Judge sentences Elizabeth Holmes, a former aide to the founder of Theranos, to 15 years in prison for convincing people to trust her failed blood-testing startup.
Judge Edward Davila of the US District Court sentenced Ramesh Balwani to almost 13 years imprisonment, followed by three years of supervised freedom for his part in what prosecutors called a massive fraud perpetrated on Theranos investors as well as patients.
Balwani is expected to surrender in order to be taken into custody on March 15.
The US biotech star Holmes has fallen. Her fraud trial was different from Balwani’s. She asked for an appeals court to reverse her conviction and the resulting sentence of over 11 years imprisonment.
Holmes appealed that she was challenging the November sentence and “any and all adverse decisions incorporated in, or ancillary to the judgment.”
In January, she was convicted of four counts of felony fraud for convincing investors that she had invented a revolutionary medical device. The company collapsed after an investigation by The Wall Street Journal.
According to the court, Balwani was found guilty by jurors on all 12 fraud charges filed by federal prosecutors.
Holmes and Balwani are two rare instances of tech executives being charged over a young company that failed to live up to its promises in a sector rife with failed startups.
Holmes, who is pregnant will not have to give up until April next year according to an order of Mr Davila who presided over both trials in San Jose, California.
The 38-year-old became a Silicon Valley star when she claimed that her company had developed a simple-to-use kit that could perform a variety of medical diagnostics using just a few drops of blood.
Holmes described Balwani at Theranos as a controlling force during her trial.
Her trial brought attention to the blurred line that separates hustle and criminal dishonesty in the industry.
Robert Leach, a US prosecutor, told jurors at a federal courthouse in San Jose that Balwani, 57, piloted the firm along with Holmes. He also said that the pair were “partners” in all things, even their crimes.
Holmes and Balwani both denied the accusations in court. They countered that they believed in Theranos’ potential for failure, not fraud.
Balwani, who is almost two decades older than Holmes, was appointed to lead the company she founded in 2003 when she was just 19 years old.
Prosecutors claimed that Holmes and Balwani knew the technology didn’t work as advertised but still promoted it as revolutionary for patients and investors who invested in the company.
Theranos’ success brought in luminaries like Henry Kissinger and Rupert Murdoch. However, a series of Wall Street Journal reports that cast doubt on Mr Murdoch’s claims about the firm set off a chain reaction that saw the company’s fall.
