‘I failed them’: Tech fraudster Elizabeth Holmes sentenced to over 11 years in prison
Theranos founder Elizabeth Holmes sentenced to prison for defrauding investors who backed her failed blood testing company
A California federal court judge sentenced Theranos founder and convicted fraudster Elizabeth Holmes to 11.25 years in prison for bilking investors in efforts to prop up her failed blood testing tech startup.
How much restitution Holmes will have to pay will be determined at a separate hearing, but U.S. District Judge Edward Davila indicated that $121 million was a “reasonable total loss.”
Prosecutors were seeking a sentence of 15 years and $804 million in restitution while Holmes’ attorneys were hoping for probation or, at most, 18 months in jail. A pre-sentencing report from a California probation panel had suggested a nine-year sentence.
While an appeal could delay the start of Holmes’ prison sentence, previous efforts by her attorneys to have the case reheard have not been successful.
Holmes offered a tearful statement ahead of her sentence being handed down, according to tweets by Bay Area NBC-TV reporter Scott Budman who was in the courtroom on Friday.
“I stand before you taking responsibility for Theranos,” Holmes said. “It was my life’s work.”
“I am devastated by my failings. I have felt deep pain for what people went through, because I failed them. To investors, patients, I am sorry. I regret my failings with every cell of my body.”
Elizabeth Holmes: "I regret my failings with every cell of my body."— scott budman (@scottbudman) November 18, 2022
Quotes a poem: "Yesterday I tried to change the world. Today I'm wise, and want to change myself."
Holmes’ conviction and prison sentence provides a chilling cautionary message for a tech startup community that has long ascribed to the “fake it ’til you make it” approach to enticing investors as they work to bring new technology and innovations to market.
What is the Theranos case about?
Back in January, a federal jury convicted Holmes on four of 11 charges of fraud and conspiracy against investors who poured hundreds of millions of dollars into her blood testing startup that made claims that were never backed up by the technology.
Holmes launched the startup that would become Theranos in 2003 as a 19-year-old Stanford dropout, and it grew to attract over $1 billion in investor cash along with a slew of positive media coverage and high-level appearances for the founder.
At one point, Theranos was valued at $9 billion and Holmes’ stake in the company made her a multibillionaire at the time. That valuation and the related attention were driven by Theranos’ claims that it was innovating a new, high-tech blood testing system that would be able to perform dozens of different types of blood tests from a single pin-prick sample.
The device would eventually be put into use, but it was later revealed that those claims were spurious. The system could only do a handful of tests and the company covertly used testing equipment made by other companies for assessments that its own innovation could not accurately perform.
The high-profile trial came years after Wall Street Journal reporter John Carreyrou unveiled in a series of articles published in 2015 and 2016 that the reality of Theranos blood testing technology fell far short of claims made by Holmes and her onetime boyfriend, Sunny Balwani, who was also Theranos’ president and chief operating officer.
Holmes and Balwani were tried separately this year. Balwani was convicted on 12 counts of wire fraud and conspiracy in July. Balwani is due to be sentenced on Dec. 7.
Read, watch, listen: More about Elizabeth Holmes and Theranos
The meteoric rise and fall of Elizabeth Holmes and Theranos has spawned a slew of accountings, dramatized and otherwise, across platforms including books, podcasts, television shows and movies.
Here’s a few worth checking out:
“Bad Blood: Secrets and Lies in a Silicon Valley Startup” (book)
John Carreyrou is a two-time Pulitzer Prize winning reporter who leveraged his reporting for The Wall Street Journal on Theranos into an engaging book that became a national bestseller.
Here’s what The New York Times Book Review said: “Chilling ... Reads like a thriller ... Carreyrou tells (the Theranos story) virtually to perfection.”
“The Inventor: Out For Blood in Silicon Valley” (documentary)
In March, HBO premiered a documentary from Academy Award-winning director Alex Gibney that breaks down the rise and fall of Theranos.
According to the “Critics Consensus” on Rotten Tomatoes, the film “declines to outright condemn the actions by Theranos founder Elizabeth Holmes, but instead provides a comprehensive overview of the scandal that allows viewers to mull over its implications towards the broader Silicon Valley.”
“The Dropout” (podcast)
ABC News chief business, technology and economics correspondent Rebecca Jarvis, along with producers Taylor Dunn and Victoria Thompson, take listeners on a journey that includes a multiyear investigation.
“The Dropout” includes exclusive interviews with former employees, investors and patients, as well as never-before-aired deposition testimony of Elizabeth Holmes, and those at the center of this story, according to the producers. The podcast earned a 4.8/5 rating from the collective reviews on Great Pods.
“The Dropout” (TV show)
Inspired by the podcast of the same name and starring Amanda Seyfried as Elizabeth Holmes, Rolling Stone said the Hulu series is packed with great performances.
“Much more than most depictions of vast conspiracies, ‘The Dropout’ nails the ‘vastness,’ illustrating how a charismatic leader, even one as magnificently awkward as Holmes, could make people buy their snake oil and ignore increasingly unavoidable realities,” wrote Rolling Stone chief TV critic Daniel Fienberg.
“Bad Blood” (movie)
Still in production, Apple Studios is working on a movie adaptation of the Carreyrou book with direction by Adam McKay, who previously helmed the film adaption of Michael Lewis’ smash nonfiction bestseller, “The Big Short.”
No release date for “Bad Blood” has been made public at this time.
Correction: An earlier version cited that Jennifer Lawrence would play Elizabeth Holmes in the Apple Studios movie adaptation of “Bad Blood.” Lawrence was originally slated for the role but has since pulled out of the project.