Technology

Elizabeth Holmes sentenced to more than 11 years for Theranos fraud

Deposed Theranos CEO Elizabeth Holmes was sentenced to 11 years and three months behind bars on Friday, capping a years-long saga that captivated the technology world and shutting a chapter on one of the crucial spectacular company flameouts in U.S. historical past.

Federal Judge Edward Davila imposed the sentence after an uncommon listening to that stretched over 4 hours during which prosecutors argued with Holmes’ attorneys about her motives, investor losses and her diploma of regret.

“Failure is normal. But failure by fraud is not OK,” Davila mentioned earlier than handing down the sentence, calling the case “troubling on so many levels.” He dominated that Holmes by no means accepted accountability for her actions.

“I am devastated”

Holmes, 38, tearfully addressed the courtroom earlier than Davila handed down his sentence. “I regret my failings with every cell of my body,” she mentioned.

“I am devastated by my failings,” she advised the courtroom. “I have felt deep pain for what people went through, because I failed them.”

Holmes’ jail time period is ready to start April 27. She can be required to serve three years of probation after her launch.

The sentence is probably going to ship a message to different high-flying technology startups concerning the dangers of deceiving clients and traders. It fell wanting the 15 years prosecutors requested for, however was far longer than Holmes’ authorized staff had sought for the mom of a one-year-old son who has one other baby on the best way. 

Davila additionally mentioned he’ll decide at a later date how a lot money Holmes should repay to defrauded traders, if any. Prosecutors had sought $804 million in compensation to traders who they mentioned lost “everything.”

Letters of help

Holmes’ protection staff submitted 140 letters testifying to her character, together with one from her accomplice, William Evans, and from New Jersey Senator Cory Booker.

Among these additionally giving statements was Alex Shultz, the son of Theranos board member and former U.S. Secretary of State George Shultz. Alex’s son, Tyler, labored for Theranos and finally turned a whistleblower when he found the company’s checks did not work. When Tyler Shultz raised considerations, he was allegedly threatened by the company.

“My son slept with a knife because he was afraid of being killed,” Shultz advised the courtroom as he glared at Holmes. He recounted attorneys for Theranos confronting Tyler of their house, saying, “My family home was desecrated by Elizabeth and the lawyers.”

In January, a jury convicted Holmes of 4 counts of fraud and conspiracy for her claims about Theranos, the blood-testing startup she launched in 2003. 

At its peak, Theranos was valued at $10 billion and boasted luminaries together with Larry Ellison and Rupert Murdoch as traders. However, a sequence of exposes by the Wall Street Journal, adopted by a number of investigations by federal and state officers, revealed that Holmes had vastly overstated her technology’s capabilities.

Balwani additionally faces sentencing

Federal prosecutor Robert Leach emphatically declared Holmes deserves a extreme punishment for engineering a scam that he described as one in every of probably the most egregious white-collar crimes ever dedicated in Silicon Valley.

In a scathing 46-page memo, Leach advised the choose he has a chance to ship a message that curbs the hubris and hyperbole unleashed by the tech increase of the previous decade.


Widow of Theranos’ former chief scientist speaks out following Elizabeth Holmes’ conviction

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Holmes “preyed on hopes of her investors that a young, dynamic entrepreneur had changed health care,” Leach wrote. “And through her deceit, she attained spectacular fame, adoration, and billions of dollars of wealth.”

Former Theranos Chief Operating Officer Ramesh “Sunny” Balwani was convicted of 12 counts of fraud and is ready to be sentenced Dec. 7.

The Associated Press contributed reporting.

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