- Disgraced Theranos founder Elizabeth Holmes was sentenced to 11.25 years in prison with 3 years probation.
- Once dubbed the world’s youngest self-made billionaire woman, Holmes was found guilty of four counts of fraud and conspiracy in January following a four-month trial that has captivated Silicon Valley.
- She will begin serving her sentence on April 27.
More than four years after charges were brought against her for deceiving investors and patients in blood testing startup Theranos, Elizabeth Holmes has been convicted, according to multiple reports.
On Friday, federal judge Edward Davila handed down a prison sentence of 135 months, or 11.25 years, with 3 years of supervised release for the 38-year-old founder and former CEO of Theranos.
Holmes, who has a one-year-old child and is currently pregnant with her second child, will begin her sentence on April 27, 2023.
“I stand before you taking responsibility for Theranos. I loved Theranos, it was my life’s work,” Holmes said in tears during the hearing. “I’m so, so sorry. I gave everything I had to build and try to save our business.”
“I am devastated by my failures,” she said. continued. “Every day for the past few years I have felt deep pain for what people have gone through because I let them down.”
“Looking back, there are so many things I would do differently if I had the chance. I regret my failures with every cell in my body,” Holmes said. added.
During the hearing, the prosecution and defense went back and forth on various factors that could affect Holmes’ sentence, including the extent of the Theranos scheme and the amount of money investors lost. in the business.
Davila concluded that the loss to investors in stock value was $121 million, saying Theranos shares would have been that much cheaper had it not been for Holmes’ fraud. Restitution will be determined at a later date, he said.
The conviction is the latest development in a years-long scandal that has gripped Silicon Valley. At 19, Holmes dropped out of Stanford University to create Theranos, a blood-testing startup that supposedly could test for hundreds of diseases with a single drop of blood. During her meteoric rise to fame, she recruited former federal government officials, US senators, billionaire CEOs and even a former CDC chief as investors and board members.
Holmes graced countless magazine covers and award lists and was proclaimed a visionary, becoming the world’s youngest self-proclaimed female billionaire, with a net worth of around $4.5 billion. Theranos was hailed as having the power to revolutionize healthcare and had an estimated valuation of $9 billion at its peak.
Holmes’ empire began to crumble in 2015, when the Wall Street Journal published a damning expose revealing that Theranos machines could only perform a small fraction of advertised tests and still produced inaccurate results for them. , and the company was already secretly using competitors’ machines. on the market.
The Journal’s reporting sparked investigations into Theranos by numerous federal agencies, including the FDA and SEC. In 2018, the Justice Department announced that a federal grand jury had indicted Holmes on nine counts of wire fraud and two counts of conspiracy to commit wire fraud, and she resigned as CEO.
Holmes’ trial began last September. The defense argued that Holmes was in the dark about the company’s many problems and tried to pin the blame on other Theranos employees, particularly Ramesh “Sunny” Balwani, her ex-boyfriend and former arm. right of Theranos. During the trial, Holmes accused Balwani, who is 20 years her senior, of physical and emotional abuse, allegations her lawyers have denied.
Prosecutors have called to the stand former Theranos employees who said they raised testing issues to no avail, former investors and board members who recalled being won over by claims that they now knew to be false and from patients who testified to receiving inaccurate test results.
After four months, Holmes was finally found guilty on four of the 11 counts in January. All four counts related to investors’ losses in Theranos; the jury was deadlocked on three counts related to other investments, and Holmes was acquitted of all patient-related charges. For each count for which she was found guilty, she faces up to 20 years in prison, a fine of $250,000 and the obligation to compensate the victims.
Earlier this month, his lawyers sought a maximum sentence of 18 months, preferably house arrest, by submitting 130 letters from friends and family asking for clemency. Prosecutors, meanwhile, were asking for a 15-year prison sentence and $800 million in restitution.
The former Silicon Valley star’s downfall has proven to be an indictment of Silicon Valley’s pervasive “fake until you make it” culture and a cautionary tale for investors about the dangers insufficient due diligence. Theranos has raised approximately $945 million over its lifetime.
Balwani was found guilty in July of the 12 charges brought against him. He is due to be sentenced on December 7.