Elizabeth Holmes She was sentenced to just over 11 years in prison for defrauding investors by falsely claiming that her technology could detect diseases from a drop of blood.
The sentencing of the former Theranos CEO marks the end of the young founder’s Silicon Valley saga — one that lured investors in with empty, utopian promises and netted hundreds of millions of dollars. Experts say it is an issue that could have an impact on how investors evaluate new startups. Many of the founders have used exaggeration to describe their visions and raise funds, but criminal charges of fraud are rare.
“I pushed the envelope a little too far,” says Anat Alon Bek, a professor of law at Case Western Reserve University. “You fake it” until you make it, but it was just too much “fake”. “
But the case is not completely over. Holmes’ former friend and business partner Ramesh “Sunny” Balwani was sentenced to jail on 7 December. He was convicted of 12 felony counts of fraud and conspiracy against Theranos investors and patients. Holmes also accused him of mistreating her, but Balwani denied the allegations.
Holmes sought funding for Theranos, which dropped out of Stanford University to launch, by claiming its technology would revolutionize the world of medicine, since it could use a few drops of blood to look for hundreds of diseases. She turned the startup into a $9 billion unicorn. But the whistleblower revealed that Holmes had lied about her invention’s capabilities. Instead of saving lives, he was putting patients at serious risk of false results.
Holmes faced up to 20 years in prison for her actions. In a memorandum that portrayed Holmes as a compassionate child who grew into a naive young business leader, her attorneys required that she serve 18 months under house arrest followed by supervised release and community service. Prosecutors sought a sentence of 15 years in prison and $8 million in damages.
“I stand before you to take responsibility for Theranos. I loved Theranos. It’s been my life’s work,” Holmes He said Before being sentenced to 135 months or 11.25 years in prison. “I regret my failures with every cell in my body.”
In October, Holmes again tried to avoid imprisonment by seeking a new trial. (After her conviction earlier this year, she made several such suggestions.) The latest suggestion came after former Theranos lab director Adam Rosendorf, the witness who testified against Holmes, came to her home to try to apologize for the role he played in her conviction. . This prompted Holmes to argue against using his testimony against her, but the judge denied the motion in early November.
In June 2018, Holmes was charged with 11 counts of fraud and convicted of four: one for conspiracy and three for fraud. The jury did not convict her of charges of defrauding patients by giving them false blood tests, which gave them false positives for HIV, miscarriage and cancer. Theranos struck a deal with Walgreens, which included plans to place Theranos blood testing centers in thousands of its stores across the United States. But Walgreens hasn’t done a full, independent validation of the technology, instead betting on Theranos.