Elizabeth Holmes sentenced to 11 years in prison for Theranos fraud – TechCrunch

Ten months after she was found guilty of fraud, the youngest former self-made billionaire, Elizabeth Holmes, was sentenced to 11.25 years in prison, plus three years of supervised release. At her trial, she was found guilty of four of 11 charges related to defrauding investors, but she was not found guilty of defrauding patients.

Holmes, the former founder and CEO of Theranos, could have faced up to 20 years in prison for each of the four charges. By comparison, former pharmaceutical executive Martin Shkreli was sentenced to seven years in prison for securities fraud, but was released after just over four years.

In the San José courthouse, both sides of the United States vs. Elizabeth Holmes presented their cases on whether Judge Edward Davila can consider Holmes.reckless contempt” of the patients in the sentence. Dávila rejected that proposal, since in the original trial, Holmes was only found guilty of defrauding investors.

Regardless, it took more than four hours before Holmes’s sentence was decided. Alex Schultz, father of whistleblower Tyler Schultz, spoke in court about how his daughter slept with a knife under her pillow when he suspected Theranos private investigators were following him.

Then Holmes herself spoke. “I regret my failures with every cell in my body,” she said. said. It was then that Judge Dávila pronounced his decision.

Holmes is expected to report to jail in April. Currently, she is pregnant with her second child.

Theranos Fraud

Holmes founded Theranos in 2003 after dropping out of Stanford. He pitched to investors and partners the technology that would revolutionize the healthcare system: Instead of drawing blood intravenously and waiting days for test results, his technology would prick a small amount of blood and instantly perform dozens of tests on she. She soon became the CEO of a company with a $10 billion valuation, but as it turned out, the technology didn’t work.

Theranos has been missing since 2018, but Holmes’s criminal trial began last fall after delays due to the pandemic and the birth of her first child. According to a letter from Holmes’s husband in a public court filing, she is now pregnant with a second child. The presentation includes 282 pages of other letters from Holmes’s friends, family and business associates, ranging from childhood photos and drawings to notes from high-profile supporters including Sen. Cory Booker (D-NJ) and venture capitalist Tim Draper.

“While there is substantial popular outcry against Theranos and Elizabeth, the attitude in much of the venture world is very different,” Draper wrote. “Venture capital-backed start-ups often announce and deliver products to market before they are ready.”

The former CEO’s sentencing was further delayed because her lawyers tried to request a new trial, arguing that new evidence had come to light after former Theranos lab director Adam Rosendorff visited Holmes at her home in an attempt to find closure.

Rosendorff, who worked at Theranos from 2013 to 2014, testified for six days last year during Holmes’s four-month trial. With his highly technical knowledge of the inner workings of Theranos laboratories, Rosendorff’s testimony was key to the trial. In court, she said Holmes knew Theranos technology produced inaccurate blood test results, but she pushed for it to be used on patients anyway. After repeatedly raising her concerns about the faulty technology, she eventually resigned from Theranos.

Holmes’s lawyers alleged that when Rosendorff visited his home this summer, he expressed guilt for making Theranos appear worse off than he did in court. But Judge Edward Davila found no merit in these accusations. Rosendorff once again asserted that last year’s testimony was accurate. The former director of the laboratory clarified that he felt sorry for Holmes’s daughter, that she will grow up without a mother if she is sent to prison, but not for Holmes herself.

Holmes’ ex-boyfriend and Theranos COO Ramesh “Sunny” Balwani awaits sentencing. He was convicted on 12 of 12 counts at his own trial, where the jury found him guilty of defrauding both patients and investors.

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