A federal judge has sentenced Theranos founder Elizabeth Holmes to more than 11 years in prison over her role in the blood testing firm that collapsed after its technology was revealed to be largely fraudulent.
Holmes was convicted in January on four counts of defrauding investors. She appeared Friday afternoon at the San Jose, California, courthouse where her nearly four-month-long trial began in August 2021, alongside relatives and supporters, including her partner, Billy Evans.
Prior to her sentencing, Holmes was given a last opportunity to speak to the court. Through tears, she expressed regret for letting down “the people who believed in us”.
“I am devastated by my failings,” she said. “Every day for the past years I have felt deep pain for what people went through because I failed them. I regret my failings with every cell of my body.”
In a statement preceding the sentencing, federal judge Edward Davila painted a picture of Silicon Valley as being a formerly rural agricultural center to “the crucible for innovation around the world”. He said its legacy depends on the ability of investors to make decisions “free from lies and misrepresentation”.
“This is a fraud case where an exciting venture went forward with great expectations and hope, only to be dashed by misrepresentation, hubris, and plain lies,” he said.
Davila said the court had calculated the total loss as $384m in investments and a $121m loss in share value that can be attributed directly to Holmes’s fraud. He also found that Holmes, through Theranos, defrauded more than ten investors – listing big name victims such as media mogul Rupert Murdoch and the family of former government official and investor Betsy DeVos.
Davila ordered Holmes to three years of supervised released once she’s out of prison. He will set a hearing date to determine the amount of restitution Holmes must pay at a later time. Holmes has been ordered to surrender into custody in April 2023.
Federal prosecutors had suggested the judge sentence Holmes to 15 years in prison and require her to pay $800m in restitution, while her lawyers requested a sentence of no more than 18 months to be served on house arrest.
Holmes founded Theranos after dropping out of Stanford at 19 years old, promising a revolutionary technology that could run hundreds of health tests on just a drop of blood. The company attracted big-name backers like former secretary of state Henry Kissinger and the former defense secretary James Mattis, who testified against her in the trial.
Theranos’s downward spiral began when the Wall Street Journal in 2015 revealed shortcomings and inaccuracies in its core technology. Theranos dissolved in 2018 and Holmes was charged with 12 counts of fraud, alongside her co-executive and former romantic partner, Sunny Balwani, who was convicted on 12 counts in his own trial.
More than 130 people submitted letters of support for Holmes ahead of the hearing, including Evans and Senator Cory Booker. “I firmly believe in the possibility of rehabilitation and in the power of redemption for anyone,” Booker wrote of Holmes, whom he said he considers a friend.
Throughout the trial, Holmes’s lawyers cast her as an ambitious but misguided young founder who was unaware of the extent to which Theranos’s technology was malfunctioning. In a letter to judges filed last week, they argued sending Holmes to prison was unnecessary.
“Ms Holmes is no danger to the public,” Holmes’s lawyers said in the court documents. “She has no criminal history, has a perfect pre-trial services compliance record and is described by the people who know her repeatedly as a gentle and loving person who tries to do the right thing.”
Her legal team has also argued Holmes was the victim of abuse at the hands of Balwani, who they say influenced her decisions at the company that led to its collapse. Balwani, who has denied these claims, is due to be sentenced in December.