Holmes was found guilty of misleading Theranos investors about the company’s technology and financial health.
Elizabeth Holmes, the founder and CEO of failed blood-testing company Theranos, has been sentenced to 11 years and 3 months in federal prison for her role in committing a years-long fraud that saw her company ascend to the heights of Silicon Valley before collapsing in disgrace.
Holmes was convicted in January of four counts of lying to Theranos investors about the company’s technology and its financial health. She faced a potential maximum of 20 years in prison.
The judge ordered Holmes to surrender to authorities on April 27, 2023.
The sentence closes one chapter of the Theranos saga, in which the failed blood-testing company came to be valued at as much as $9 billion before it collapsed in scandal and fraud.
Founded in 2003 by Holmes, then a student at Stanford University, Theranos managed to grow rapidly, thanks in part to unchecked hype and the charisma of its creator. Holmes successfully pitched investors and influential members of society, including two former senators and former Secretary of State Henry Kissinger, who became board members, that Theranos' technology could use a drop of blood to instantly test for a host of medical conditions.
During Holmes’ trial, former employees testified that Theranos would also frequently delete erroneous results from its tests to make its machines appear more accurate. Theranos executives also submitted falsified company reports, including some showing inflated revenues and one in which Holmes added the logos of major drugmakers that were not actually associated with the company. The company also lied to investors about having its technology deployed in Afghanistan.
“She chose fraud over business failure. She chose to be dishonest,” lead federal prosecutor Jeff Schenk said in his closing argument. “That choice was not only callous; it was criminal.”
Holmes pleaded not guilty. Her defense centered on allegations against Ramesh “Sunny” Balwani, the former Theranos president and chief operating officer with whom she had a romantic relationship. Balwani was convicted of fraud in July. Holmes said Balwani lied to her about the company's financial models and subjected her to intimate partner abuse.
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