Elizabeth Holmes sentenced to more than 11 years in prison for fraud | CNN Business

CNN — Elizabeth Holmes was sentenced to more than 11 years in prison on Friday after being convicted in January of defrauding investors while running the failed blood testing startup Theranos. Judge Edward Davila sentenced him to 11 years and 3 months in prison, and after Holmes was released, he was given another 3 years of supervision. The reward also includes a fine of $400 or $100 per fraud. Compensation will be determined at a later date. Holmes was ordered to detain himself on April 27, 2023. She is expected to appeal her own ruling. Convicted in January of four counts of defrauding investors, Holmes faces up to 20 years in prison and a fine of up to $250,000, with restitution per count. Government lawyers sought 15 years in prison, probation, and damages, while Holmes’ probation officer asked for nine years in prison. Holmes’ defense attorneys asked Davila, who presided over her case, to give her probation and community service after she sentenced her to up to 18 months in prison. Before her sentencing was announced, Holmes spoke at the courthouse in San Jose, California, in tears. “I loved Theranos,” she said. She was the work of my life,” she said. “The people I tried to connect with Theranos were the people I loved and respected the most. I am devastated by my failures.” She also apologized to Theranos’ staff, investors and patients. “I’m really, really sorry. I gave everything I had to build and keep our company alive,” she said. “I regret my failure with every cell of my body.” One of Holmes’ lawyers, Kevin Downey, said that unlike other defendants in the corporate fraud case, the Theranos founder did not express greed, such as cashing out shares or spending money on yachts and planes. ” Instead, the money was “used to build medical technology.” Federal Prosecutor Jeffrey Schenk pointed out that while Holmes did not gain any financial benefit, her fraud earned her reputation, respect, and lifestyle. “These are her benefits that she is still receiving,” he said. Friday’s sentencing hearing prevented Holmes’ surprising downfall. Hailed as a tech industry icon for her company’s promise to test various conditions with just a few drops of her blood, she is now one of the rare tech founders to be convicted and jailed for her company’s missteps. Holmes, now 38, started Theranos in 2003 at the age of 19 and then dropped out of Stanford University to pursue the company full-time. A decade later, Holmes began courting the press that Theranos had invented a technique that could accurately and reliably test for a variety of conditions using a few drops of blood taken from a prick of a finger. Theranos has raised $945 million from an impressive list of investors including media mogul Rupert Murdoch, Oracle founder Larry Ellison, the Walton family of Walmart and the billionaire family of former education secretary Betsy DeVos. At its peak, Theranos was valued at $9 billion, making Holmes a billionaire on paper. She has been lauded on magazine covers and frequently donned a signature black turtleneck that has drawn comparisons to her late Apple CEO Steve Jobs. (She didn’t make that face in court.) The company began to unravel after a 2015 Wall Street Journal investigation found that the company performed only about a dozen of the hundreds of tests it provided using its proprietary blood testing device. with dubious accuracy. Instead, Theranos relied on third-party manufacturing devices from traditional blood testing companies. In 2016, Theranos voided two years of blood test results. In 2018, Holmes and Theranos settled allegations of “mass fraud” with the Securities and Exchange Commission, but neither admitted nor denied the charges as part of the deal. Theranos soon disbanded. At her trial, Holmes alleged that while running the company, she had been in an abusive relationship with then-boyfriend and Theranos COO Ramesh “Sunny” Balwani for 10 years. She claimed that Balwani tried to control almost every aspect of her life, including disciplining her diet, voice and image, and isolating herself from others. (Balwani’s lawyer denied her claims.) In July, Balwani was found guilty of all 12 charges in a separate trial and faces the same potential maximum prison sentence as hers. Balwani is due to be sentenced on December 7th. “The effects of Holmes and Balwani’s fraudulent practices were far-reaching and severe. “Dozens of investors have lost more than $700 million, and numerous patients have received unreliable or completely inaccurate medical information from Theranos’ flawed tests, putting their patients’ health at serious risk.” Over 100 people wrote to Davila in support of Holmes, asking for leniency in her judgment. The list includes Holmes’ partner Billy Evans, many members of the Holmes and Evans families, early Theranos investor Tim Draper, and Sen. Corey Booker. Booker explained that he met her at her dinner a few years prior to her indictment and bonded over the fact that they were both vegan and had nothing to eat but her bag of almonds. Booker continued to consider her one of her favorites, saying “I still believe she has her hope that she can contribute to the lives of others and despite her mistakes, she can make her world a better place.” He said he thought of me as a friend. Ahead of the hearing, there were also questions about how Holmes’ sentencing might be complicated by the developments in her life after stepping down from Theranos. Holmes and her partner Evans, who met in 2017, have a young son. Holmes is also pregnant, as confirmed through recent court documents and a court appearance in mid-October. White-collar defense attorney and former federal prosecutor Mark McDougall told CNN Business before the hearing that the fact that Holmes has young children could affect the way she is sentenced. “I don’t know how they can’t, because judges are human too,” he said. MacDougall also said he doesn’t see what a long prison sentence accomplishes. “Elizabeth Holmes will never run a big company again. “She will never be in a position for this to happen again.”

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