Convicted of Theranos Fraud, Elizabeth Holmes Received a Sentence of Almost 11 Years in Prison

Elizabeth Holmes Received a Sentence: Following her conviction in January for cheating investors while operating the failing blood-testing firm Theranos, Elizabeth Holmes was sentenced to more than 11 years in prison on Friday. The conviction stemmed from her actions when she was CEO of Theranos.

A Sentence Was Handed Down to Elizabeth Holmes

Elizabeth Holmes, the discredited founder of failed blood-testing start-up Theranos, has been sentenced to more than 11 years in jail for what prosecutors termed one of the “most substantial” white-collar crimes ever committed in the US. The 135-month sentence marks the climax of a drama that spurred a discussion about the US IT sector’s “fake it ’til you make it” culture and the investing community’s tendency to welcome charismatic business founders.

Holmes, 38, sobbed as she addressed the court Friday. “Theranos was great.” She called it her life’s work. “My failures destroy me.” Holmes embraced her husband Billy Evans after receiving her sentence. She escaped reporters by exiting a courtside entrance. Her sentence begins in April. US attorney Stephanie Hinds said her sentence reflects the boldness of her vast crime and the damage she created.

Holmes was found guilty in January on four charges of cheating investors, following a trial that lasted over four months. Theranos’ Edison machine couldn’t conduct the revolutionary blood tests Holmes promised. Prosecutors alleged she faked endorsements to secure investor and partner clearance, a deceit that led to Theranos raising $900mn at a $9bn private value.

Prosecutors compared Theranos to an “airplane with a damaged engine” and said investors deserved full recompense. “The writing was on the wall, it was going to fail,” prosecutor John Bostic said at Friday’s sentencing hearing. “Investors were imprisoned in that airplane. No escape. When the company folded, none of them got anything back.

Holmes could’ve gotten 20 years. The DOJ called her “blinded” by ambition and requested a 15-year jail term and millions in reparations to her misled investors. “Holmes’ crimes were not failing, they were lying,” prosecutors said. 10 deceived investors, including Rupert Murdoch, will be awarded full reparation. Judge Davila said $121m was lost, although this might alter.

Holmes’ counsel recommended 18 months of home arrest and community service. They called her a well-intentioned businesswoman with honorable objectives and a driven lady with unyielding confidence she could produce a game-changing gadget that could perform a variety of advanced diagnostic tests on one little droplet of blood.

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Elizabeth Holmes Received a Sentence
“We acknowledge that this may seem a tall order, given the public perception of this case — especially when Ms. Holmes is viewed as a caricature, not a person; when the company is viewed as a house of cards, not as an ambitious, inventive, and indisputably valuable enterprise; and when the media vitriol for Ms. Holmes is considered,” her lawyers wrote.

In Friday’s hearing, Holmes’ counsel emphasized she hadn’t tried to sell her firm shares, unlike other high-profile fraud convicts. Downey said these examples involve boats, flights, parties, and residences. How did she behave? She created tech.” Holmes’ Edison machine failed after landing large contracts with Walgreens and others. The business started employing off-the-shelf technologies from Siemens and occasionally got the wrong results.

It was not until Theranos employee-turned-whistleblower Tyler Shultz, the nephew of former US secretary of state and Theranos director George Shultz, tipped off The Wall Street Journal that the situation came to light. Bad Blood, John Carreyrou’s book about Holmes and Theranos, became a New York Times bestseller and spawned a variety of dramatic TV reinterpretations.

Shultz’s father Alex addressed the court on Friday, alleging Holmes had hired a private investigator to monitor Tyler, and that Tyler had slept with a knife under his pillow out of terror. “It was a hard process to go through,” Alex Shultz remarked. Elizabeth desecrated our house. Holmes’s defense claimed the public’s interest should not be used against her, adding that more than 130 individuals “who truly know Ms. Holmes” had written to the court in support.

Cory Booker bonded with Holmes over a supper of almonds. She “has a true desire to assist others and redeem herself,” he said. Ramesh “Sunny” Balwani, Holmes’s ex-boyfriend and Theranos COO, was convicted of fraud in a separate trial. Early December is his sentencing.

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