Theranos founder sentenced over 11 years in jail

Founder and the former Chief Executive Officer of Theranos, Elizabeth Holmes has been sentenced to 135 months – over 11 years – in prison, reports The Verge.

According the most recent updates, Holmes will have to report to prison on April 27, 2023 and will have additional three years of supervised release once she comes out.

Judge Edward Davila, who oversaw the case, declared the charges she was found guilty of made her responsible for defrauding 10 victims out of USD121 million according to The New York Times. Davila also noted Holmes refusal to accept responsibility for the fraud counted against her in the sentencing decision.

The court’s jury found Holmes guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud earlier in 2022. In the weeks leading up to Holmes’ sentencing, prosecutors asked Judge Davila to give her 15 years of prison time and pay victims over USD800 million in reparations. The government argued Holmes’ actions put patients¬† in harm’s way, as reported by the Wall Street Journal.

On the other hand, Holmes’ advocate filed an 82-page document arguing why her sentence should be reduced – emphasizing the sentence should be 18 months of house arrest and community service at most.

Theranos Inc was founded in 2003 by then 19-year old Holmes, claiming the company had devised blood tests that required small amounts of blood and could be performed rapidly and accurately, all via a compact automated device which the company had developed. The company attract heavy-hitting investors on this particular basis, raising more than USD700 million from venture capitalists and private investors that resulted in the company’s valuation hitting USD10 billion in 2013 and 2014.

But in 2015, when medical research professor John Ioannidis and later Eleftherios Diamandis along with investigative reporter John Carreyrou questioned the validity of Theranos’s technology. Following this the company was mired in a string of legal and commercial challenges from medical authorities, investors and even the US Securities and Exchange Commission (SEC) as well as Centers for Medicare and Medicaid Services (CMS).

By 2016 it was reported that Holmes’ net work evidently dropped from USD4.5 billion to virtually nothing. In the same year Theranos found itself battling against piling lawsuits while partners and others tied to the company started cutting ties, while US regulators banned Holmes from operating a blood-testing service for two years.

In 2018, Theranos was dissolved while in March of the same year Holmes settled civil charges from financial regulators, that she fraudulently raised USD700 million from investors. But three months to this and Holmes along with Sunny Balwani were arrested on criminal charges of wire fraud and conspiracy to commit wire fraud.

Meanwhile, her attorneys have maintained argument that Holmes should not face prison time on grounds that she did not pose danger to society. However, prosecutors argued that Holmes knowingly misled patients about the tests while vastly exaggerating the firm’s performance to investors.