Elizabeth Holmes Sentenced To 11 Years In Prison For Theranos Fraud

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by Tyler Durden
Friday, Nov 18, 2022 - 10:21 PM

Update (1415ET): U.S. District Judge Edward Davila just sentenced Elizabeth Holmes, the criminal founder of Theranos convicted of fraud, to 135 months, or 11.25 years, in prison, capping the historic downfall of what the media and the Clinton Foundation unabashedly dubbed as a "one-time Silicon Valley wunderkind."

Prosecutors had asked the judge for a 15-year sentence, while Holmes' defense attorneys had asked for 18 months of house arrest.

Ms. Holmes has 14 days to appeal her conviction.

The judge ordered Ms. Holmes to surrender on April 27, 2023.

Judge Davila made clear that future deterrence was a big part of his rationale for the sentence.

He called the Theranos fraud “a cautionary tale” for Silicon Valley.

Additionally, the judge said the court would set a date in the future for a hearing on restitution, having said earlier in the day that he had found enough evidence to determine there were at least 10 investors in Theranos who were victims of fraud, and that the total sum they were defrauded was $121.1 million.

Elizabeth Holmes spoke briefly, and tearfully, to the court before the judge read her sentence. 

“I am devastated by my failings. Every day for the past years I have felt deep pain for what people went through because I failed them,” said Ms. Holmes.

We wonder if her voice at trial was the same fake baritone she used to scam the 'wisest' of investors...

Holmes' former boyfriend and Theranos business partner Sunny Balwani in July was found guilty of 12 counts of conspiracy and fraud against certain investors and patients. Balwani is expected to be sentenced on December 7, and his attorney was on hand Friday for Holmes' sentencing.

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While everyone is fixated on the disgraced founder of FTX, Sam Bankman-Fried, and his collapsed cryptocurrency exchange, another Silicon Valley fraudster, Theranos CEO Elizabeth Holmes, will be sentenced in a federal courthouse Friday, putting an end to the years-long saga of her phony blood-testing startup. 

Holmes' sentencing will take place in a San Jose, California, courtroom where she was convicted earlier this year of three felony counts of wire fraud and one count of conspiracy to commit wire fraud for scamming investors. 

Federal prosecutors wrote in court papers ahead of the sentencing hearing that Holmes' crimes are "among the most substantial white-collar offenses Silicon Valley, or any other district, has seen" (wait until SBF's court case...). 

AP noted US District Judge Edward Davila could sentence Holmes to federal prison for 15 years, slightly less than the federal government's recommendation of 20 years, though her lawyers filed a request to the judge last week for leniency in the sentencing and requested 18 months of home confinement instead of prison. 

The request was accompanied by letters calling for leniency from over 130 friends, family, and even Theranos investors, as well as former company employees who described Holmes as a 'good person.' 

One of those letters was penned by Sen. Cory Booker (D., NJ), who said Holmes "has within her a sincere desire to help others" by fighting climate change and world hunger.

"I knew Ms. Holmes for about six years before charges were brought," he continued. 

... and how convenient:

"Holmes, who is 38 years old, was visibly pregnant with her second child at her last court appearance. If Davila hands down a prison sentence, her pregnancy could influence when her confinement starts," NPR pointed out. 

Judge Davila has handled her case since the collapse of Theranos after reaching a valuation of $9 billion. Criminal defense lawyers recently told Bloomberg Holmes' sentencing could send a warning shot to Silicon Valley companies that run on hopes and dreams.