Theranos Founder Elizabeth Holmes Sentenced to 11 Years in Prison in Fraud Case
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Elizabeth Holmes, the founder of Theranos who was convicted on four counts of investor fraud and conspiracy in January, was sentenced Friday to 11 years in prison.
Holmes, who is pregnant with her second child, faced up to 20 years in prison and a fine of $250,000 plus restitution for each count. Lawyers for Holmes requested a sentence of home confinement and community service and no more than 18 months in prison. Prosecutors recommended a 15-year prison sentence, a three-year supervised release and more than $800 million in restitution.
“Fifteen years is the right sentence because it is the sentence that follows the law,” prosecutor Jeff Schenk said. “The sentence is the thing that causes the respect for the law.”
U.S. District Judge Edward Davila explained the factors in his sentencing on Friday before he handed it down, saying he would not add time to the sentence based on the harm the blood-testing company did to patients, as Holmes was acquitted on patient-related charges in her trial. He added that her status as founder and chief executive of the company would not factor in, either.
However, Davila said Holmes’s failure to accept responsibility for the crime would be counted against her.
Holmes addressed the court briefly before the sentencing and expressed regret.
“I loved Theranos. It was my life’s work,” she said. “The people I tried to get involved with Theranos were the people I loved and respected the most. 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 said, apologizing to Theranos employees, investors and patients.
“I gave everything I had to building our company and saving our company,” she added. “I regret my failings with every cell in my body.”
Holmes started Theranos as a 19-year-old Stanford University dropout and quickly rose to fame as an icon of innovation after the company claimed it could test for a range of conditions with only a few drops of blood from a finger prick. Her huge claims and stardom helped the company raise $945 million from investors, including Oracle founder Larry Ellison, media mogul Rupert Murdoch and the Walton family of Walmart.
Theranos, once valued at $9 billion, began its descent in 2015 after the Wall Street Journal reported that the company had misled investors and patients: its device had only ever been able to perform roughly a dozen of the hundreds of tests it offered. Theranos secretly used third-party manufactured devices from traditional blood testing companies instead.
Holmes and the now-defunct company settled fraud charges with the Securities and Exchange Commission in 2018 under a deal that did not require an admission nor denial of wrongdoing.
