New Delhi: Theranos CEO Elizabeth Holmes on Friday was sentenced to just over 11 years in prison for defrauding her investors, according to AFP. In January, Holmes was convicted on four counts of investor fraud and conspiracy.
Holmes had persuaded her investors for over 15 years that she had developed a revolutionary medical device that could scan an array of health problems with just a few drops of blood. But the technology never worked, and the claims were false.
Holmes’s sentencing is less than what the US federal prosecutors sought, which was a 15-year jail term and around $800 million in restitution to investors. However, US District Judge Edward Davila left that question for a future hearing that has not been scheduled, AP reported.
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Theranos was dashed “by misrepresentations, hubris and just plain lies”, the judge was quoted as saying by AP. “This case is so troubling on so many levels,” Davila said. “What was it that caused Ms. Holmes to make the decisions she did? Was there a loss of a moral compass?”
Holmes tearfully apologised in the courtroom in San Jose, California, and told the judge she accepted responsibility for her actions.
“I regret my failings with every cell of my body,” Holmes said. She promised the judge that she will spend the rest of her life trying to help others, AP reported.
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Holmes’ attorney, Kevin Downey, indicated she would appeal the sentence. The legal team had asked for leniency, presenting her as a well-meaning entrepreneur and a devoted mother with another child on the way. Their arguments were backed by 140 letters sent by family, friends, former colleagues, and a US senator.
According to AP, Davila stated that the letters might have struck a different tone had the writers seen and heard all the evidence shown to the jury.
Holmes, however, doesn’t have to surrender until April next year, which should enable her to give birth to her second child before she is incarcerated. She had her first child shortly before her trial.
Elizabeth Holmes became an overnight Silicon Valley star to her investors — including media mogul Rupert Murdoch, the Walton family of Walmart, and the Walgreens chain of pharmacies — she sold the idea that her invention would replace expensive lab tests with cheap kits.
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At one point, the Theranos board included former US defence secretary James Mattis and former US Secretaries of State Henry Kissinger and the late George Shultz.
In October 2015, The Wall Street Journal published a series of articles that exposed the flaws in the Theranos technology and triggered government investigations that led to the company’s fall. Holmes’s quick rise and fall became a cautionary tale and inspiration for several books, TV series and movies.