Despite her best efforts, Elizabeth Holmes will spend the next decade-plus behind bars. On Friday, a judge sentenced the Theranos founder to 11 years and 3 months in prison, plus three years of supervised release. Judge Edward J. Davila of California’s Northern District said he believed it was Holmes’ hubris and intoxication with fame that led her to defraud investors of more than $100 million.
The founder of the failed blood testing start-up Theranos promised to revolutionize healthcare, but a jury found she lied to investors about the company’s capabilities in pursuit of money and fame. Her case has come to represent the dark side of Silicon Valley’s hustle culture and “fake it till you make it” ethos.
Since being found guilty in January of lying to investors to raise money for her blood-testing startup Theranos, Holmes, 38, spent much of the intervening time pushing for a new trial, then begging to not have to go to jail. Amid failed requests for new trials, her sentencing got rescheduled twice.
Days before the sentencing, Holmes’ defense filed an 82-page sentencing memo, requesting zero jail time for Holmes – just 18 months of home confinement. The filing includes letters of support from more than 130 of Holmes’ friends, relatives, and former coworkers and investors outlining her volunteer work, her reliability as a friend and her “deep interest in making the world a better place.” A letter from Holmes’ partner, hotel heir Billy Evans, confirmed what seemed visibly apparent at Holmes’ most recent court appearance – that she is pregnant with her second child. Prosecutors requested 15 years in prison and an $804 million fine.
Many founders make questionable maneuvers in a bid for success – see WeWork’s botched initial public offering and Uber’s aggressive workplace culture. But Holmes is one of the few executives to be charged, let alone convicted of wrongdoing. In fact, it’s hard to think of another #girlboss of her standing who has done time since Martha Stewart, who went to prison in 2004 for insider trading.
Modeling herself after Apple founder Steve Jobs, down to black turtlenecks and a bizarre, husky vocal register, Holmes took the tech scene by storm when she founded Theranos in 2003 at just 19 years old. Fearful of having her own blood drawn at doctors’ visits, Holmes claimed she’d invented the technology to detect a wide variety of ailments in a few drops of blood gathered from a finger prick. She lured big-time investors including Rupert Murdoch and Henry Kissinger and was lauded as the world’s youngest woman billionaire.
But the technology was not reliable, the Wall Street Journal first reported in 2015. It couldn’t accurately perform as many tests as Holmes had said it could. Instead of backing down, prosecutors argued, Holmes pressed ahead. “She chose fraud over business failure,” Assistant U.S. Attorney Jeffrey Schenk said during closing statements. The state presented evidence that Holmes had created bogus reports, faked demonstrations, drafted misleading contracts, and overstated financials. . Theranos shut down amid investigations in 2018, the same year Holmes was indicted on charges that she’d deceived investors, doctors, and patients to make money for the company.
During the trial, which lasted more than three months, spectators waited in pre-dawn lines for a chance to sit in on the proceedings. This included self-described “fans,” blonde women who came dressed like Holmes in dark suits. Witnesses included former defense secretary James Mattis, who had served on Theranos’ board. On the stand, Holmes alternated between accepting responsibility and blaming other people at the company for Theranos’s failures. As part of her defense, she also accused Ramesh “Sunny” Balwani, the company’s chief operating officer and her former boyfriend, of abusing her. The trial revealed cringey texts between the two of them, where they called each other pet names like tiger and tigress. (In a separate trial, Balwani, 57, was convicted on all 12 fraud charges brought against him for his role at the company. He faces sentencing in December.)
In January, on the seventh day of deliberations, a San Jose jury convicted Holmes of one count of conspiracy to commit wire fraud by lying to investors to raise money for her company and three counts of wire fraud, including wire transfers totaling more than $140 million. The convictions did not include charges that she’d deceived doctors and patients.
Each count carried a maximum penalty of 20 years in prison, and Holmes got to work trying to change her fate. She filed three requests for a new trial based on new evidence. In the most recent claim, she pointed to an August visit to her home by former lab director and key prosecution witness Dr. Adam Rosendorff, who expressed anguish at her circumstances, but did not recant his testimony, as Holmes’ team tried to suggest he did. Last week, the judge denied Holmes’ requests, saying they didn’t meet the bar for a new trial.