Theranos founder Elizabeth Holmes sentenced to 11+ years in prison
The founder and CEO of failed blood-testing start-up Theranos, Elizabeth Holmes, has been sentenced to 11 years and three months in prison for defrauding investors. The 38-year-old, once hailed as "the next Steve Jobs," is tipped to pay $800 million in damages to investors such as Rupert Murdoch and Walgreens. Holmes is now regarded as the poster child for Silicon Valley ambition gone wrong.
Why does this story matter?
- Holmes's conviction serves as a moment of reckoning. In an arena where white-collar crimes often go unpunished, this is a welcome change indeed.
- Theranos proved to be a sinking ship for all. Holmes's co-conspirator, Ramesh "Sunny" Balwani, who was found guilty of 12 counts of fraud and conspiracy, will be sentenced on December 7.
- The blind devotion toward charismatic individuals needs to be stopped.
A look at Holmes and Theranos's history
Holmes, a Stanford University dropout, ran Theranos, once valued at $9 billion. She claimed to have perfected a portable medical device that could identify multiple diseases from a few drops of blood. Her claims drew in investors like Larry Ellison, Murdoch, and Walmart's Walton family. US government officials James Mattis and Henry Kissinger served as board members of her company.
What legal steps were taken against her?
An investigation by The Wall Street Journal in 2015 proved Holmes's claims to be phony, and she was convicted on four felony charges. US federal prosecutors were seeking 15 years behind bars for her, while her defense team urged for an 18-month maximum sentence, possibly under home confinement. Finally, she was awarded a 135-month sentence. Her prison time will begin on April 27, 2023.
'Holmes's conviction reflects her audacity of fraud'
Following the decision by a courtroom in San Jose, California, the prosecution put out a statement. "For almost a decade, Elizabeth Holmes fabricated and spread elaborate falsehoods...her deceit caused the loss of hundreds of millions of dollars." Meanwhile, US attorney Stephanie Hinds claimed that Holmes's conviction "reflects the audacity of her massive fraud and the staggering damage she caused."
Holmes might appeal her conviction
Meanwhile, on account of her pregnancy, Holmes's legal team might appeal her conviction. However, it is unclear how she would pay $800 million in restitution to investors. Prosecutors continue to claim that she was aware that her blood-testing device was fraudulent. Yet, she lured investors.