Updated Nov 18, 2022 - Economy

Elizabeth Holmes sentenced to 11 years in prison for Theranos fraud

Photo illustration of Elizabeth Holmes frowning.

Photo illustration: Aïda Amer. Photo: Justin Sullivan/Getty Images

Elizabeth Holmes on Friday was sentenced by a California judge to 11 years and three months in prison for defrauding investors in her failed blood-testing company, Theranos.

Why it matters: This is the end of a years-long saga that saw the celebrated startup founder become a cautionary tale of Silicon Valley's "fake it 'til you make it" culture.

Flashback: Holmes in January was found guilty of four charges of wire fraud and conspiracy to commit wire fraud.

  • Theranos had raised around $1 billion from investors, including at a valuation of nearly $11 billion, from such backers as Rupert Murdoch, Tim Draper, Betsy DeVos, James Mattis, the Walton family and the Cox family.
  • The jury was unable to reach a verdict on three other charges involving investors. It didn't convict on charges related to advertising practices or Theranos patients, although the attorneys debated Friday whether or not the judge could take her conduct toward patients into account during sentencing.
  • Each guilty verdict carried a maximum sentence of 20 years in prison.

Background: Prosecutors had asked the judge for a 15-year sentence, while Holmes' defense attorneys had asked for 18 months of house arrest.

  • Prosecutors also asked for full restitution for what they claim was $804 million in investor losses tied to the guilty verdicts. But Judge Ed Davila lowered the applicable loss and said he'd hear more on restitution arguments in the future.
  • Holmes filed dozens of letters of support from family and friends, including one from Sen. Cory Booker (D-NJ).

What they're saying: "This case is so troubling on so many levels," Davila said, adding there's "no doubt" Holmes had the desire to make her company successful.

  • The judge also said it may have been hubris or “intoxication with fame” that led to Holmes’ conduct.

Holmes, through tears, read a speech in court saying, “I regret my failings with every cell of my body,” Law360 reports.

  • "Everday for the past few years I’ve felt deep pain,” she said, adding that she failed her workers, investors and the patients she sought to serve. “I gave everything I had to build our company.”

What's next: Holmes' former boyfriend and Theranos business partner Sunny Balwani in July was found guilty of 12 counts of conspiracy and fraud against certain investors and patients.

  • Balwani is expected to be sentenced on December 7, and his attorney was on hand Friday for Holmes' sentencing.

Editor's note: Cox Enterprises, which backed Theranos, is the parent company of Axios.

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