On Friday, Elizabeth Holmes, the founder of the blood testing startup that never was, was sentenced to more than 11 years in federal prison by a judge in San Jose, California. Specifically 11.25 years, or 135 months, starting in April. She is required to self-surrender at an unidentified date.
“I stand before you taking responsibility for Theranos,” Holmes said just before receiving her sentence. “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,” she continued. “I regret my failings with every cell of my body.” She then quoted a Rumi poem: “Yesterday I tried to change the world. Today I’m wise, and want to change myself.” The 38-year-old had previously asked for no more than 18 months in jail, in addition to “home confinement and community service,” according to the Wall Street Journal.
In January, Holmes was found guilty on four charges of defrauding investors. She faced a maximum sentence of 20 years in prison and a fine of $250,000 in addition to restitution for each count. Judge Edward Davila reportedly said evidence showed that while Holmes was the leader of the company, she was not necessarily the leader of the criminal acts.
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The hearing had its share of terse exchanges, including the prosecution’s assertion that she’s repeatedly displayed “arrogance” throughout the proceedings and their claim that Holmes once told a Walgreens executive, “They don’t put attractive people like me in jail.” The prosecution and defense also spent significant time arguing whether her criminal wrongdoings were “a conscious disregard” or “recklessness.”
“The company was never going to succeed,” the prosecution stated. “Investors were trapped and unable to sell their shares. They invested hundreds of millions of dollars. The penalty should be everything they lost.” The estimated loss amount? $804 million. Naturally, Holmes’ attorneys disagreed. The cost quibbling continued until Judge Davila ultimately decided there were 10 investors who’d been victimized (including Rupert Murdoch and Betsy DeVos), with a total of $121 million in share value losses.
In an effort to encourage leniency on the part of Davila, Holmes’ team submitted 130 letters penned by an assortment of loved ones—and Sen. Cory Booker (D-N.J.). “I firmly believe in the possibility of rehabilitation and in the power of redemption for anyone. And I believe that Ms. Holmes has within her a sincere desire to help others, to be of meaningful service, and possesses the capacity to redeem herself,” the senator wrote.
Government prosecutors sought a 15-year prison term for Holmes, plus probation and restitution. Meanwhile, Holmes’ probation officer pushed for a nine-year sentence. Her defense team, inevitably, asked Judge Davila for the most meager punishment possible (18 months of incarceration followed by probation and community service), given that Holmes is currently pregnant with her second child since she was prosecuted in 2018.
The crooked experiment and glorified ego project that was Theranos raised $945 million, largely due to a list of dubious investors, ranging from Murdoch, a media executive and investor, to the billionaire family of former Secretary of Education, DeVos. Despite next to no evidence of success, Theranos was once valued at $9 billion.
It was just after a 2015 Wall Street Journal investigation found that the invention behind Theranos had only performed close to a dozen of the hundreds of tests it purported it could—with doubtable accuracy, no less—that the company soon dissolved and received an onslaught of fraud charges.
Throughout her trial, Holmes alleged that her then-boyfriend and Theranos COO, Ramesh “Sunny” Balwani, controlled every aspect of her personal and professional life. Balwani’s attorneys have denied such claims. Meanwhile, the former COO was found guilty on all 12 charges in a separate trial and could receive a similar maximum sentence when he’s due back in court on December 7.
“The effects of Holmes and Balwani’s fraudulent conduct were far-reaching and severe,” federal prosecutors wrote in a recent court filing. “Dozens of investors lost over $700 million and numerous patients received unreliable or wholly inaccurate medical information from Theranos’ flawed tests, placing those patients’ health at serious risk.”
Before Holmes was sentenced, the father of Theranos whistleblower and purported victim of Holmes, Alex Shultz, addressed her directly, saying: “I felt like my family home was desecrated,” and “My wife and I are, finally, happy that this is coming to an end.”