Elizabeth Holmes: The Theranos founder has been sentenced to more than 11 years in prison for fraud

Elizabeth Holmes: The Theranos founder has been sentenced to more than 11 years in prison for fraud
Elizabeth Holmes: The Theranos founder has been sentenced to more than 11 years in prison for fraud

Elizabeth Holmes: The Theranos founder has been sentenced to more than 11 years in prison for fraud

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Holmes was seen in court with family members on Friday

Elizabeth Holmes, the founder of Theranos, has been sentenced to more than 11 years in prison for defrauding investors in her $9 billion blood testing start-up.

The former Silicon Valley star falsely claimed the technology could diagnose the disease with just a few drops of blood.

Holmes, 38, who is pregnant, tearfully told the court she felt “deep pain” for those misled by the scam.

Holmes was convicted last January after a three-month trial.

Holmes is expected to appeal Friday’s verdict in a California court.

The ruling is widely seen as a test of how seriously the justice system takes corporate fraud in the tech sector.

Once hailed as “the successor to Steve Jobs,” Holmes was the world’s youngest self-made billionaire.

Holmes brought Theranos to market after dropping out of Stanford University at the age of 19, and its value skyrocketed after the company claimed it could revolutionize disease diagnosis.

But the technology Holmes promoted didn’t work, and she’s mired in lawsuits, and the company was wound up by 2018.

Prosecutors said during Holmes’ trial in California that doctors and patients were knowingly misled about Theranos’ flagship product, the Edison device, which the company claimed could treat cancer, diabetes and other diseases with just a few drops detect blood.

Holmes has also been accused of giving his financiers a grossly exaggerated picture of the company’s performance.

Juries eventually found her guilty of four counts of fraud, with a maximum sentence of 20 years in prison. However, they found her not guilty on four other counts and did not reach a verdict on three other charges.

Before Judge Edward Davila delivered his verdict on Friday, Holmes read a letter in court in which she tearfully apologized to investors and patients.

“I was devastated by my failure,” she said. “I felt deep pain at what people went through because I let them down.”

The judge called Holmes a “brilliant” entrepreneur and told her: “Failure is normal. But failure through cheating is unacceptable.”

Holmes must now appear to serve her April 27 sentence.

Holmes and Ramesh “Sunny” Balwani, her former business partner and lover, were charged in 2018 with fraud and conspiracy to wire fraud. Balwani, who was tried separately, was convicted of fraud this summer. He will make a decision on his case next month.

Prosecutors are asking Holmes to be sentenced to 15 years in prison and to pay around $800 million in damages to investors, including several high-profile figures such as former US Secretary of Defense James Mattis, who testified against them in court, and software tycoon Larry Ellison.

But Holmes’ defense team, who claimed she had good intentions and was trying to help people, said she should serve 18 months of house arrest.

The judge found on Friday that investors, including Rupert Murdoch, the Walmart-owning family and the CEO of Wells Fargo, had already caused $121 million in losses. The amount she has to pay will be determined at a later court hearing.

More than 130 friends, family members and former Theranos employees have written to the judge to appeal their clemency request.

Among those calling for a light sentence was 2020 presidential candidate and New Jersey Democratic Party senator Cory Booker, who wrote that Holmes “made the world a better place for all her mistakes.”

The group notes that Holmes is a young mother. She gave birth to a child in July 2021 and is currently pregnant with her second child.

It is not known when she was born. It is expected that her lawyers will try to put her in jail until after the birth.

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Footage released in court shows Holmes has been at large since her conviction in June

If she has to give birth in prison, there are two residential programs offered by the Federal Prison Service, according to Mercury News.

However, none of them are located in California. The facilities allow mothers to live in prison with their children for up to 30 months.

Her partner, Billy Evans, told the judge in his sentencing note to the court that he feared “a future where my son and his mother will grow up on the other side of the glass, armed with guards.”

Prisoners’ families are thoroughly searched before limited visits to their children allow physical contact. Prisoners have to wait in long lines and pay exorbitant fees to contact family members by phone.

Eileen Libera, a Silicon Valley secretary who lost a large chunk of her savings investing in Theranos, told the BBC she was “happy” with the verdict.

“I think that’s fair given all the facts of the case … I knew it was fraud and I put people’s lives at risk,” she added.

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