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Prosecutors Argue For 15-Year Prison Sentence For Theranos Founder Elizabeth Holmes
“[Elizabeth Holmes] repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors,” prosecutors wrote in a lengthy sentencing memorandum asking for 15 years behind bars and $803M in restitution.
Prosecutors have asked a judge to sentence disgraced Theranos founder Elizabeth Holmes to 15 years behind bars, after describing the case as the “most substantial white collar offenses Silicon Valley or any other District has seen.”
Holmes, who was convicted in January of three counts of felony wire fraud and felony conspiracy to commit wire fraud, is expected to be sentenced in federal court on Friday. Prosecutors have argued for a lengthy sentence that would put the 38-year-old mom behind bars for 15 years for deceiving company investors about the capabilities of her blood-testing company once touted as a health care breakthrough.
“She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors,” prosecutors wrote in the lengthy 46-page sentencing memorandum. “Elizabeth Holmes’ crimes were not failing, they were lying—lying in the most serious context, where everyone needed her to tell the truth.”
They also requested that Holmes pay a whopping $803,840,309 in restitution to those she had defrauded for years, including pharmacy giant Walgreens and Safeway.
“Time and again, she chose deceit over candor. She forged her own endorsements. She preyed on hopes of her investors that a young, dynamic entrepreneur had changed healthcare,” Asst. U.S. Attorney Robert S. Leach wrote in the memo. “She leveraged the credibility of her illustrious board. And, through her deceit, she attained spectacular fame, adoration, and billions of dollars of wealth.”
Holmes—who was once ranked by Forbes as the youngest self-made billionaire—raised millions from investors who believed the Stanford drop-out had developed a way to perform countless blood tests with an amount of blood as small as a finger prick.
But the technology never materialized and Wall Street Journal reporter John Carreyrou exposed the scheme in a 2015 article referenced by prosecutors.
“When a journalist dared to ask questions about Theranos’ actual achievements, she tried to dupe him and then attacked him, along with his sources,” Leach wrote. “After her fraud was revealed, she lied, obfuscated, and concealed. At trial, she blamed her COO (and longtime boyfriend), her board, her scientists, her business partners, her investors, her marketing firm, her attorneys, the media—everyone, that is, but herself.”
According to prosecutors, Holmes was “blinded” by ambition and was willing to put patients “at risk” by going to market with an “unproven and unreliable medical device.”
“As her lab director kept encountering issues with Theranos’ device and tests, she chose ‘PR and fundraising’ over patient care,” Leach wrote. “During her fraud scheme, women received wrong tests about their pregnancies, Theranos generated wrong results for cancer tests, and one victim was led to believe that she had the virus that causes AIDS.”
During her three-month trial last year, Holmes attempted to shift blame to her ex-boyfriend and former chief operating officer Ramesh “Sunny” Balwani. She accused Balwani—who was later convicted of 12 counts of fraud in his own – of sexually and emotionally abusing her during their relationship.
“Balwani told me that I didn’t know what I was doing in business and that my convictions were wrong, that he was astonished at my mediocrity and if I followed my instincts, I was going to fail,” she said during emotional testimony on the stand, adding that because of the alleged abuse and control she often didn’t question his decisions, according to NBC News.
Balwani has denied abusing Holmes.
In their own motion, Holmes’ attorneys have argued for a much more lenient sentence of no more than 18 months behind bars, according to The Associated Press.
They argued that the intense media attention around the case had turned her into a “caricature to be mocked and vilified” and said the case has permanently destroyed her reputation.
The decision will ultimately lie with U.S. District Judge Edward Davila, who has been tasked with handing down the sentence on Friday.