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Elizabeth Holmes Sentenced To 11.25 Years In Prison For Theranos Fraud
Elizabeth Holmes, who was convicted of three counts of felony wire fraud and felony conspiracy to commit wire fraud, was sentenced to 11.25 in prison during a hearing in federal court on Friday.
A federal judge on Friday sentenced Elizabeth Holmes to 11.25 years for her role in the fraud at the medical testing company, Theranos. She will be asked to self-surrender at a later date.
Holmes was convicted in January of three counts of felony wire fraud and one count of felony conspiracy to commit wire fraud after 50 hours of juror deliberations and a nearly four-month trial. She was acquitted of four fraud counts and jurors deadlocked on three other charges.
At the sentencing hearing — which came less than two weeks after the judge ruled against overturning her conviction — Holmes offering an apology to her investors and the patients affected by the fraud at Theranos.
"I am devastated by my failings. Every day for the past years I have felt deep pain for what people went through because I failed them," she told the court through tears, according to NBC News reporter Scott Budman and Guardian US reporter Kari Paul. "To investors, patients, I am sorry."
Before imposting the sentence, U.S. District Court Judge Edward Davila spoke about his perception of the case.
"This is sad because Ms. Holmes is brilliant," he said, according to Budman. "Failure is normal. But failure by fraud is not OK."
"She was a young woman moving into an industry that, let’s face it, is dominated by male ego," he added, according to Paul. "She made it, and got into that world."
"What is the pathology of fraud?" he then asked. "Is it the inability to accept responsibility? Perhaps that the cautionary tale to come from this case.”
Davila then sentenced the heavily pregnant entrepreneur to 135 months in prison and three years of supervised release. She is to report in April, according to New York Times reporter Erin Griffin — which is likely well after her baby is due to be born.
Holmes had dropped out of Stanford University in 2003 to found the company that eventually became Theranos, which promised fast blood testing using drops instead of vials of blood and results from small, easy-to-use machines. By 2013, she had begun to line up partnerships with major pharmacies, health care providers and health insurance companies, and had garnered significant equity investment — $900 million — from a long list of investors, including Rupert Murdoch, former Wells Fargo CEO Dick Kovacevich, Oracle founder Larry Ellison and the Walton family (who are the heirs of the founder of Walmart). She was declared the world’s youngest self-made woman billionaire — worth an estimated $4.5 billion — by Forbes in 2015.
It all came crashing down soon after.
Theranos' device, it turned out, didn't work, and much of the senior staff — including Holmes, who was CEO, and Sunny Balwani, Theranos' president and Holmes' romantic partner at the time — knew and had covered it up by sending out blood samples for traditional testing to meet the terms of their contracts.
The Wall Street Journal's John Carreyrou outlined many of the claims in a 2015 article and his 2018 bestselling book “Bad Blood: Secrets And Lies In A Silicon Valley Startup," which led to Theranos' downfall.
In January 2016, a federal inspection conducted by the Centers for Medicare and Medicaid Services found significant problems at two Theranos facilities and, within two months, barred both Holmes and Balwani from involvement in any certified clinical laboratory and revoked the facilities' licensing.
More failures and sanctions followed, as well as layoffs, shutdowns and lawsuits. Holmes and Balwani were hit with charges from the Securities and Exchange Commission in March 2018 — she eventually settled — and with criminal charges in May 2018.
The company shut down for good in September 2018.
Holmes' trial began in August 2022, and she testified in her own defense for seven days. Among other revelations, she alleged she'd been a victim of intimate partner violence at the hands of Balwani — who was 20 years her senior — and that he dictated her speech, dress and actions throughout their time together. She suggested he was the real force behind Theranos and the fraud, and that she'd acted almost entirely at his direction and without questioning him.
Balwani, who denied Holmes' abuse accusations, was tried separated earlier this year and convicted on 12 fraud-related counts.
Holmes, who gave birth to her first child before her first trial, is pregnant with her second.