Elizabeth Holmes Sentenced To 11 Years In Prison For Fraud

Topline

Failed Theranos founder Elizabeth Holmes was sentenced Friday to 11.25 years in prison after being convicted earlier this year of defrauding investors in her famed blood testing company that took Silicon Valley by storm before it was revealed its technology could not perform the tests it said it could.

Former Theranos CEO Elizabeth Holmes on November 18, 2022 in San Jose, California. Holmes appeared … [+] in federal court for sentencing after being convicted of four counts of fraud for allegedly engaging in a multimillion-dollar scheme to defraud investors in her company Theranos, which offered blood testing lab services.

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Key Facts

Ahead of sentencing, U.S. District Judge Edward Davila said at least 10 Theranos victims were defrauded of roughly $121.1 million, and the fact that Holmes had not accepted responsibility for her actions will count against her, according to the Wall Street Journal.

Holmes, 38, was convicted earlier this year of three counts of wire fraud and one count of conspiracy to commit wire fraud—she was only found guilty on charges relating to investors, and not doctors or patients.

Her business partner Sunny Balwani was convicted in July on 12 counts of wire fraud and conspiracy to commit wire fraud, and is scheduled to be sentenced on December 7.

Holmes’ faced up to 20 years in prison; Her team requested that she spend only 18 months in prison, though preferably home confinement and community service, and prosecutors sought 15 years in prison, three years on probation and $800 million in restitution.

Her team said over 130 people submitted letters of support for Holmes, including former Theranos investors and employees.

Crucial Quote

“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,” Holmes said, before she was sentenced. “I regret my failings with every cell in my body.”

Big Number

$4.5 billion. That’s how much Forbes estimated Holmes was worth in 2015, at the height of her success.

Key Background

Holmes dropped out of college when she was 19 to start Theranos, a company she believed would revolutionize the healthcare industry with its machines, which the business said could perform dozens of tests using just a single drop of blood, instead of a full vial. The company gained the backing of investors like Rupert Murdoch, Henry Kissinger, and Larry Ellison and, former Secretary of State George Shultz was on its board. It secured a deal with Walgreens to have its machines in-stores. Holmes, a rare female founder in the tech space, gained notoriety and was featured on magazine covers—including Forbes—and became known for her Steve Jobs-like repeatable wardrobe and deep voice. In 2015, the Wall Street Journal first exposed that Theranos’ technology couldn’t perform the tests it said it could. Holmes and Balwani, who served as an executive at Theranos and was also in a relationship with Holmes, were charged in 2018, the same year the company shut down. Holmes accused Balwani of abusing her, something Balwani has denied. Holmes testified during her trial, and said she did not intend to mislead anyone, and admitted to using commercial blood testing machines in place of the company’s technology.

Tangent

Holmes became a figure in pop-culture after her alleged misdeeds were the subject of several TV programs. Theranos and Holmes were the subject of the 2019 HBO documentary The Inventor: Out For Blood In Silicon Valley. This year, she was portrayed by Amanda Seyfried in the Hulu miniseries The Dropout, about the rise and fall of Theranos. Seyfried won an Emmy for her portrayal. Academy Award Winner Jennifer Lawrence recently said she quit an Apple production based on Holmes, Bad Blood, after seeing Seyfried’s performance. “I thought she was terrific. I was like, ‘Yeah, we don’t need to redo that.’ She did it,” Lawrence said.