Elizabeth Holmes, the disgraced Theranos founder who was once compared to Steve Jobs before she was found guilty of defrauding investors who backed the now-defunct blood-testing company, has been sentenced to more than 11 years in prison.
US District Judge Edward Davila sentenced the pregnant Holmes, who was dressed in a black skirt and blouse, to 135 months behind bars in the same California courtroom where a jury convicted her in January.
Moments after the verdict was handed down, the 38-year-old Holmes turned to hug her crying mother. She was ordered to begin serving the sentence on April 27. Her lawyers are expected to ask the judge to allow her bail during her appeal, which must be filed in the next two weeks.
Holmes’ sentence was short of the 135-month prison sentence and was short of the 15 years prosecutors had requested and on the lower end of the 11-14-year guidelines.
Her legal team had asked for no more than 18 months in prison, preferably in home confinement. The surveillance report to Davila also recommended nine years’ imprisonment for Holmes.
Before Davila delivered his verdict, the courtroom was an uproar when the prosecuting attorney, John Bostic, claimed that Holmes once said, “They don’t put attractive people like me in jail.”
Holmes’ defense attorney, Kevin Downey, disputed the claim, saying that the prosecution never called any witnesses during the trial who could testify to the alleged remark.
The ruling marks the end of a series dissected in the award-winning HBO documentary and Hulu TV series about Holmes’ meteoric rise and epic downfall.
Once valued at $9 billion, Theranos promised to revolutionize how patients receive diagnoses by replacing traditional laboratories with small machines envisioned for use in homes, pharmacies, 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 want Holmes to pay $804 million in damages.
The amount covers most of the nearly $1 billion that Holmes raised from a list of savvy investors that included software mogul Larry Ellison, media mogul Rupert Murdoch, and the Walton family behind Walmart.
While wooing investors, Holmes benefited from a high-profile Theranos board that included former US Secretary of Defense James Mattis, who testified against her during her trial, and former US Secretaries of State, Henry Kissinger and the late George Shultz, whose son submitted a statement blasting Holmes for concocting Schultz’s “playing the fool” scheme. “.
Her lawyers have argued that Holmes deserves more lenient treatment as a bona fide entrepreneur who is now a devoted mother with another child on the way.
Their arguments are supported by more than 130 letters submitted by family, friends and former colleagues praising Holmes.
Holmes’ reported date for the start of her prison term may have been the result of her second pregnancy in two years.
After giving birth to a son shortly before her trial began last year, Holmes became pregnant at some point while on bail this year.
Although her attorneys did not mention the pregnancy in an 82-page memo filed with 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 photos of Holmes dancing to their 1-year-old son, Evans mentioned that Holmes participated in the Golden Gate Bridge swimming event earlier this year while pregnant.
He also noted that Holmes experienced a case of COVID-19 in August while pregnant. Evans did not disclose when Holmes would be due in his letter.
Duncan Levine, a former federal prosecutor who is now a defense attorney, predicted that Davila’s sentencing decision would not be affected by the pregnancy, but he expected the judge to allow her to remain free even after the baby is born.
“She will be in no more danger of her flight after being sentenced than she would be while awaiting sentencing,” Levine said. “We have to temper our sentences with a measure of humanity.”
Amanda Kramer, another former federal prosecutor, expected Davila to come under fire for being pregnant, no matter what punishment it entailed.
“There’s a very healthy discussion about the kind of sentence needed to create public deterrence to send a message to others who are considering crossing that line from sharp salesmanship to material misrepresentation,” Kramer said.
Federal Prosecutor Robert Leach declared categorically that Holmes deserves heavy punishment for engineering a scam he described as one of the most egregious white-collar crimes ever committed in Silicon Valley.
In a 46-page scathing note, Leach told the judge he had an opportunity to send a message that curbs the arrogance and exaggeration unleashed by the tech boom of the past decade.
“Holmes seized on the hopes of her investors that a young, dynamic entrepreneur had transformed health care,” Leach wrote.
“And through her deception, she got amazing fame, adoration and a multi-billion dollar fortune.”
Downey Holmes portrayed her as a selfless visionary who spent 14 years of her life trying to revolutionize healthcare with technology that was supposed to be able to scan for hundreds of illnesses and other ailments with just a few drops of blood.
Although evidence presented during her trial showed that the tests yielded wildly unreliable results that could have steered patients in the wrong direction, her lawyers asserted that Holmes never stopped trying to perfect the technology until Theranos collapsed in 2018.
They also noted that Holmes never sold any of its shares in Theranos — a $4.5 billion stake in 2014 when Holmes was hailed as the next Steve Jobs on the covers of business magazines.
Defending herself against the criminal charges left Holmes “with a substantial debt from which she is unlikely to recover,” Downey wrote, noting that she was unlikely to pay any compensation that Davila might order as part of her sentence.
Downey wrote: “Holmes is not a danger to society.”
Downey also asked Davila to look into Holmes’ alleged sexual and emotional abuse while romantically involved with Ramesh “Sunny” Balwani, who became a Theranos investor, chief executive, and eventually accomplice in her crimes.
Balwani, 57, is due to be sentenced December 7 after being found guilty in a July trial on 12 counts of fraud and conspiracy.
This story originally appeared on the New York Post and is reproduced with permission
Originally published as Theranos Founder Elizabeth Holmes Sentenced to 11 Years in Prison