Mon. Dec 5th, 2022

A federal judge on Friday sentenced Theranos founder Elizabeth Holmes to 11 years and three months in prison for defrauding investors in her now-defunct blood-testing startup that was once valued at $9 billion.

In San Jose, California, U.S. District Judge Edward Davila convicted Holmes, 38, of three counts of defrauding investors and one count of conspiracy after a jury convicted her last January after a three-month trial. The prosecution proposed a sentence of 15 years in prison, while the defense urged the judge not to impose a prison sentence.

Holmes, dressed in a dark blouse and black skirt, hugged her parents and partner after the sentencing.

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Elizabeth Holmes of Theranos was found guilty of defrauding investors in the blood technology startup

During the sentencing hearing, Holmes wept as she said she was “devastated” by her failures and would have done many things differently if she had had the chance.

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“I felt a deep sense of shame for what people went through because I let them down,” Holmes said.

Before sentencing, Davila called the case “troubling on so many levels,” questioning what motivated Holmes, a “brilliant” entrepreneur, to misrepresent her company to investors.

“This is a case of fraud where an exciting venture began with high expectations only to be dashed by falsehoods, misrepresentations, plain arrogance and lies,” the judge said.

Davila set an April surrender date for Holmes.

Click to play video: 'Elizabeth Holmes, founder of Theranos, found guilty of 4 counts of fraud and conspiracy'

Elizabeth Holmes, founder of Theranos, found guilty of 4 counts of fraud and conspiracy

Her lawyers are expected to ask a judge to allow her to remain free on bail during a planned appeal. She is expected to appeal the judge’s decision to uphold the jury’s conviction against Holmes, as well as her sentence, to the 9th U.S. Circuit Court of Appeals in San Francisco.

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Assistant U.S. Attorney Jeff Schenk told Davila during the hearing that a 15-year sentence would be “making a statement that the ends do not justify the means.”

Holmes’ lawyer, Kevin Downey, asked for house arrest, saying leniency was justified because unlike someone who committed a “major crime” she was not motivated by greed.

The federal probation office recommended a sentence of 9 years in prison, according to court documents.

U.S. Attorney Stephanie Hinds said Holmes’ sentence “reflects the audacity of her massive fraud and the incredible harm she caused.” Downey declined to comment as he left court.

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Theranos ‘Sunny’ Balwani, former partner of Elizabeth Holmes, found guilty of fraud

Prosecutors said during the trial that Holmes misrepresented Theranos’ technology and finances, including claiming that its miniaturized blood-testing machine could run a series of tests from a few drops of blood. The company secretly relied on conventional machines from other companies to conduct patient tests, prosecutors said.

Holmes testified in her own defense, saying at the time she believed her statements were true.

She was convicted on four counts but acquitted on four other counts, alleging she defrauded patients who paid for Theranos tests.

Theranos Inc has promised to revolutionize the way patients receive diagnoses by replacing traditional laboratories with small machines designed for use in homes, pharmacies and even on the battlefield.

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Forbes named Holmes the youngest billionaire in the world in 2014, when she was 30 years old and her stake in Theranos was worth $4.5 billion. Theranos collapsed after a series of Wall Street Journal articles in 2015 questioned its technology.

Click to play video: 'Theranos and its founder accused of 'massive' fraud'

Theranos and its founder have been accused of ‘massive’ fraud

Actress Amanda Seyfried won an Emmy in September for her portrayal of Holmes in the limited series “The Dropout.”

Before sentencing Holmes, Davila asked if any of her victims were in the courtroom.

Alex Shultz, whose son Tyler Shultz worked at Theranos and whose father, former US Secretary of State George Shultz, invested in the company, told the judge that a family member once overheard Holmes describing its supposedly revolutionary technology.

“What’s the problem?” a family member asked Holmes, according to Shultz.

“No problem,” Holmes replied.

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(Reporting by Jody Godoy in New York and Dan Levine in San Jose; Editing by Noeleen Walder, Diane Craft and Will Dunham)