Theranos founder, Elizabeth Holmes, sentenced to 11+ years in prison for fraud

Emily Roy

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Elizabeth Holmes, founder and former CEO of Theranos, arrives for motion hearing in San Jose, Calif.Photo by(Photo by Yichuan Cao/NurPhoto via Getty Images)

SAN JOSE, Calif. — Elizabeth Holmes, the founder of the failed blood-testing start-up, Theranos, was sentenced to 11.5 years in prison on Friday for defrauding investors about her company’s technology and business dealings.

The sentence topped a year long chronicle that has captivated the public and ignited debates about Silicon Valley’s culture of hype and exaggeration. Ms. Holmes, who raised $945 million for Theranos and promised that the start-up would revolutionize health care with tests that required just a few drops of blood, was convicted in January of four counts of wire fraud for deceiving investors with those claims, which turned out not to be true. Holmes came up with a ground-breaking idea and never implemented it, but lied and said that she did. The whole thing was a lie.

Judge Edward J. Davila of the U.S. District Court for the Northern District of California sentenced Ms. Holmes to 135 months in prison, which is slightly more than 11 years, followed by three years of supervised release. Ms. Holmes, 38, plans to appeal the verdict and must surrender to custody on April 27, 2023.

On Friday, Ms. Holmes — who appeared in court with a large group of friends and family, including her parents and her partner— cried when she read a statement to the judge.

“I am devastated by my failings,” she said. “I have felt deep pain for what people went through because I failed them.”

Ms. Holmes, who has a one-year-old son and is pregnant with her second child, apologized to the investors, patients and employees of Theranos, stating that she had tried to realize her dream too quickly. She ended with a quotation from the poet Rumi and a promise to do good in the world in the future.

Few start-up founders reached the level of prominence that she did, appearing on magazine covers, dining at the White House, and achieving a net worth of $4.5 billion almost overnight.

Kevin Downey, a lawyer for Ms. Holmes, said that because she had never cashed out her Theranos stock, there was no evidence of greed, like yachts, planes, large mansions and parties.

“We have a conviction for a crime where the defendant’s motive was to build technology,” he said.

Asking for leniency, Ms. Holmes submitted more than 100 letters of support from figures including Stanford professors, venture capital investors and Senator Cory Booker, Democrat of New Jersey, which painted her as a virtuous person who was a victim of circumstances.

“Much has been written in the media and addressed in the trial about the company and its failure,” Christian Holmes, her father, wrote in one letter. “Little has been said about the innovation Elizabeth strived for, sacrificed and accomplished in order to help the company continue.”

Ms. Holmes will be assigned to a prison by the Federal Bureau of Prisons based on factors such as location, space, her lack of criminal history and the nonviolent nature of her crime. The minimum security prison nearest to Ms. Holmes’s residence in Woodside, Calif., is likely the Federal Correctional Institution in Dublin.

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