Elizabeth Holmes is was sentenced to more than 11 years in prison for defrauding investors by falsely claiming that his technology could detect disease from a drop of blood.
The decision of the former Theranos CEO is the end of the saga of the young Silicon Valley founder – in which he lured investors with empty promises and good ideas and spent millions of dollars. And it’s an issue that could affect how investors evaluate new startups, experts say. Many startups have used hyperbole to explain their vision and raise money, but fraud cases do not happen.
Anat Alon-Beck, a law professor at Case Western Reserve University, said: “They pushed the envelope too far. You fake it ’till you make it, but it was very ‘fake it.’
But the case is not over. Holmes’ ex-boyfriend and business partner, Ramesh “Sunny” Balwani, is scheduled to be sentenced on December 7. He was convicted of 12 counts of fraud and conspiracy against Theranos investors and patients. Holmes has also accused her of abusing him, but Balwani has denied this.
Holmes sought funding for Theranos, which he left Stanford University to start, saying that his technology would revolutionize medicine, because it could use just a few drops of blood to analyze hundreds of diseases. He turned a startup into a $9 billion unicorn. But whistleblowers revealed that Holmes had lied about what he had done. Instead of saving lives, it has been putting patients at greater risk of false positives.
Holmes served 20 years in prison for his actions. In a memo that portrays Holmes as a philanthropic child who grew into a reckless young business leader, his lawyers asked for 18 months in prison followed by supervised release and community service. Prosecutors demanded 15 years in prison and $8 million in restitution.
“I stand before you and take the responsibility of Theranos. I loved Theranos. It was my life’s work,” Holmes said. he said before receiving a sentence of 135 months, or 11.25 years. “I regret my failures with every cell in my body.”
In October, Holmes tried to avoid prison again by seeking a new trial. (After his sentencing earlier this year, he has filed several such complaints.) The latest incident came after former Theranos laboratory chief Adam Rosendorff, a witness who testified against Holmes, came to his home to try to apologize for his role in his impeachment. . That prompted Holmes to challenge the use of his evidence against him, but a judge denied the request in early November.
In June 2018, Holmes was indicted on 11 counts of corruption and was charged with four counts: one count of conspiracy and three counts of wire fraud. The court did not find him guilty of cheating patients through blood tests, which gave them false positives for HIV, miscarriage, and cancer. Theranos struck a deal with Walgreens, which included plans to install Theranos blood testing stations in thousands of its stores across the US. But Walgreens didn’t do a full, independent validation of the technology, and instead gambled on Theranos.