| 12 December 2023, Tuesday |

Elizabeth Holmes arrives in court to face sentencing for Theranos fraud

Elizabeth Holmes, the creator of Theranos, arrived on Friday at a federal courthouse in San Jose, California, where she would be punished for cheating investors in her now-defunct blood testing firm.

Holmes will get a sentence from U.S. District Judge Edward Davila on three charges of investment fraud and one count of conspiracy. Holmes, 38, was found guilty by a jury in January after a three-month trial.

Prosecutors, who are seeking a 15-year prison sentence, called Holmes’ fraud “among the most substantial white collar offenses Silicon Valley or any other district has seen.”

Defendants in other major fraud cases have received sentences ranging from 10 to 25 years, prosecutors said in court papers. Examples included Enron CEO Jeffrey Skilling who was sentenced to more than 13 years in prison for his conviction on charges stemming from the company’s spectacular collapse.

But Holmes’ attorneys have asked that she receive a more lenient sentence of 18 months of home confinement, followed by community service, urging the judge not to make her a “martyr to public passion.”

More than 130 friends, family, investors and former Theranos employees submitted letters to Davila urging leniency.

They included U.S. Senator Cory Booker of New Jersey, who said Holmes “can, despite mistakes, make the world a better place.”

Prosecutors said Holmes misrepresented Theranos’ technology and finances, including by claiming that its miniaturized blood testing machine was able to run an array of tests from a few drops of blood. The company secretly relied on conventional machines from other companies to run patients’ tests, prosecutors said.

Once valued at $9 billion, Theranos Inc promised to revolutionize how patients receive diagnoses by replacing traditional labs with small machines envisioned for use in homes, drugstores and even on the battlefield.

Forbes dubbed Holmes the world’s youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.

But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned its technology.

At trial, prosecutors said Holmes engaged in fraud by lying to investors about Theranos’ technology and finances rather than allowing the company to fail.

In her testimony in her own defense, Holmes stated that she had thought her claims to be true at the time.

Holmes was found guilty on three counts but found innocent on four others that claimed she had cheated patients who had paid for Theranos tests.

Davila has rejected Holmes’ requests to have her convictions overturned, claiming that the evidence presented at trial supported them.

Holmes may appeal those decisions and her sentence to the 9th U.S. Circuit Court of Appeals after the sentence has been given.

  • Reuters