Elizabeth Holmes, the disgraced Theranos founder who was once compared to Steve Jobs before being convicted of fraud by investors who backed the now-defunct blood testing company, has been sentenced to more than 11 years in prison.
The pregnant Holmes, who wore a black skirt and blouse, was sentenced to 135 months in prison by US District Judge Edward Davila in the same California courtroom where a jury convicted her in January.
Shortly after the verdict, 38-year-old Holmes turned and hugged her crying mother. She was ordered to serve the sentence on April 27. Her lawyers are expected to ask the judge to release her on bail during her appeal, which is due to be filed within the next two weeks.
Holmes’ sentence was less than the 135-month sentence, less than the 15 years required by prosecutors, and on the lower end of the 11-14 year guidelines.
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Her legal team had asked for a detention of no more than 18 months, preferably in domestic confinement. A parole report, also submitted to Davila, recommended a nine-year sentence for Holmes.
Before Davila delivered his sentence, there was a flurry of excitement in the courtroom when prosecutor John Bostic alleged that Holmes once said, “You don’t put attractive people like me in jail.”
Holmes’ defense attorney Kevin Downey denied the allegation, saying prosecutors never called witnesses at the trial who could testify to the alleged remark.
The conviction marks the end of a saga dissected into an HBO documentary and an award-winning Hulu TV series about Holmes’ meteoric rise and epic downfall.
Once valued at $9 billion, Theranos promised to revolutionize the way patients receive diagnostics by replacing traditional labs with small machines intended for use in homes, drugstores, and even on the battlefield.
Forbes named Holmes the world’s youngest self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.
Prosecutors are seeking $804 million in compensation from Holmes.
The amount covers most of the nearly $1 billion Holmes raised from a list of sophisticated investors including software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart.
While courting investors, Holmes utilized a senior Theranos board that included former US Secretary of Defense James Mattis, who testified against her during her trial, and two former US secretaries of state, Henry Kissinger and the late George Shultz, whose son issued a statement surrendered to beating up Holmes for hatching a plan that “played for the fool” on Shultz.
Her lawyers have argued that Holmes deserves more lenient treatment as a well-meaning entrepreneur who is now a devoted mother with another child on the way.
Her arguments were supported by more than 130 letters submitted by family, friends and former colleagues praising Holmes.
Holmes’ reporting date for the start of her prison time could be the result of her second pregnancy in two years.
After giving birth to a son just before her trial began last year, Holmes got pregnant sometime this year while she was out on bail.
Although her lawyers made no mention of the pregnancy in an 82-page memo presented to Davila last week, the pregnancy was confirmed in a letter from her current partner, William “Billy” Evans, urging the judge to be merciful.
In that 12-page letter, which included pictures of Holmes doting on her 1-year-old son, Evans mentioned that earlier this year Holmes had competed in a swimming competition on the Golden Gate Bridge while she was pregnant.
He also noted that Holmes suffered a case of COVID-19 while pregnant in August. Evans did not disclose Holmes’ due date in his letter.
Duncan Levin, a former federal prosecutor who is now a defense attorney, predicted Davila’s verdict would not be affected by the pregnancy but expects the judge to allow her to remain free until after the baby is born.
“She will not be at any more risk of absconding after her conviction than while she was awaiting conviction,” Levin said. “We need to temper our judgments with a degree of humanity.”
The pregnancy makes it more likely that Davila will be criticized no matter what sentence he gets, predicted Amanda Kramer, another former federal prosecutor.
“There’s a pretty healthy debate going on about what kind of penalty is required to create a general deterrent to sending a message to others who are thinking of crossing that line from sharp salesmanship to material misrepresentation,” Kramer said.
Federal Attorney Robert Leach insisted that Holmes deserved a severe sentence for orchestrating what he described as one of the most egregious white-collar crimes ever committed in Silicon Valley.
In a scathing 46-page memo, Leach told the judge he had an opportunity to send a message that would curb the hubris and hyperbole unleashed by the tech boom of the past decade.
Holmes “has capitalized on her investors’ hopes that a young, dynamic entrepreneur is transforming healthcare,” Leach wrote.
“And through her deception, she achieved spectacular fame, adoration, and trillions of dollars in wealth.”
Downey painted Holmes here as a selfless visionary who spent 14 years of her life revolutionizing healthcare with technology that would be able to screen for hundreds of diseases and other foods with just a few drops of blood.
Although evidence presented during her trial showed the tests produced wildly unreliable results that could have steered patients the wrong way, her attorneys claimed that Holmes never stopped perfecting the technology until Theranos collapsed in 2018.
They also pointed out that Holmes never sold any of their Theranos shares — a $4.5 billion stake in 2014, when Holmes was being hailed as the next Steve Jobs on the covers of business magazines.
Defending against criminal charges has left Holmes “substantial debts from which she is unlikely to recover,” Downey wrote, implying she will likely never pay any compensation Davila may order as part of her sentence.
“Holmes is not a threat to society,” Downey wrote.
Downey also asked Davila to consider the alleged sexual and emotional abuse Holmes suffered while she was romantically involved with Ramesh “Sunny” Balwani, who became a Theranos investor, top executive, and eventually an accomplice in her crimes.
Balwani, 57, is due to be sentenced in December. 7 after being convicted of 12 counts of fraud and conspiracy at a trial in July.
This story originally appeared in the New York Post and is reproduced with permission
Originally credited as Theranos founder Elizabeth Holmes, sentenced to 11 years in prison