Elizabeth Holmes Has Been Sentenced To More Than 11 Years In Prison For Defrauding Theranos Investors
Holmes, whose attempts to get a new trial were recently denied, is expected to appeal her conviction and her sentence. After learning her fate, Holmes cried as her friends and family surrounded her. She did not speak with reporters outside the courthouse after the hearing. In fact, a hearing attendee told BuzzFeed News he saw her and her partner flee the building out a side door to evade the scrum of cameras waiting for her.
Her ex-boyfriend Ramesh “Sunny” Balwani, who was Theranos’s president and chief operating officer, was convicted of 12 counts of wire fraud and conspiracy in July. Balwani is due to be sentenced next month.
Federal prosecutors had recommended that Holmes receive a 15-year prison sentence — six more than the nine years suggested by the US Probation Office — arguing that such punishment would “reflect the seriousness” of the offenses, deter her and others in Silicon Valley from engaging in similar criminal conduct, and protect the public from potential future crimes by Holmes.
“Holmes speaks eloquently about her desire to innovate and improve healthcare. She has demonstrated a strong work ethic, charisma, and ambition,” the government’s sentencing memo stated. “But she is blinded by that ambition. Her reality distortion field put, and will continue to put, people in harm’s way.”
In the filing, prosecutors noted that Holmes still has not taken responsibility for her crimes, continues to view herself as a victim, and is apparently working on new patents related to healthcare as they argued that a “sufficiently punitive” sentence was necessary to discourage her “from ever contemplating committing fraud again.” They also raised concerns that Holmes could become the officer of a public company in the future under her 2018 settlement with the Securities and Exchange Commission.
“This Court cannot be confident that Holmes has been deterred from future fraud,” prosecutors wrote.
And even though Holmes was acquitted of the charges involving Theranos patients, prosecutors urged the court to take into account her “lax attitude toward patient safety” and the fact that she forced patients to “unknowingly incur a risk of death or injury” by using her company’s faulty blood testing services. Davila ultimately chose not to use that as a factor in determining the sentence, agreeing with her attorneys that the evidence did not support such an enhancement.
The government is also seeking more than $800,000 in restitution, despite acknowledging she probably wouldn’t be able to pay it. According to the filing, a pre-sentencing report prepared by the probation office determined Holmes has “modest assets,” which are outweighed by $450,000 in loans for the settlement with the SEC and a liability for legal fees of more than $30 million. Davila indicated on Friday that he would not be counting “the full investment as losses,” suggesting that $121.1 million was more “reasonable” total loss to the investor victims he identified.
In Holmes’s response to the government’s memo, her attorneys called the worry about the eventual expiration of the SEC’s 10-year prohibition on her serving as a business executive “silly.” “As a practical matter, there is no reasonable possibility that Ms. Holmes will serve as an officer of a public company in the future,” they wrote.
Her attorneys slammed the government’s recommendation that she spend 15 years behind bars. The former CEO, whose spectacular rise and fall were chronicled in critical news pieces, podcasts, documentaries, and a hit Hulu series, is “punished every day,” they argued, and will be “for the rest of her life.”
The suggestion that Holmes’s interest in pursuing new patents warrants prison time was “extraordinary,” they said.
“Our Nation does not imprison individuals to keep them from inventing and thinking,” the filing stated. “Ms. Holmes has not been convicted of having bad ideas; to the contrary, her ideas had substantial value, are being pursued by others, and, as many of the letters have suggested, had the potential to make health care more accessible.”
Holmes, whose attempts to get a new trial were recently denied, is expected to appeal her conviction and her sentence. After learning her fate, Holmes cried as her friends and family surrounded her. She did not speak with reporters outside the courthouse after the hearing. In fact, a hearing attendee…
