News That Matters

Elizabeth Holmes sentenced to 11 years for Theranos fraud

Deposed Theranos CEO Elizabeth Holmes was sentenced to 11 years and three months behind bars on Friday, capping a years-long saga that captivated the technology world and closing a chapter on one of the most spectacular corporate flameouts in U.S. history.

Federal Judge Edward Davila imposed the sentence after an unusual hearing that stretched over four hours in which prosecutors argued with Holmes’ lawyers about her motives, investor losses and her degree of remorse.

The sentence is likely to send a message to other high-flying technology startups about the risks of deceiving customers and investors, though it fell short of the 15 years prosecutors had sought.  Holmes is also set to serve three years of supervised release after her prison time.

Davila also said he will determine at a later date how much money Holmes must repay to defrauded investors, if any. Prosecutors had sought $804 million in repayment to investors who they said lost “everything.”

In January, a jury convicted Holmes of four counts of fraud and conspiracy for her claims about Theranos, the blood-testing startup she launched in 2003. 

At its peak, Theranos was valued at $10 billion and boasted luminaries including Larry Ellison and Rupert Murdoch as investors. However, a series of exposes by the Wall Street Journal, followed by multiple investigations by federal and state officials, revealed that Holmes had vastly overstated her technology’s capabilities.

Holmes, 38, gave birth to her first child last year and is currently pregnant with her second.

Theranos’ Chief Operating Officer, Ramesh “Sunny” Balwani, was convicted of 12 counts of fraud and is set to be sentenced Dec. 7.

This is a developing story. The Associated Press contributed reporting.

Source link