Former US blood test entrepreneur Elizabeth Holmes has been sentenced to 135 months, or 11 years and three months, in prison for fraudulently building her biotech start-up Theranos into a $9 billion company , which had to file for bankruptcy after the scandal. The pregnant 38-year-old does not have to start her prison sentence before April 27 next year.
The sentence, handed down Friday by US District Judge Edward Davila in San Jose, California, is far closer to the 15-year sentence prosecutors were asking for than what Holmes’ lawyers had requested – a maximum of 18 months in prison or house arrest.
The conviction concludes a year-long story that has gripped Silicon Valley and inspired books, TV documentaries, podcasts and films about the Stanford University dropout who rose to become a prominent entrepreneur at the age of just 19: the company pitched with her a supposedly revolutionary technology for particularly fast, effective and inexpensive blood tests. The charismatic young entrepreneur was celebrated as a tech pioneer and won financially strong investors and prominent supporters. However, their technology was eventually exposed as a scam, leading to the collapse of the company.
The pregnant Holmes appeared in court in a black dress and coat, sitting upright in her chair next to her solicitors. When she heard her sentence, she got up to hug her parents, who were sitting behind her in the front row of the courtroom. Before the verdict was announced, she wept in a speech in the courtroom, apologizing to victims and investors and saying she took full responsibility for Theranos – but without admitting guilt.
“I’m devastated by my failure,” said Holmes. “Looking back there are so many things I would do differently if I had the chance. I was trying too quickly to achieve my dream.”
A jury convicted Holmes in January of four counts of fraud and conspiracy after prosecutors presented evidence and testimony that they knew the blood-testing equipment, which they touted as revolutionary to venture capitalists and wealthy investors, didn’t actually work.
The judge said he would deal with restitution to the victims at a later date. The government has proposed ordering Holmes to pay $800 million to investors who lost money to Theranos. Her lawyers said she had “essentially no assets.”
The charges on which Holmes was convicted carried a maximum sentence of 20 years in prison. Despite evidence presented by the government that thousands of consumers who paid for Theranos tests received inaccurate results, she was found not guilty on all charges of defrauding patients.
“The tragedy of this case is that Ms. Holmes is brilliant” and has thrived in a male-dominated industry, the judge said. He added that while failures are not uncommon in Silicon Valley, Holmes’ fraud case was based on “misrepresentations, hubris and outright lies.”
The prosecution had argued that a long prison sentence was justified. given the scale of the scam and the need to send a chilling message to the startup industry where “fake it til you make it” bragging is rampant.