Federal Judge Elizabeth Holmes, the founder of Theranos, sentenced her Friday to 11 years and 3 months imprisonment for defrauding investors in her now-defunct startup blood-testing that was once valued at 9 billion.
U.S. District Judge Edward Davila in San Jose sentenced Holmes, 38. Holmes was convicted by a jury last January after a three-month trial. While the prosecution recommended that Holmes be sentenced to 15 years imprisonment, the defense urged that the judge not impose any prison time.
Holmes, wearing a black blouse and skirt and dark trousers, hugged her family and partner after her sentence was delivered.
Holmes wept during the sentencing hearing. She said that she was devastated by her failures and would do many things differently if given the chance.
Holmes stated that she felt deep shame about the suffering of others because they failed her.
Davila, before delivering the sentence, called the case “troubling at so many levels” and asked Holmes, an “ingenious” entrepreneur, why she misrepresented her company to investors.
The judge stated that this was a fraud case in which an exciting venture was launched with high expectations, only to be derailed by untruths and misrepresentations.
Davila gave Holmes an April surrender date.
Her lawyers will ask the judge to grant her bail to continue her appeal. They will appeal the judge’s decision to confirm Holmes’ conviction by jury and her sentence at San Francisco’s 9th U.S. Circuit Court of Appeals.
Davila was told by Jeff Schenk, Assistant U.S. attorney, that a 15-year sentence would be “making an assertion that the ends don’t justify the means.”
Kevin Downey, Holmes’ attorney, requested home confinement. He claimed that leniency was justified as she wasn’t motivated by greed unlike someone who had committed a “great offence”.
According to court papers, the federal probation office recommended that a sentence of 9 years imprisonment be imposed.
Stephanie Hinds, U.S. attorney, said that Holmes’ sentence “reflects her audacity and the staggering damage that she caused.” Downey did not respond to Downey’s request for comment after he was released from court.
During the trial, prosecutors claimed that Holmes misrepresented Therano’s technology and finances. They also claimed that Holmes’ miniaturized blood test machine could run a variety of tests using just a few drops of blood. Prosecutors claimed that the company secretly used conventional machines from other companies for patient testing.
Holmes gave testimony to her defense, stating that she believed her statements to be correct at the time.
Four counts were convicted, but she was acquitted of four others alleging that she defrauded patients who had paid for Theranos.
Theranos Inc promised that it would revolutionize the way patients get diagnosed by replacing traditional labs in their care with small machines designed for use at home, in drugstores, and even on the battlefield.
Forbes called Holmes the world’s youngest self-made billionaire female in 2014. She was just 30 years old, and her stake at Theranos was valued at $4.5 billion. Theranos was dissolved after a series of Wall Street Journal articles in 2015 that questioned its technology.
In September, Amanda Seyfried won an Emmy Award as an actress for her portrayal of Holmes in “The Dropout”
Davila asked Holmes before she sentenced her if any of her victims were present in the courtroom.
Alex Shultz was the father of Tyler Shultz who worked at Theranos. His father George Shultz (former U.S. Secretary Of State) invested in Theranos. He told the judge that Holmes once described her technology as “revolutionary” to his family.
“What’s the hitch?” Holmes was asked by Holmes’ family member.
Holmes replied, “There is no hitch.”
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