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Elizabeth Holmes sentenced to over 11 She was sentenced to years in prison on Friday after being convicted in January of defrauding investors while running failed blood-testing startup Theranos.
Judge Edward Davila imposed a sentence of 11 years and three months in prison, with a further three years of supervision following Holmes’ release. The sentence also includes a $400 fine, or $100 for each count of fraud. Restoration will be determined at a later date. Holmes was ordered to surrender on April 27, 2023. She is expected to appeal the conviction.
Holmes was found guilty in January of four counts of defrauding investors and faces up to 20 years in prison and a $250,000 fine plus restitution for each count.
Government attorneys are asking for a 15-year sentence, probation and restitution, while Holmes’ probation officer is asking for a nine-year sentence. Holmes’ defense team asked Davila, who presided over her case, to sentence her to up to 18 months in prison, followed by probation and community service.
A tearful Holmes spoke in court in San Jose, California, before sentencing. “I love Theranos. It’s my life’s work,” she said. “The people I tried to deal with Theranos were the people I loved and respected the most. I was devastated by my failure.”
She also apologized to Theranos employees, investors and patients. “I’m very, very sorry. I gave everything I had to build our company and save our company,” she said. “I regret the failure of every cell in my body.”
Unlike other defendants in the corporate fraud case, the Theranos founder did not cash in stock or spend money, Kevin Downey, one of Holmes’ attorneys, said as she argued her sentence before a judge on Friday. Money buys “yachts and planes” to express greed. ’” Instead, the money “was used to build medical technology.”
U.S. Attorney Geoffrey Schenk noted that Holmes did gain fame, admiration and a lifestyle from the fraud, even though she received no financial benefit. “These are still benefits she is receiving,” he said.
Friday’s sentencing hearing concludes Holmes’ trial Amazing downfall. Once hailed as a tech icon for her company’s promise to test a range of conditions using just a few drops of blood, she is now the rare tech founder to be convicted of a company misstep and face jail time.
Holmes, 38, started Theranos in 2003 at age 19 and dropped out of Stanford shortly thereafter to work on the company full-time. After a decade in obscurity, Holmes turned to the media, claiming that Theranos had invented a technique that could accurately and reliably detect a range of conditions simply by pricking a few drops of blood from his finger.
Theranos raised $945 million from an impressive array of investors, including media mogul Rupert Murdoch, Oracle founder Larry Ellison, Walmart’s Walton family and former education secretary Betsy DeVos’ billionaire family. At its peak, Theranos was valued at $9 billion, making Holmes a billionaire on paper. She was praised on magazine covers, often wearing a signature black turtleneck sweater reminiscent of the late Apple CEO Steve Jobs. (She didn’t wear that attire in court.)
The company began to unravel after a Wall Street Journal investigation in 2015 found that the company had performed only about a dozen tests with questionable accuracy out of hundreds of tests offered using its proprietary blood-testing equipment. Instead, Theranos relies on third-party manufacturing equipment from traditional blood-testing companies.
In 2016, Theranos voided two years of blood test results. In 2018, Holmes and Theranos settled charges of “massive fraud” with the SEC, but neither admitted nor denied any of the charges as part of the deal. Theranos soon disbanded.
At her trial, Holmes claimed she was in a decade-long abusive relationship with then-boyfriend and Theranos COO Ramesh “Sunny” Balwani while running the company. She claims Balwani tried to control nearly every aspect of her life, including restricting her diet, voice and image, and isolating her from others. (Balwani’s lawyers have denied her claims.)
In July, Balwani was found guilty of all 12 charges in a separate trial and faces the same sentence. Same potential maximum prison time as hers. Balwani is due to be sentenced on December 7.
“The implications of Holmes and Balwani’s fraudulent conduct were far-reaching and serious,” federal prosecutors wrote in November court documents on Holmes’ sentencing. “Dozens of investors lost more than $700 million, and many patients received unreliable or outright inaccurate medical information from Theranos’ flawed test, putting the health of these patients at serious risk.”
More than 100 people wrote in support of Holmes to Davila, pleading for a lighter sentence for her. The list includes Holmes’ partner Billy Evans, Holmes and many members of the Evans family, early Theranos investor Tim Draper, and Mori. Corey Booker. Booker described meeting her at a dinner party years before she was charged and bonding over the fact that they were both vegan with nothing but a bag of almonds they shared.
“I still believe in her hope that she can make a difference in the lives of others and that despite her mistakes she can make the world a better place,” Booker wrote, noting that he continues to see her as a friend .
Ahead of the hearing, there were also questions about how Holmes’ life development since her resignation from Theranos complicated her sentencing. Holmes and her partner Evans, who met in 2017, have a young son together. Holmes is also pregnant, as confirmed by recent court documents and her last court appearance in mid-October.
Mark MacDougall, a white-collar defense attorney and former U.S. attorney, told CNN Business ahead of the hearing, The fact that Holmes has a young child may have influenced how she is sentenced.
“I don’t know why not, because judges are human too,” he said.
MacDougall also said he couldn’t see the long-term incarceration having any effect. “Elizabeth Holmes will never run a major company again,” he said. “She can never let something like this happen again.”