Elizabeth Holmes, the founder and former CEO of the doomed medical startup firm Theranos, has been sentenced to 11.25 years in prison for her role in defrauding investors and consumers about the potential of her company’s blood-testing device.
U.S. District Court Judge Edward Davila announced the sentencing Friday. Davila presided over the Holmes trial in federal court in San Jose last fall and winter, which concluded Jan. 3 with the jury convicting Holmes on four counts of fraud. Holmes, who is currently pregnant with her second child, had been facing as much as 20 years in prison for wire fraud related to her prodigious fundraising efforts on behalf of Theranos. Judge Davila said that while the loss from investors totals over $300 million, the court will determine how much Holmes owes at a later date.
In the trial, Holmes delivered a tearful testimony in which she said, “I stand before you taking responsibility for Theranos. It was my life’s work. I am devastated by my failings. I have felt deep pain for what people went through, because I failed them. To investors, patients, I am sorry. I regret my failings with every cell of my body,” per NBC reporter Scott Budman.
Before announcing the sentencing, Judge Davila said, “This case is troubling on so many levels. What went wrong? This is sad because Ms. Holmes is brilliant. Failure is normal. But failure by fraud is not OK.” The judge added, “We know by the texts with Mr. [Sunny] Balwani that there was conspiracy.” Balwani was Holmes’ former boyfriend and president and chief operating officer of Theranos.
Holmes, 38, has emerged as the face of fraud and hype in Silicon Valley in the five years since Theranos imploded in scandal. The story of the wildly ambitiuos Stanford University dropout was dramatized this year in the Hulu limited series “The Dropout,” starring Amanda Seyfried and Naveen Andrews. Seyfried won an Emmy in September for her work as Holmes. Andrews played Holmes’ former business partner, Ramesh “Sunny” Balwami, who was convicted in a separate trial earlier this year on 12 fraud charges and is now awaiting sentencing.
Just last week, Holmes’ camp asked the judge for a new trial, citing an alleged incident over the summer that called into question the testimony of a key witness, but the bid was rejected by Judge Davila.
Holmes’ legal troubles have played out on a national stage in part because she was so heavily hyped in the 2012-2015 era as a visionary founder and the first self-made female tech billionaire. Holmes asserted that Theranos was developing revolutionary technology that would make blood testing cheaper, easier and less painful. She was hailed as a wunderkind CEO and was able to raise nearly $1 billion in private investment in Theranos even without being able to prove that the technology worked.
The end for Theranos began in October 2015 when Wall Street Journal investigative reporter John Carryrou published the first in a series of reports that cast serious doubt on the company’s claims and Holmes’ level of culpability. That led to a cascade of Securities and Exchange Commission investigations, and ultimately federal fraud charges were brought against Holmes and Balwani in June 2018.
Through her trial, Holmes asserted that she believed the company was on the right track and disputed that outright fraud had taken place, claiming Theranos had good intentions.
In addition to “The Dropout,” Holmes’ rise and fall has sparked books and podcasts, notably Carryrou’s “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” which he also turned into a podcast. ABC News business reporter Rebecca Jarvis also covered Holmes in “The Dropout” podcast, which formed the basis for Hulu limited series penned by Elizabeth Meriwether. In 2019, Alex Gibney produced a Holmes documentary for HBO, “Inventor: Out for Blood in Silicon Valley.”
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