Theranos founder Elizabeth Holmes was sentenced to 135 months in prison (11.25 years) on Friday.
Do the Crime, Do the Time
Elizabeth Holmes, a ‘special lady’ among corporate media and certain politicians, was convicted on four counts of criminal fraud.
Theranos was a privately held healthcare technology company founded by then 19-year-old Elizabeth Holmes in 2003.
After more than ten years of fundraising and reaching a peak valuation of roughly $10 billion, the tide started to turn in 2015 because of skepticism from the media. By June 2016, Elizabeth Holmes’ net worth reportedly dropped from $4.5 billion to nothing.
Holmes claimed her breakthrough technology provided quick and reliable blood tests and only required a small amount of blood.
Elizabeth Holmes is 38 years old and currently pregnant with her second child.
What Happened
Whistleblowers came forward and revealed the blood-testing technology didn’t actually exist. One former senior employee stated that only a small fraction of all the tests were conducted on the “Edison machines,” and the majority of tests were handled on competitors’ equipment despite Theranos’s claims to the contrary.
On March 14, 2018, the SEC charged Theranos, its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani with massive fraud.
On June 15, 2018, Holmes and Balwani were charged with wire fraud according to a release by the U.S. Attorney’s Office, North District of California. Holmes stepped down as the CEO of the company on the same day.
The technological breakthrough that CEO Elizabeth Holmes and former company president Ramesh Balwani touted was never demonstrated, and the assertions of Holmes and Balwani amounted to outright deceit.
The Sentencing
California Judge Davila ruled that Holmes would spend 135 months in federal prison. She will then serve 3 years of supervised release.
As reported by CNBC:
Theranos founder Elizabeth Holmes was sentenced Friday to more than 11 years in prison for fraud after deceiving investors about the purported efficacy of her company’s blood-testing technology.
Holmes was convicted in January in the U.S. District Court for the Northern District of California. She cried while speaking to the court ahead of her sentencing on Friday.
“I loved Theranos. It was my life’s work,” Holmes said. “My team meant the world to me. I am devastated by my failings. I’m so so sorry. I gave everything I had to build my company.”
Her defense team argued she should face a maximum sentence of 18 months, according to court filings. Instead, she was given 135 months, which amounts to 11 years and three months, behind bars.
Prosecutors sought a 15 year sentence for the pregnant 38-year-old former billionaire and Silicon Valley celebrity. In July, Balwani, who was romantically involved with Holmes years earlier, was found guilty of 12 criminal fraud charges. His sentencing is set for next month.
Holmes must surrender to prison on April 27, 2023.
Holmes, is the subject of an HBO documentary as well as a Hulu miniseries starring Amanda Seyfried.
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