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Elizabeth Holmes sentenced to more than 11 years in prison for fraud Theranos According to Reuters


© Reuters. FILE PHOTO: Elizabeth Holmes, founder of Theranos, and family leave federal court after attending her fraud trial in San Jose, California, U.S. January 3, 2022. REUTERS/Brittany Hosea- Small/File Photo

By Jody Godoy and Dan Levine

SAN JOSE, Calif. (Reuters) – A California judge has sentenced Theranos founder Elizabeth Holmes to 11 years and three months in prison for defrauding investors in her now-defunct blood-testing startup once valued. 9 billion USD.

U.S. District Judge Edward Davila in San Jose, California, convicted Holmes of three counts of investor fraud and one count of conspiracy. The jury convicted Holmes, 38, in January after a three-month trial.

Holmes, wearing a dark blouse and black skirt, hugged her parents and partner after the verdict was delivered.

During the hearing, Holmes wept as she said she was “broken down” by her failures and would have done a lot differently if given the chance.

“I feel deeply ashamed of what people went through because I let them down,” she said.

Before sentencing, Davila called the case “trouble on many levels”, questioning the motives of Holmes, an “excellent” businessman, misrepresenting her company to investors. .

“This is a scam in which an interesting venture was conducted with great expectations only to be shattered by dishonesty, misrepresentation, arrogance and lies,” he said.

The judge set a date for Holmes’ surrender in April. Her lawyers are expected to ask the judge to allow her to be released on bail during the appeal period.

Assistant U.S. Attorney Jeff Schenk told the judge before sentencing that the 15-year sentence would be “a statement that the end does not justify the means.”

Holmes’ lawyer Kevin Downey, seeking to keep Holmes at home, said leniency was justified because unlike someone who committed a “major crime”, she was not motivated by greed.

The federal probation office recommended a nine-year prison sentence, according to court documents.

Prosecutors and Holmes’ attorneys declined to comment as they left court.

Prosecutors said at the trial that Holmes misrepresented Theranos’ technology and finances, including claiming that its miniature blood-testing machine could perform a wide range of tests from one few drops of blood. Prosecutors said the company secretly relied on conventional machines from other companies to conduct tests on patients.

Holmes testified in her own defense, saying she believed her statements were accurate at the time.

Despite being convicted on four counts, Holmes was acquitted of four more counts of defrauding patients into paying for Theranos tests.

Once valued at $9 billion, Theranos Inc promises to revolutionize the way patients receive diagnoses by replacing traditional labs with tiny machines envisioned for use in homes, pharmacies and even on the battlefield.

Forbes named Holmes the world’s youngest self-made female billionaire in 2014, when she was 30 years old and her stake in Theranos was worth $4.5 billion.

But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned its technology.

Holmes is expected to challenge her conviction and Davila’s rulings uphold her conviction in the 9th U.S. Circuit Court of Appeals.

Before sentencing, Davila asked if any of Holmes’ victims were present in court.

Alex Shultz, whose son Tyler Shultz works at Theranos and whose father, former US Secretary of State George Shultz, has invested in the company, told the judge that a family member had heard Holmes describe it. Her technology is said to be revolutionary.

“What’s the matter?” asked Holmes, a family member,

according to Shultz.

“No problem,” replied Holmes.



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