miami law professor, because “it’s highly unlikely” that doctors and a judge would risk releasing a killer as notorious as Harrouff.
Two mental health experts, one hired by prosecutors and one by the defense, examined Harrouff and found that he suffered an acute psychotic episode during the attack. They also found that he couldn’t distinguish between right and wrong.
Prosecutors then hired a second expert who said Harrouff was sane, but recently withdrew him saying he has serious health issues. They now have a third expert who believes Harrouff was on a drug that didn’t appear in post-arrest tests, but has not examined him.
Lea Johnston, a University of Florida law professor, said that only about 1% of felony defendants try an insanity defense because the bar to succeed is so high. About a quarter of those succeed, usually in a pretrial deal where prosecutors agree that the defendant’s mental illness meets the standard.
She said for insanity defenses that reach trial, defendants who waive a jury have the most success. Judges understand the system, she said, while jurors often worry that defendants acquitted by reason of insanity will be released sooner. They also may question whether treatment at a mental hospital works.
“There is decades of research showing that (the public) is biased against the insanity defense and it is widely misunderstood,” she said.
Harrouff’s attack made national headlines because of its brutality and randomness; he did not know the victims. He was a 19-year-old with no criminal record — a former high school football player and wrestler who was studying exercise science. He stripped nearly naked and attacked the couple in their open garage with tools that he found there. When police arrived, Harrouff was biting chunks off John Stevens’ face.
It took took several officers, an electric stun gun and a police dog to subdue Harrouff. Officers didn’t shoot him because they feared hitting Stevens.
Harrouff nearly died from chemicals he drank in the garage, which burned his digestive system.
Investigators found he purchased some hallucinogenic mushrooms a few days before the attack, but friends said he destroyed them and no trace was found in his blood. He also did Google searches for “how to know if you are going crazy.”
Harrouff’s parents, who are divorced, and others said he had acted strangely for weeks. His parents had set up an appointment for him to be evaluated, but the attack occurred first.
His father, Wade Harrouff, told TV psychologist Phil McGraw that on the night of the slayings his son left a restaurant where they had been eating without explanation. He walked two miles (three kilometers) to his mother’s house and tried to drink cooking oil. Mina Harrouff stopped him, but he poured the oil into a bowl with Parmesan cheese and ate it.
She brought him back to the restaurant. Wade Harrouff, a dentist, told McGraw he grabbed his son and said, “What is wrong with you?” He said his son raised his fist, but Wade Harrouff’s girlfriend told him to stop and he left.
The restaurant’s security video shows Austin Harrouff calmly exiting about 45 minutes before the attack. His mother, before knowing of the attack, called 911 and told the dispatcher her son seemed delusional, claiming to have superpowers and that demons were in her house.
But it was too late — Harrouff walked or ran the four miles (six kilometers) to the Stevens’ home.
Austin Harrouff told McGraw he was escaping a demon he called Daniel and only has vague recollections of the slayings.
He said he encountered Michelle Stevens in the couple’s garage. She screamed, and “then it’s a blur.”
“I don’t remember what she said — I just remember being yelled at,” Harrouff said. He said he grabbed a machete, but doesn’t remember why he killed her and her husband.
“It’s like it happened, but I wasn’t aware of it,” Harrouff said.
ST. LOUIS — A federal judge has denied a request from a 19-year-old woman to allow her to watch her father’s death by injection, upholding a Missouri law that bars anyone under 21 from witnessing an execution.
Kevin Johnson is set to be executed Tuesday for killing Kirkwood, Missouri, Police Officer William McEntee in 2005. Johnson’s lawyers have appeals pending that seek to spare his life.
His daughter, Khorry Ramey, had sought to attend the execution, and the American Civil Liberties Union had filed an emergency motion with a federal court in Kansas City. The ACLU’s court filing said the age requirement served no safety purpose and violates Ramey’s constitutional rights. But U.S. District Judge Brian C. Wimes ruled late Friday that Ramey’s constitutional rights would not be violated by the law.
“I’m heartbroken that I won’t be able to be with my dad in his last moments,” Ramey said in a statement. “My dad is the most important person in my life. He has been there for me my whole life, even though he’s been incarcerated.”
While the judge acknowledged that the law would cause emotional harm for Ramey, he found that was just one part of the court’s consideration and the law did not violate her constitutional rights.
Ramey said she was praying that Gov. Michael Parson would grant her father clemency. Johnson’s lawyers have filed appeals seeking to halt the execution. They don’t challenge his guilt but claim racism played a role in the decision to seek the death penalty, and in the jury’s decision to sentence him to die. Johnson is Black and McEntee was white.
Johnson’s lawyers also have asked the courts to intervene for other reasons, including a history of mental illness and his age — he was 19 at the time of the crime. Courts have increasingly moved away from sentencing teen offenders to death since the Supreme Court in 2005 banned the execution of offenders who were younger than 18 at the time of their crime.
In a court filing to the U.S. Supreme Court, the Missouri Attorney General’s Office stated there were no grounds for court intervention.
“The surviving victims of Johnson’s crimes have waited long enough for justice, and every day longer that they must wait is a day they are denied the chance to finally make peace with their loss,” the state petition stated.
GRAND RAPIDS, Mich. — A federal judge has denied a new trial request by two men convicted of conspiring to kidnap Michigan’s Democratic Gov. Gretchen Whitmer.
Lawyers for Adam Fox and Barry Croft Jr. alleged misconduct by a juror and unfairness by U.S. District Judge Robert Jonker following their conviction by a federal jury in August.
Jonker in a written ruling Friday shot down claims of juror misconduct and said he found “no constitutional violation and no credible evidence” to convene a new hearing.
Fox and Croft face up to life in prison when they’re sentenced Dec. 28.
Whitmer, who was reelected Nov. 8 to a second term, was never physically harmed in the plot, which led to more than a dozen arrests in 2020.
Fox and Croft’s first trial ended in a mistrial earlier this year when the jury was unable to come to a unanimous verdict. A motion for a third trial was filed in September.
Defense lawyers said a juror seated in the second trial was described by a co-worker as “far-left leaning,” was eager to get on the jury and poised to convict before hearing evidence.
The defense team’s investigator said he interviewed two co-workers who said they had heard about it but had no firsthand knowledge. A third person declined to speak to him in the parking lot.
The allegation first was raised early in the second trial. Jonker said he spoke privately to the juror, who denied saying that a vote to convict was already settled.
Separately, defense lawyers said the judge violated the rights of Fox and Croft by imposing a time limit on the cross-examination of a star government witness.
“Defendants have neither demonstrated that the jury verdict is ‘against the manifest weight of the evidence’ nor that a ‘substantial legal error has occurred’ such that the interests of justice demand a new trial,” Jonker wrote in Friday’s ruling.
Croft is from Bear, Delaware. Fox lived in the Grand Rapids area in western Michigan.
Two other men have pleaded guilty in the federal case, while two more were acquitted.
Three other men accused of supporting terrorism in the kidnapping plot were convicted in October in state court.
Joe Morrison; Morrison’s father-in-law, Pete Musico; and Paul Bellar were found guilty of supplying “material support” for a terrorist act as members of a group known as the Wolverine Watchmen. They await sentencing on Dec. 15.
They held gun training in rural Jackson County with Fox who was disgusted with Whitmer and other officials and said he wanted to snatch her.
FORT LAUDERDALE, Fla. — A former college student who randomly killed a Florida couple in their garage six years ago and then chewed on one victim’s face finally goes on trial Monday, with a judge deciding whether he goes to prison for life or to a mental hospital.
Austin Harrouff, 25, has pleaded not guilty by reason of insanity to two counts of first-degree murder and other charges for his August 2016 slayings of John Stevens, a 59-year-old landscaper, and his 53-year-old wife, Michelle Mishcon Stevens, who had retired after working in finance.
The former Florida State University student has waived a jury trial, meaning Circuit Judge Sherwood Bauer will decide whether Harrouff was insane when he killed the couple, and seriously injured the neighbor who came to their aid.
The trial has been delayed by the pandemic, legal wranglings and Harrouff’s recovery from critical injuries suffered while drinking a chemical during the attack. It will be in Stuart, an hour drive north of West Palm Beach, and last about three weeks.
Prosecutor Brandon White did not respond to a call and email seeking comment. Harrouff’s lead attorney, Robert Watson, declined comment.
Under Florida law, defendants are presumed sane. For Harrouff’s defense to succeed, Watson must show that he had a severe mental breakdown that prevented him from understanding his actions or that they were wrong by “clear and convincing evidence.” Harrouff has said he was fleeing a demon when he attacked the couple.
If convicted, Harrouff will be sentenced to life in prison without the possibility of parole; prosecutors waived the death penalty.
If Harrouff is ruled insane, Bauer will commit him to a secure mental hospital until doctors and a judge agree that he is no longer dangerous. That would also effectively be a life sentence, said Craig Trocino, a University of Miami law professor, because “it’s highly unlikely” that doctors and a judge would risk releasing a killer as notorious as Harrouff.
Two mental health experts, one hired by prosecutors and one by the defense, examined Harrouff and found that he suffered an acute psychotic episode during the attack. They also found that he couldn’t distinguish between right and wrong.
Prosecutors then hired a second expert who said Harrouff was sane, but recently withdrew him saying he has serious health issues. They now have a third expert who believes Harrouff was on a drug that didn’t appear in post-arrest tests, but has not examined him.
Lea Johnston, a University of Florida law professor, said that only about 1% of felony defendants try an insanity defense because the bar to succeed is so high. About a quarter of those succeed, usually in a pretrial deal where prosecutors agree that the defendant’s mental illness meets the standard.
She said for insanity defenses that reach trial, defendants who waive a jury have the most success. Judges understand the system, she said, while jurors often worry that defendants acquitted by reason of insanity will be released sooner. They also may question whether treatment at a mental hospital works.
“There is decades of research showing that (the public) is biased against the insanity defense and it is widely misunderstood,” she said.
Harrouff’s attack made national headlines because of its brutality and randomness; he did not know the victims. He was a 19-year-old with no criminal record — a former high school football player and wrestler who was studying exercise science. He stripped nearly naked and attacked the couple in their open garage with tools that he found there. When police arrived, Harrouff was biting chunks off John Stevens’ face.
It took took several officers, an electric stun gun and a police dog to subdue Harrouff. Officers didn’t shoot him because they feared hitting Stevens.
Harrouff nearly died from chemicals he drank in the garage, which burned his digestive system.
Investigators found he purchased some hallucinogenic mushrooms a few days before the attack, but friends said he destroyed them and no trace was found in his blood. He also did Google searches for “how to know if you are going crazy.”
Harrouff’s parents, who are divorced, and others said he had acted strangely for weeks. His parents had set up an appointment for him to be evaluated, but the attack occurred first.
His father, Wade Harrouff, told TV psychologist Phil McGraw that on the night of the slayings his son left a restaurant where they had been eating without explanation. He walked two miles (three kilometers) to his mother’s house and tried to drink cooking oil. Mina Harrouff stopped him, but he poured the oil into a bowl with Parmesan cheese and ate it.
She brought him back to the restaurant. Wade Harrouff, a dentist, told McGraw he grabbed his son and said, “What is wrong with you?” He said his son raised his fist, but Wade Harrouff’s girlfriend told him to stop and he left.
The restaurant’s security video shows Austin Harrouff calmly exiting about 45 minutes before the attack. His mother, before knowing of the attack, called 911 and told the dispatcher her son seemed delusional, claiming to have superpowers and that demons were in her house.
But it was too late — Harrouff walked or ran the four miles (six kilometers) to the Stevens’ home.
Austin Harrouff told McGraw he was escaping a demon he called Daniel and only has vague recollections of the slayings.
He said he encountered Michelle Stevens in the couple’s garage. She screamed, and “then it’s a blur.”
“I don’t remember what she said — I just remember being yelled at,” Harrouff said. He said he grabbed a machete, but doesn’t remember why he killed her and her husband.
“It’s like it happened, but I wasn’t aware of it,” Harrouff said.
President Joe Biden and Secretary of Education Miguel Cardona.
The Washington Post | The Washington Post | Getty Images
It’s been almost three years since people with federal student loans have had to make a payment on their debt, and the Biden administration recently announced that borrowers have even more time.
In March 2020, when the coronavirus pandemic first hit the U.S. and crippled the economy, the U.S. Department of Education suspended federal student loan payments and the accrual of any interest, providing borrowers extra breathing room during an especially hard financial period.
Resuming the bills for more than 40 million Americans has proven to be a massive and tricky task, and the holiday on the payments has now spanned two presidencies and been extended eight times.
Even before the public health crisis, when the U.S. economy was enjoying one of its healthiest periods in history, problems plagued the federal student loan system, with about 25% — or more than 10 million borrowers — in delinquency or default.
Experts say hardship rates are likely to only increase with the setbacks of the pandemic, the current sharp rise in prices on everyday goods and the fact that borrowers have gotten used to a budget sans student loans.
White House officials had hoped to ease the transition back into life with student loan payments by first forgiving a large swath of the debt.
Yet not long after President Joe Biden announced his plan to cancel up to $20,000 in student loans for millions of Americans, a number of conservative groups and Republican-backed states attacked the policy in the courts. Two of these lawsuits have been successful in at least temporarily halting the relief, and the Education Department closed its loan cancellation application portal this month.
With so much still up in the air, the Biden administration has pushed back the due date on student loan bills again.
“It would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement.
Here’s what borrowers need to know about getting more time.
With previous extensions of the payment pause, the Education Department provided one date for when student loan bills would resume.
This time, it left things a little more open-ended, saying that the bills will restart only 60 days after the litigation over its student loan forgiveness plan resolves and it’s able to start wiping out the debt.
Therefore, the soonest the bills could become due again would be late January, if the legal challenges clear up by the end of November, although that’s unlikely.
If the Biden administration is still defending its policy in the courts by the end of June or if it’s unable to move forward with forgiving student debt by then, it said, the payments will pick up at the end of August.
So borrowers have at least two more months without the bills and at most nine.
The U.S. government has extraordinary collection powers on federal debts and it can seize borrowers’ tax refunds, wages and Social Security checks if they fall behind on their student loans.
During the extended payment pause, however, the Education Department is also ceasing all collection activity, it said.
Higher education expert Mark Kantrowitz had previously recommended that, despite the chance of picking up a lower interest rate, federal student loan borrowers should refrain from refinancing their debt with a private lender while the Biden administration deliberated on how to move forward with forgiveness. Refinanced student loans wouldn’t qualify for the federal relief.
Now that borrowers know how much in loan cancellation is coming — assuming the president’s policy survives in the courts — borrowers may want to consider the option now, Kantrowitz said. With the Federal Reserve expected to continue raising interest rates, he added, you’re more likely to pick up a lower rate with a lender now than later.
Still, Kantrowitz added, it’s probably a small pool of borrowers for whom refinancing is wise.
It would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests.
Miguel Cardona
Secretary of the U.S. Department of Education
He said those include borrowers who don’t qualify for Biden’s forgiveness — the plan excludes anyone who earns more than $125,000 as an individual or $250,000 as a family — and those who owe more on their student loans than the Biden administration plans to cancel. Those borrowers may want to look at refinancing the portion of their debt over the relief amounts, Kantrowitz said.
Betsy Mayotte, president of The Institute of Student Loan Advisors, warned borrowers to first understand the federal protections they’re giving up before they refinance.
For example, the Education Department allows you to postpone your bills without interest accruing if you can prove economic hardship. The government also offers loan forgiveness programs for teachers and public servants.
“Refinancing can generate a lower interest rate than federal student loan rates,” Mayotte said. “But your rate doesn’t matter if you lose your job, have sudden medical expenses, can’t afford your payments and find that defaulting is your only option.”
With headlines warning of a possible recession and layoffs picking up, experts recommend that you try to salt away the money you’d usually put toward your student debt each month.
Certain banks and online savings accounts have been upping their interest rates, and it’s worth looking around for the best deal available. You’ll just want to make sure any account you put your savings in is FDIC-insured, meaning up to $250,000 of your deposit is protected from loss.
And while interest rates on federal student loans are at zero, it’s also a good time to make progress paying down more expensive debt, experts say. The average interest rate on credit cards is currently more than 19%.
If you have a healthy rainy-day fund and no credit card debt, it may make sense to continue paying down your student loans even during the break.
With interest temporarily suspended, any payments will go directly toward your debt’s principal, potentially shortening your repayment timeline, said Anna Helhoski, a student loan expert at NerdWallet.com.
“You could continue making payments each month by contacting your servicer, or save the money and make a lump sum payment on your highest-interest loan before interest accrues again when repayment restarts,” Helhoski said.
That’s because months during the government’s payment pause still count as qualifying payments for those programs, and since they both result in forgiveness after a certain amount of time, any cash you throw at your loans during this period just reduces the amount you’ll eventually get excused.
One more possibility: If you find yourself in a financially comfortable position and it doesn’t make sense for you to continue paying down your student loans, you may want to donate the extra cash.
HONG KONG — A 90-year-old Catholic cardinal and five others in Hong Kong were fined after being found guilty Friday of failing to register a now-defunct fund that aimed to help people arrested in the widespread protests three years ago.
Cardinal Joseph Zen, a retired bishop and a vocal democracy advocate of the city, arrived at court in a black outfit and used a walking stick. He was first arrested in May on suspicion of colluding with foreign forces under a Beijing-imposed National Security Law. His arrest sent shockwaves through the Catholic community, although the Vatican only stated it was monitoring the development of the situation closely.
While Zen and other activists at the trial have not yet been charged with national security-related charges, they were charged with failing to properly register the 612 Humanitarian Relief Fund, which helped pay medical and legal fees for arrested protesters beginning in 2019. It ceased operations in October 2021.
Zen, alongside singer Denise Ho, scholar Hui Po Keung, former pro-democracy lawmakers Margaret Ng and Cyd Ho, were trustees of the fund. They were each fined 4,000 Hong Kong dollars ($512). A sixth defendant, Sze Ching-wee, was the fund’s secretary and was fined HK$2500 ($320).
The Societies Ordinance requires local organizations to register or apply for an exemption within a month of their establishment. Those who failed to do so face a fine of up to HK$10,000 ($1,273), with no jail time, upon first conviction.
Handing down the verdict, Principal Magistrate Ada Yim ruled that the fund is considered an organization that is obliged to register as it was not purely for charity purposes.
The National Security Law has crippled Hong Kong’s pro-democracy movement since its enactment in 2020, with many activists being arrested or jailed in the semi-autonomous Chinese city. Hong Kong, a former British colony, returned to China’s rule in 1997.
The impact of the law has also damaged faith in the future of the international financial hub, with a growing number of young professionals responding to the shrinking freedoms by emigrating overseas.
MEXICO CITY — Mexico’s Supreme Court struck down part of President Andrés Manuel López Obrador’s ‘jail, no bail’ policy Thursday.
The court voted against mandatory pre-trial detention for people accused of fraud, smuggling or tax evasion. Because trials often take years in Mexico, the justices argued that being held in prison during trial was equivalent to being subjected to punishment before being convicted.
Instead, prosecutors would have to convince judges there are valid reasons not to release people on their own recognizance — for example, by arguing that they may pose a flight risk. The justices may vote next week on whether the possibility of pre-trial release may be justified for other crimes.
In 2019, López Obrador imposed mandatory pre-trial detention for a long list of crimes, and he views it as part of his crack-down on white collar criminals, like those accused of tax fraud. Mexico does not have cash bail, but before López Obrador changed the rules, judges could release suspects and require them to wear monitors, sign in at court or agree not to travel.
The president has long railed about corrupt judges and court rulings he doesn’t like, and Thursday’s supreme court vote was likely to spark more vocal attacks by the president.
Even before the ruling, López Obrador criticized the court for the widely expected Thursday vote.
“How can judges, magistrates and justices be defending white collar criminals? How can it be that money triumphs over justice?” López Obrador said before the ruling. “What tremendous shamelessness!”
The president has not been shy about accusing lower court judges of releasing drug and other suspects on procedural or technical points he clearly does not agree with. Underpaid, and often under threat, Mexican prosecutors often don’t bring strong cases, or make intentional or unintentional errors.
“They free them because the prosecution case was poorly written, or for any other excuse, any other pretext,” the president said, “because they have become very, very, very fixated on the fine points of the law.”
López Obrador has fought the courts, often attacking their legitimacy and singling out individual judges for scorn, because courts have often blocked some of the president’s key initiatives.
Observers say the courts have acted because López Obrador has often shoved through laws that openly contradict the country’s Constitution or international treaties.
Previously, the president has focused most of his wrath on lower courts. On Thursday at a press briefing with López Obrador, Ricardo Mejia, Mexico’s assistant secretary of public safety, said the administration would recommend bringing criminal charges against a judge who ordered the release of a suspected drug gang leader.
But much of the president’s anger Thursday was directed at the Supreme Court, which is about to hear an appeal by a group that says government money and property should no longer be used to erect Christmas-season Nativity scenes, a staple in Mexico.
The appeal says that the government’s participation in displaying Nativity scenes violates the constitutional separation of church and state.
The president angrily rejected that, even though the court has not ruled on the issue yet.
“That’s an example. Why should they go against the traditions, the customs of the people?” López Obrador said.
López Obrador expanded the list of charges that require a suspect to be detained pending trial to 16, including some nonviolent crimes that may carry sentences of just a few months — far less than the amount of time most people spend awaiting trial.
Only about two of every 10 people accused of a crime in Mexico are ever found guilty. That means that of the estimated 92,000 suspects held pending trial — often in the same cells with hardened criminals — around 75,000 won’t be convicted despite sometimes spending years locked up in Mexico’s crowded, dangerous prisons.
Trials in Mexico can drag on for a surprisingly long time. Two men were recently released with ankle monitors after spending 17 years in prison while on trial for murder.
Being put into Mexican prisons, which are overcrowded, underfunded and controlled by gangs, can be hell for those on pretrial detention, who often enter with no prison smarts or gang connections.
The U.N. Working Group on Arbitrary Detention says that “mandatory pretrial detention violates international standards on human rights.”
RIO DE JANEIRO — The head of Brazil’s electoral authority on Wednesday rejected the request from President Jair Bolsonaro and his political party to annul ballots cast on most electronic voting machines, which would have overturned the Oct. 30 election.
Alexandre de Moraes had issued a prior ruling that implicitly raised the possibility that Bolsonaro’s Liberal Party could suffer from such a challenge. He conditioned analysis of the request on the presentation of an amended report to include results from the first electoral round, on Oct. 2, in which the party won more seats in both congressional houses than any other, and he established a 24-hour deadline.
Earlier Wednesday, party president Valdemar Costa and lawyer Marcelo de Bessa held a press conference and said there would be no amended report.
“The complete bad faith of the plaintiff’s bizarre and illicit request … was proven, both by the refusal to add to the initial petition and the total absence of any evidence of irregularities and the existence of a totally fraudulent narrative of the facts,” de Moraes wrote in his decision hours later.
He also ordered the suspension of government funds for the Liberal Party’s coalition until a fine of 23 million reais ($4.3 million) for bad faith litigation is paid.
On Tuesday, de Bessa filed a 33-page request on behalf of Bolsonaro and Costa citing a software bug in the majority of Brazil’s machines — they lack individual identification numbers in their internal logs — to argue all votes they recorded should be nullified. De Bessa said that doing so would leave Bolsonaro with 51% of the remaining valid votes.
Neither Costa nor de Bessa have explained how the bug might have affected election results. Independent experts consulted by The Associated Press said that, while newly discovered, it doesn’t affect reliability and each voting machine is still readily identifiable through other means. In his ruling on Thursday, de Moraes noted the same.
He also wrote that the challenge to the vote appeared aimed at incentivizing anti-democratic protest movements and creating tumult, and ordered the investigation of Costa and the consultant hired to conduct an evaluation.
“De Moraes’ message to the political establishment is: the game is over. Questioning the result of the elections is not fair play, and people and institutions who do that will be punished harshly,” said Maurício Santoro, a political science professor at the State University of Rio de Janeiro.
In the press conference on Wednesday, Costa said his intention is merely to prevent the results of the 2022 vote from haunting Brazil into the future.
The electoral authority on Oct. 30 ratified the victory of Bolsonaro’s nemesis, leftist former President Luiz Inácio Lula da Silva, and even many of the president’s allies quickly accepted the results. Protesters in cities across the country have steadfastly refused to do the same, particularly with Bolsonaro declining to concede.
Bolsonaro spent more than a year claiming Brazil’s electronic voting system is prone to fraud, without ever presenting evidence.
The South American nation began using an electronic voting system in 1996 and election security experts consider such systems less secure than hand-marked paper ballots, because they leave no auditable paper trail. But Brazil’s system has been closely scrutinized by domestic and international experts who have never found evidence of it being exploited to commit fraud.
CHICAGO — A Chicago police officer was found not guilty Tuesday in the February 2020 shooting and wounding of an unarmed man during a struggle at a downtown commuter train station.
Cook County Judge Joseph Claps acquitted Melvina Bogard, 33, of aggravated battery and misconduct charges.
Prosecutors have said Bogard and another officer, Bernard Butler, were riding a train when they saw Ariel Roman move between cars while the train was in motion, in violation of a city ordinance. The officers asked Roman to get off the train, and on the platform he told them he had anxiety issues and moved from car to car because someone was bothering him.
Roman then turned his back on the officers and opened his backpack, prompting Butler to grab him. A struggle ensued between the officers and Roman.
Bogard shot Roman once in the chest or abdomen during that struggle, then shot him from behind in the buttocks or hip when Roman ran up the escalator, according to prosecutors.
Cellphone video shot by a bystander that was made public almost immediately received national attention, as did footage from police body cameras and Chicago Transit Authority surveillance cameras released two months later.
Roman survived the shooting and has filed a federal lawsuit that alleged Bogard and Butler “chased, tackled, pepper-sprayed, Tasered and shot twice.”
Police Superintendent David Brown later recommended to the city’s police board that Bogard, who joined the police department in 2017, be fired.
In his ruling, Claps said Roman posed a danger to the officers at the scene when he grabbed at a Taser.
Bogard’s defense attorney Tim Grace told reporters after Tuesday’s acquittal that it was “not a day to celebrate.”
“Officer Bogard was left in a position where she had to make a decision,” Grace said. “She could have ran away … but that’s not her job. That’s not what we pay her to do. We pay her to keep the trains safe.”
SEATTLE — The Washington Supreme Court has declined to reconsider an opinion that upheld a Black man’s virtual life sentence for shootings he committed at age 17, despite criticism that the ruling betrayed racial bias.
The court upheld the 61-year sentence for Tonelli Anderson in September, abandoning a precedent issued just a year earlier in which it said — in the case of a white defendant — that such long terms for juvenile killers were unconstitutional because it left them no chance of a meaningful life outside prison.
Anderson’s attorney, Travis Stearns of the Washington Appellate Project, sought reconsideration of the 5-4 ruling, writing that it reflected racial bias. Three civil rights organizations — the Fred T. Korematsu Center for Law and Equality at Seattle University School of Law; the Juvenile Law Center, based in Philadelphia; and Huy, which supports Indigenous inmates in the Pacific Northwest — also urged the court to reconsider.
But such motions are legal long shots, and the court denied it Monday without explanation. The King County prosecutors had also opposed it, saying Anderson’s criminal history and belated acceptance of responsibility helped distinguish his case.
Anderson, now 45, shot two women, killing one and blinding the other, during a drug robbery in Tukwila in 1994. An accomplice also shot and killed a man at the same home.
Anderson was not immediately arrested and went on to commit other crimes as a young adult, including assault and robbery, and he wrote letters to girlfriends bragging about the shootings. It wasn’t until 1998, after investigators learned of the letters, that he was charged.
He was convicted of first-degree murder in 2000 and sentenced to 61 years. He was granted a new sentencing hearing in 2018, following federal and state rulings that children must be treated differently by the justice system. But the judge gave him the same term, finding Anderson had not shown the shootings reflected “transient immaturity.”
In recent years, the Washington Supreme Court has further restricted sentences that can be imposed on children.
In 2018, the justices held that it violated the state Constitution to sentence 16- or 17-year-olds to life in prison without parole. That ruling came in the case of Brian Bassett, a white man who killed his parents and brother when he was 16. Bassett has since been resentenced to 28 years.
In September, the court struck down a 46-year sentence for Timothy Haag, a white man who was 17 when he drowned his 7-year-old neighbor. In that case, a six-justice majority held that juvenile murder defendants must be given “a meaningful opportunity to rejoin society after leaving prison.”
Bassett and Haag were both quickly caught and prosecuted.
In Anderson’s appeal, Justice Debra Stephens wrote for the 5-4 majority that such virtual life sentences for juveniles are barred by the state Constitution only if their crimes “reflect youthful immaturity, impetuosity, or failure to appreciate risks and consequences.”
Anderson’s was not such a case, Stephens said.
The dissenting justices said it was nonsensical that the court would find a 46-year sentence for a white 17-year-old to be an unconstitutional “de facto” life sentence, while upholding a 61-year sentence for a Black 17-year-old. Justice Mary Yu wrote it would be “willfully oblivious” to conclude race played no role.
The King County Prosecutor’s Office said the high court’s decision maintained the discretion of trial judges to weigh the facts of each case and apply an appropriate sentence.
A jury has returned a $27 million verdict against a central Iowa medical clinic after a man with bacterial meningitis was misdiagnosed with the flu, suffered strokes and said he has been permanently injured
DES MOINES, Iowa — An Iowa jury has returned a $27 million verdict against a Des Moines medical clinic after a man with bacterial meningitis was misdiagnosed with the flu, suffered strokes and said he has been permanently injured.
The Polk County jury returned the verdict Monday in the lawsuit filed in 2017 against UnityPoint Clinic Family Medicine in Des Moines.
Joseph Dudley and his wife Sarah Dudley filed the lawsuit after Joseph became ill in February 2017 and went to the clinic in southeast Des Moines. They reported he had dizziness, delusions, a headache, high fever and a cough.
A physician’s assistant in charge of the clinic at the time diagnosed him with the flu although tests returned negative, said Dudley’s lawyer Nick Rowley. Dudley was given Tamiflu and a pain reliever and sent home.
Two days later he went to the emergency room at UnityPoint Iowa Methodist Medical Center, where a doctor diagnosed the bacterial meningitis resulting from a heart valve infection. Dudley was put into a medically induced coma and was in intensive care for eight days during which he had a series of strokes causing the loss of hearing in his right ear, vertigo and dizziness, numb feet and legs, and much slower thinking and reaction time, Rowley said.
“Mr. Dudley will suffer from a lifetime of permanent brain damage because they failed to perform a simple blood test, a complete blood count,” said Rowley, founder of Trial Lawyers for Justice.
West Des Moines, Iowa-based UnityPoint Health has 400 clinics, 20 regional hospitals and 19 community network hospitals in Iowa, Illinois and Wisconsin.
UnityPoint Health spokesman Mark Tauscheck said the company believes it met well-established standards of care.
“We respect the jury process but strongly disagree with this verdict and are exploring all options including an appeal,” he said.
