Elizabeth Holmes was sentenced on Friday to 11 years and three months—or 135 months—in prison after she was found to have engaged in a multimillion-dollar scheme to defraud investors in her failed company, Theranos, which offered blood testing lab services.
The sentencing by U.S. District Judge Edward Davila in San Jose, California, came after Holmes was in January convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud to defraud investors. The jury verdict was reached after a trial that spanned three months.
The case revolved around claims by Theranos to have technology that could detect multiple diseases and conditions from a few drops of blood, but the technology did not work. The company also suggested that patients could receive diagnoses via small machines instead of traditional labs, and these machines could potentially be used in various settings, including in homes, pharmacies, and even on the battlefield.
During the trial, prosecutors said that Holmes, formerly the company’s CEO, misrepresented the company’s technology and finances. Theranos had relied on conventional machines from other companies to run patients’ tests, prosecutors alleged.
Evidence submitted during the trial showed the blood tests yielded unreliable results, which could have led patients to inappropriate treatments. But Holmes’s legal team asserted the company never stopped trying to improve the technology until it collapsed in 2018.
‘Troubling on so Many Levels’
Davila on Friday called the case “troubling on so many levels.” He added, “What was it that caused Ms. Holmes to make the decisions she did? Was there a loss of a moral compass?”“This is a fraud case where an exciting venture went forward with great expectations only to be dashed by untruths, misrepresentations, plain hubris, and lies,” he said.
The 11 years and three months sentencing was shorter than the 15 years that federal prosecutors sought. Prosecutors also sought $804 million in restitution, which almost matches the nearly $1 billion that Holmes had raised from investors.
She had faced a maximum of 20 years in prison. The federal probation office had recommended a nine-year prison sentence, per court papers.
Her legal team had sought a sentence of no more than 18 months, preferably served in home confinement. The team argued that leniency was justified because, unlike someone who committed a “great crime,” Holmes was a well-meaning entrepreneur not motivated by greed.
‘I Have Felt Deep Shame’
During the hearing Friday, the 38-year-old Holmes cried, saying she was “devastated” by her failures and would have done many things differently if she had the chance.“I have felt deep shame for what people went through because I failed them,” she said.
“I regret my failings with every cell of my body.”
Investors in the company included software magnate Larry Ellison, media mogul Rupert Murdoch, and the Walton family behind Walmart.
The judge set Holmes’s surrender date for April 27, which means she must report to prison by then.
Holmes’s lawyers are expected to file an appeal challenging her sentence and rulings upholding her convictions at the 9th U.S. Circuit Court of Appeals. They are also expected to ask Davila to release Holmes on bail during her appeal.
Theranos was once valued at $9 billion. A series of articles published in the Wall Street Journal in 2015, which questioned the technology, played a key role in the company’s collapse in 2018.
