Ex-Theranos CEO Elizabeth Holmes Convicted of Fraud, Sentenced to 11 Years
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Elizabeth Holmes, the former CEO of Theranos Inc., will serve 11 years in prison on four counts of fraud, according to her sentencing by a federal judge in a California courtroom Friday afternoon.
In January, Holmes was found guilty on three counts of wire fraud and one count of conspiracy to commit wire fraud and conspiracy of bilking investors out of hundreds of millions of dollars to finance her blood testing company.
Prior to sentencing, the prosecution and Holmes’ attorneys made last-minute sentencing pitches. The prosecution called for a stiff sentence, urging the judge to sentence her to 15 years in prison for her crimes. They also called for Holmes to pay nearly $1 billion in restitution to the investors who propped up Theranos.
She was found guilty of defrauding investors of about $803 million in total.
Her defense team, on the other hand, said the judge should show lenience. They argued that she took responsibility for the crimes committed while she was CEO. The defense team also reminded the judge that Holmes was not found guilty of committing fraud against patients, California station KRON reported.
The Case Against Holmes
In 2016, Theranos invalidated results from thousands of tests it had conducted through a partnership with Walgreens, which prompted several lawsuits from patients who used the false results to schedule medical procedures. But in January, the jury concluded Holmes was not guilty of allegations of patient fraud related to false test results that had been sent to the company.
During the trial, Theranos whistleblowers testified about data manipulation conducted by the company. As BioSpace previously reported, Erika Cheung, a former Theranos lab worker, testified the company manipulated data in order to pass quality control.
Cheung testified that Theranos employees would delete up to two of six data points in a test in order to achieve the desired result.
Other whistleblowers testified about concerns over the veracity and efficacy of the Theranos blood-testing system. The trial also showed Theranos included logos from Pfizer and Schering-Plough (now part of Merck) in reports it sent to investors. The inclusion of those logos made it appear as if the established pharmaceutical companies had validated the Theranos data.
Throughout her testimony in January, Holmes admitted to mistakes she made while at the helm of the company. She also cast blame on her former business partner and lover Ramesh “Sunny” Balwani, who she claimed abused her. In July, Balwani was found guilty of 12 fraud charges brought against him.
In 2018, Balwani and Holmes were charged with multiple counts of wire fraud and conspiracy to commit fraud. The government charged the duo with engaging in a multi-million dollar scheme to defraud company investors
In a brief speech to the court Friday afternoon, Holmes thanked the court for the respect it showed her throughout the trial and said she took responsibility for what happened at Theranos.
“I loved Theranos. It was my life’s work. My team meant the world to me," she said. "They worked tirelessly. Every day I have felt deep pain for what people went through because I failed them.
"I am so, so sorry. I gave everything I had to building and trying to save our company. Looking back, there are so many things I would do differently if I had the chance," she continued.
Holmes will begin her prison term on April 27, according to ABC.