June 25, 2024

Elizabeth Holmes case: Tech fraudster sentenced in federal court to 11 years in prison for fraud


Elizabeth Holmes, the ex-CEO of Theranos, has been sentenced to 11.25 years in federal prison. She was convicted of fraud and conspiracy after misleading investors about her blood-testing startup company.

The federal judge decided that the sentence is with three years of supervised release.

Holmes will self-surrender on April 27, which likely allows her to complete her pregnancy.

The sentence imposed by U.S. District Court Judge Edward Davila marks the end of a momentous fall from grace for the one-time darling of Silicon Valley, who was once deemed the youngest and richest self-made female billionaire in the world.

Prosecutors had asked for 15 years; her legal team had asked for 18 months of home confinement.

“There are so many things I would do differently if I had the chance,” Holmes said before hearing the judge’s sentence. “I tried to realize my dream too quickly.”

At times, she wept in court.

“I stand before you taking responsibility for Theranos,” she said through tears. “I loved Theranos. It was my life’s work.”

Holmes was convicted in January of three counts of fraud and one count of conspiracy for swindling investors out of $144 million.

Before being indicted, Holmes positioned herself as the next Steve Jobs, seeking to disrupt the biotech industry with her blood-testing company Theranos.

But while she received fame and adulation following her claims that her technology could perform hundreds of tests with a single drop of blood, the reality was much different.

Theranos was secretly using third-party analyzers to test patients’ blood after the company’s proprietary Edison machines never worked.

Nevertheless, Holmes courted deep-pocked investors, raising nearly a billion dollars with bogus claims and doctored documents. Holmes admitted at trial that she added pharmaceutical companies’ logos to reports claiming they had comprehensively validated her technology.

Holmes passed those documents to investors, telling them her analyzers were being used by the U.S. military, when they never were.

Davila, the judge, lamented that Holmes’ obvious talents were misspent.

“Was there a loss of a moral compass here?” Davila asked in court, pondering Holmes’ motivation. “The tragedy of this case is Ms. Holmes is brilliant.”

Holmes and her partner Sunny Balwani partnered with Safeway before Theranos cut a deal with Walgreens and began testing patients’ blood at locations in Arizona and California before their secrets were exposed by the Wall Street Journal in 2015.

Balwani was separately convicted of 12 counts of fraud earlier this year. He’s set to be sentenced in December.

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