Disgraced Theranos founder Elizabeth Holmes to arrive at prison on May 30 to begin her 11-year sentence
Disgraced founder and former Theranos CEO Elizabeth Holmes is finally heading to prison after her unsuccessful attempt to avoid incarceration. The U.S. District Judge ruled that must report to prison on May 30. Holmes was convicted of running a years-long fraud scheme at her blood-testing tech startup and found guilty on four of 11 charges.
On Wednesday, U.S. District Judge Edward Davila ordered Holmes to report no later than 2 p.m. local time on May 30, and she is expected to begin her sentence of more than 11 years at a minimum-security facility in Bryan, Texas.
During an earlier hearing, Judge Davila said that Theranos was dashed “by misrepresentations, hubris, and just plain lies.”
“This case is so troubling on so many levels,” he said. “What was it that caused Ms. Holmes to make the decisions she did? Was there a loss of a moral compass?”
Prosecutors in the case were seeking a 15-year prison sentence, a three-year supervised release, and more than $800 million in restitution. But her legal team asked the judge for a lighter sentence of no more than 18 months, preferably served in home confinement. She got 11 years instead. During the hearing, Holmes said: “I Am Devastated. I regret my failings with every cell of my body.”
On Tuesday, the appeals court delivered a blow to Elizabeth Holmes’ efforts to remain free during her appeal of the conviction by rejecting her request. Additionally, in a separate ruling on the same day, Judge Davila ordered both Holmes and former Theranos executive Ramesh “Sunny” Balwani to pay a staggering $452 million in restitution to the victims.
We’ve been following the story of Theranos for three years now. Once called the next Steve Jobs, Holmes founded Theranos in 2003. Initially, the Silicon Valley-based startup Theranos was touted as a breakthrough technology company, with claims of having devised blood tests that required only very small amounts of blood and could be performed very rapidly using its newly developed blood testing technology.
Then in March 2018, its founder, the then 36-year-old Elizabeth Holmes, was convicted of investor fraud after a series of Wall Street Journal (WSJ) articles revealed the tests Theranos claimed to be doing were actually being carried out by traditional machines purchased from other companies.
Holmes dropped out of Stanford University in 2003 to start Theranos. She later used her parents’ education trust to found the company that would later be called Theranos. The company’s name was derived from a combination of the words “therapy” and “diagnosis.” The company’s original name was “Real-Time Cures,” which she later changed after deciding that too many people were dubious about the word “cure.” At its peak, Theranos was valued at $10 billion and made Holmes a Silicon Valley star at the age of 19.
In March 2020, we wrote about Theranos after the Securities and Exchange Commission (SEC) accused Theranos founder Elizabeth Holmes and former Theranos President Ramesh “Sunny” Balwani of defrauding investors of more than $700 million through false claims about its technology. In a separate report, the SEC also said Elizabeth Holmes exaggerated the company’s revenue by 1,000 times to investors, says SEC.