Elizabeth Holmes Sentenced To 11 Years In Prison For Theranos Fraud
Elizabeth Holmes, the former CEO of blood-testing startup Theranos once seen as a Silicon Valley star, was sentenced on Friday to more than 11 years in prison after being convicted of fraud earlier this year.
U.S. District Judge Edward Davila handed down the sentence in a federal courthouse in San Jose, Calif. He directed Holmes to spend three years under supervised release after completing her sentence.
Prosecutors asked for Holmes to serve 15 years behind bars, citing the whopping financial loss and the need to deter future fraudulent schemes in the tech industry. Her defense lawyers had sought home confinement.
Holmes, 38, who is pregnant with her second child, will start her sentence in April.
In January, a jury convicted Holmes on four wire fraud-related counts for her role in deceiving investors about a supposedly groundbreaking technology that could scan for hundreds of conditions with just a few drops of blood. It is a feat laboratory scientists around the world for years have tried to accomplish, but Holmes, a Stanford dropout, claimed she had perfected it.
She drummed up nearly $1 billion in investment based on the premise that her proprietary blood-testing devices would revolutionize health care, but prosecutors argued during the trial that Holmes fudged test results, flagrantly lied about the capabilities of her tests and tried to cover it up when whistleblowers and journalists began drew scrutiny to what was really going on at the company.
It is nearly unheard of in Silicon Valley for an executive to face criminal prosecution in the wake of a business collapse. But legal experts said the egregiousness of Holmes' crimes, and the fact that she was operating in the highly-regulated health care world, made the Theranos case exceptional.
Still, Holmes' prosecution stirred debate in tech circles about possible sexism, with some wondering why men who led tech startups that failed after unrealized promises have never faced criminal charges.
There appears to be more scrutiny on high-flying tech startups now, however. The Justice Department is reportedly investigating the now-bankrupt FTX, an exchange for trading crypto. Its recent implosion wiped out former CEO Sam Bankman-Fried's wealth of $16 billion, which Bloomberg called "one of history's greatest-ever destructions of wealth."
Federal investigators are probing the unwinding of the company, with the specter of possible criminal charges being discussed among legal experts.
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