Elizabeth Holmes, founder, and ex-CEO of Theranos is sentenced to 11.25 years for wire fraud and conspiracy to commit wire fraud. The jail time will be followed by 3 years of supervised release. The sentencing order was read out by Judge Edward Davila of the United States District Court for the Northern District of California.
Elizabeth Holmes who is a dropout from Stanford University founded Theranos in 2003, a health technology company that claimed that it had devised blood tests that required very small amounts of blood. Holmes who became a sensation in the business world went on to raise millions of dollars from various investors by claiming technology and products which the company did not possess.
While reading out the sentence, Judge Edward Davila said “failure is normal. But failure by fraud is not”. He went on to say that there was clear proof of conspiracy as texts between Ramesh Balwani and Elizabeth Holmes suggests.
During the court hearing, the prosecution said that Elizabeth Holmes and Theranos knew that the company will not be successful and still went on to collect millions of dollars from investors. The prosecution set a loss of 804 million dollars for the Investors.
The judge ruled that the reasonable total loss to investors is 121 million dollars and the court will at a later date decide upon how much Elizabeth Holmes will have to pay as a penalty.
When asked about the sentencing period, the prosecution asked for 15 years of jail time in federal prison for Elizabeth Holmes.
Before the sentencing, Elizabeth Holmes told the court that she was devastated by her failings and that she apologizes to her investors and patients who believed in her ideas. She also said that she is taking full responsibility for whatever has happened at Theranos. She wrapped up her statement by saying sorry to everyone.
The reality of Theranos and claims made by Elizabeth Holmes were brought out by John Carreyrou of The Wall Street Journal after conducting a thorough investigation into the workings of the company. On January 3, 2022, Holmes was found guilty of four counts of defrauding investors – three counts of wire fraud, and one of conspiracy to commit wire fraud
