A federal judge has sentenced Theranos founder Elizabeth Holmes to more than 11 years in prison for her role in the blood-testing company that collapsed after its technology was found to be largely fraudulent.
In January, Holmes was convicted on four counts of defrauding investors. She appeared Friday afternoon at a courthouse in San Jose, California, where her nearly four-month trial began in August 2021, along with relatives and supporters, including her partner Billy Evans.
Before the sentencing, Holmes was given one last chance to address the court. Through tears, she expressed her regret for letting down “the people who believed in us”.
“I am devastated by my failures,” she said. “Every day for the past few years I have felt the deep pain of what people have gone through because I let them down. I regret my failures with every cell in my body.”
In a statement leading up to the sentencing, federal judge Edward Davila painted Silicon Valley as a former rural agricultural center in “the crucible of innovation around the world.” He said his legacy depends on investors’ ability to make decisions “without lies and misrepresentation.”
“This is a case of fraud where an exciting venture began with great expectations and hope, only to be destroyed by misrepresentation, hubris and plain lies,” he said.
Davila said the court calculated a total loss of $384 million in investments and a $121 million loss in stock value attributable directly to Holmes’ fraud. It also revealed that Holmes defrauded more than a dozen investors through Theranos – listing big-name victims such as media mogul Rupert Murdoch and the family of former government official and investor Betsy DeVos.
Davila was ordered by Holmes to serve three years of supervised release after he gets out of prison. He will later set a hearing date to determine the amount of restitution Holmes must pay. Holmes was ordered to surrender in April 2023.
Federal prosecutors suggested the judge sentence Holmes to 15 years in prison and require her to pay $800 million in restitution, while her attorneys sought a maximum sentence of 18 months to be served under house arrest.
Holmes founded Theranos after dropping out of Stanford at age 19, promising revolutionary technology that could run hundreds of health tests on just a drop of blood. The company attracted big names such as former Secretary of State Henry Kissinger and former Defense Secretary James Mattis, who testified against it at trial.
Theranos’ downward spiral began when the Wall Street Journal exposed flaws and inaccuracies in its core technology in 2015. Theranos dissolved in 2018, and Holmes was indicted on 12 counts of fraud, along with his co-executive and former romantic partner, Sunny Balwani, who was convicted on 12 counts at his own trial.
More than 130 people sent letters of support to Holmes ahead of the hearing, including Evans and Sen. Cory Booker. “I firmly believe in the possibility of rehabilitation and the power of redemption for anyone,” Booker wrote of Holmes, whom he considers a friend.
During the trial, Holmes’ lawyers cast her as an ambitious but misguided young founder who was unaware of the extent to which Theranos’ technology was flawed. In a letter to the judges filed last week, they argue that sending Holmes to prison was unnecessary.
“Ms. Holmes is not a danger to the public,” Holmes’ attorneys said in court documents. “She has no criminal record, has a perfect record of compliance with pretrial services, and people who know her describe her as a gentle, loving person who tries to do the right thing.”
Her legal team also claimed that Holmes was the victim of abuse by Balwani, who they say influenced her decisions at the company that led to its collapse. Balwani, who has denied the allegations, is due to be sentenced in December.