Former Silicon Valley star Elizabeth Holmes was sentenced Friday to just over 11 years in prison for fraud in the management of her start-up Theranos. The company promised a revolution in health diagnostics.
The accused, pregnant, has until April 27 to begin her sentence, the judge said. Ms Holmes was found guilty in January of lying to investors regarding her company’s real progress.
‘I take, in front of you, my responsibilities for Theranos. I loved Theranos. It was my life’s work,’ she told the hearing, sobbing, just before sentencing. ‘I am devastated by my failures,’ she added. “Not a day has gone by in the past few years that I haven’t been deeply touched by what people have gone through because of my mistakes,” she added.
Appearing nervous as she arrived at court in San Jose, Calif., the 38-year-old former executive was accompanied by her parents and partner. The prosecution had requested fifteen years in prison and wanted her to return 800 million dollars to her victims. The defense had pleaded for a maximum sentence of one and a half years. Her lawyer said Friday that she would appeal.
‘Manipulation and lies’
‘The tragedy in this case is that Ms Holmes is brilliant’ and she managed to find a place for herself in a world ‘dominated by male egos’, noted the judge. But there was also enough evidence of ‘manipulations and lies used to do business’, he added.
The magistrate explained that he disregarded Elizabeth Holmes’ apparent disregard for potential risks to patients, as she was acquitted of charges of defrauding them. He also indicated that he had not taken into consideration all the losses generated by the fall of his company but only part of those collected by ten investors, ie 121 million dollars.
The amount it will ultimately have to return to investors will be decided at a later date, the magistrate said.
Prosecutor Jeff Schenk argued in court that the sentence should reflect the idea that ‘the end does not justify the means’. This is not ‘punishment for Ms Holmes’ dream’, but punishment for ‘the decision to deceive investors’, he insisted.
Diagnostic sanguin rapide
The young woman’s lawyer Kevin Downey countered that his client had never been motivated by greed: she might have become rich, but never sold shares, using the money to build her technical. It represents “a minimal danger to society”, he said.
Elizabeth Holmes founded Theranos in 2003, aged just 19, with the idea of making a blood diagnostic tool that was quick, painless and cheaper than those in traditional labs.
With the help of a very elaborate story and appearance, she had managed in a few years to gain the confidence of luminaries and to raise funds from prestigious investors attracted by the profile of this young woman, a rarity in the male world of Californian engineers.
‘I thought it would be the next Apple’, had summed up during the trial Adam Rosendorff, who was once the director of the company’s laboratory.
Fear of bites
The story was beautiful. As a child, she hated injections. So she wanted to invent a machine that would perform hundreds of blood diagnoses from a single drop of blood, taken from a fingertip.
Media magnate Rupert Murdoch, former Secretary of State Henry Kissinger and Jim Mattis, Donald Trump’s defense minister, were once convinced by Elizabeth Holmes’ project.
At its peak, the company was valued at nearly $10 billion. But in 2015, the scandal came to light when the Wall Street Journal revealed that the machine never worked.
Ramesh ‘Sunny’ Balwani, the former companion of Elizabeth Holmes and chief operating officer of Theranos, was tried separately. He was also found guilty of fraud. His sentence is due on December 7.
/ATS
