Elizabeth Holmes sentenced to more than 11 years in prison for Theranos fraud


A federal judge on Friday sentenced disgraced Theranos CEO Elizabeth Holmes to more than 11 years in prison for misleading investors in the failed startup that promised to revolutionize blood testing but made it a symbol of the Silicon Valley’s bold self-promotion culture.

The sentence imposed by U.S. District Judge Edward Davila was shorter than the 15-year sentence sought by federal prosecutors, but far harsher than the leniency his legal team sought for the mother of a one-year-old son with another child on the way.

Holmes, who has served as CEO throughout the company’s turbulent 15-year history, was convicted in January in connection with the scheme, which revolved around the company’s claims that it had developed a capable medical device. to detect a multitude of diseases and ailments from a few drops of blood. But the technology never worked.

The sentencing in the same San Jose, Calif., courtroom where Holmes was found guilty of four counts of investor fraud and conspiracy in January marks another climactic moment in a saga that has been dissected in an HBO documentary and an award-winning Hulu series about his meteoric rise and mortifying fall.

Holmes, 38, faced a maximum of 20 years, but his legal team asked the judge for a maximum sentence of 18 months, preferably served at home.

Her lawyers argued that Holmes deserved more lenient treatment as a well-meaning entrepreneur who is now a devoted mother with another child on the way. Their arguments were supported by more than 130 letters submitted by family, friends and former colleagues praising Holmes.

Prosecutors also wanted Holmes to pay $804 million in restitution. The amount covers the bulk of the nearly $1 billion Holmes has raised from a list of sophisticated investors, including software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart.

READ MORE: What Elizabeth Holmes’ conviction means for tech entrepreneurs and startups

While wooing investors, Holmes leveraged a high-powered Theranos board that included former Defense Secretary James Mattis, who testified against her at her trial, and two former secretaries of state. , Henry Kissinger and the late George Shultz, whose son submitted a statement castigating Holmes. for concocting a scheme that played Shultz “for the fool”.

Holmes is due in jail on April 27. After giving birth to a son shortly before her trial began last year, she became pregnant at some point while out on bail this year.

Although her lawyers did not mention the pregnancy in an 82-page memo submitted to the judge last week, the pregnancy was confirmed in a letter from her current partner, William “Billy” Evans, who urged the judge to be merciful. .

If Holmes’ pregnancy had a role in determining her sentence, the decision could be controversial. A 2019 study found that more than 1,000 pregnant women entered federal or state prisons during a 12-month study period; 753 of them gave birth in detention.

According to a 2016 survey by the Bureau of Justice Statistics, more than half of women entering federal prison — 58% — said they were mothers of minor children.

Federal prosecutor Robert Leach said Holmes deserved a stiff sentence for masterminding a scam he described as one of the most egregious white-collar crimes ever committed in Silicon Valley. In a scathing 46-page memo, Leach told the judge he had an opportunity to send a message that curbs the hubris and hyperbole unleashed by the tech boom.

Holmes “fed on her investors’ hopes that a young, dynamic entrepreneur had changed health care,” Leach wrote. “And through her deception, she achieved spectacular fame, adoration, and billions of dollars in wealth.”

Even though Holmes was acquitted by a jury on four counts of fraud and conspiracy related to patients who had Theranos blood tests, Leach also asked Davila to consider the health threats posed by the conduct of Holmes.

Holmes’ attorney Kevin Downey portrayed her as a selfless visionary who spent 14 years of her life trying to revolutionize healthcare.

Although evidence submitted at his trial showed that the blood tests produced extremely unreliable results that could have pointed patients toward mistreatment, his lawyers claimed that Holmes never stopped trying to perfect the technology. until Theranos collapsed in 2018.

They also pointed out that Holmes had never sold any of his Theranos shares — a stake valued at $4.5 billion in 2014, when Holmes was hailed as the next Steve Jobs on the covers of business magazines.

Defending herself against criminal charges has left Holmes with “a substantial debt from which she is unlikely to recover,” Downey wrote, suggesting she is unlikely to pay any restitution Davila might order as part of his pain.

“Holmes is no danger to society,” Downey wrote.

Downey also asked Davila to look into the alleged sexual and emotional abuse suffered by Holmes while involved in a romantic relationship with Ramesh “Sunny” Balwani, who became a Theranos investor, senior executive and ultimately accomplice. of his crimes.

Balwani, 57, is due to be sentenced on December 7 after being found guilty at a trial in July of 12 counts of fraud and conspiracy.


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