Ten months after being convicted of fraud, the youngest self-made billionaire, Elizabeth Holmes, was sentenced to 11.25 years in prison, plus three years of supervised release. At her trial, she was found guilty on four of the 11 counts of defrauding investors, but was not found guilty of defrauding patients.
Holmes, the founder and former CEO of Theranos, could have faced up to 20 years in prison for each of the four charges. By comparison, former pharmaceutical executive Martin Shkreli was sentenced to seven years in prison for securities fraud, but was released after just over four years.
In a courtroom in San Jose, both sides of United States v. Elizabeth Holmes presented their case as to whether Judge Edward Davila could hear Holmes’ case.Reckless ignoreSick of the verdict. Davila rejected that motion, because in the original trial, Holmes was only convicted of defrauding investors.
Regardless, it took more than four hours before Holmes’ verdict was decided. Alex Schultz, the father of whistleblower Tyler Schultz, spoke to the court, recounting how his son fell asleep with a knife under his pillow when he suspected he was being followed by Theranos private investigators.
Then Holmes spoke herself. “I regret my failures with every cell in my body,” she said He said. That was when Judge Davila issued his decision.
Holmes is expected to report to the prison at April. Currently, she is pregnant with her second child.
Fraud at Theranos
Holmes founded Theranos in 2003 after dropping out of Stanford University. She urged investors and partners on technology that would revolutionize the healthcare system—instead of drawing blood intravenously and waiting days for test results, her technology would draw out a little blood and immediately run dozens of tests on it. I quickly became the CEO of a $10 billion company, but it turns out that technology just didn’t work.
Theranos has been on hiatus since 2018, but Holmes’ criminal trial only began last fall after delays due to the pandemic and the birth of her first child. According to a letter from Holmes’ husband in a public court filing, she is now pregnant with a second child. The recording includes 282 pages of other letters from Holmes’ friends, family and business associates, ranging from childhood photos and drawings to notes from prominent supporters like Senator Cory Booker (D-NJ) and venture capitalist Tim Draper.
“Although there has been much public outcry against Theranos and Elizabeth, the attitude prevailing in much of the adventure world is quite different,” Draper writes. “Venture-backed startups often announce products and bring them to market before they are ready.”
The verdict on the former CEO was delayed further because her lawyers tried to order a new trial, arguing that new evidence came to light after former Theranos lab director Adam Rosendorf visited Holmes at home in an attempt to find a final solution.
Rosendorff, who worked at Theranos between 2013 and 2014, testified for six days last year during Holmes’ four-month trial. With his highly technical knowledge of the inner workings of Theranos Laboratories, Rosendorff’s testimony was central to the trial. In court, he said Holmes knew the Theranos technology produced inaccurate blood test results, but pushed for its use on patients anyway. After repeatedly raising his concerns about the faulty technology, he eventually quits Theranos.
Holmes’ attorneys alleged that when Rosendorff visited her home this summer, he expressed guilt for making Theranos look worse than it did in court. But Judge Edward Davila did not find merit in these allegations. Rosendorff confirmed again that last year’s testimony was accurate. The former laboratory director makes it clear that he feels sorry for Holmes’ child, who will grow up without a mother if he is sent to prison, but not for Holmes herself.
Holmes’ ex-boyfriend and Theranos COO, Ramesh “Sunny” Balwani is awaiting sentencing. He was convicted on 12 of the 12 counts at his own trial, where the jury found him guilty of defrauding both patients and investors.