Elizabeth Holmes sentenced to more than 11 years in prison for Theranos fraud

SAN JOSE, Calif., Nov 18 (Reuters) – A California decide sentenced Theranos founder Elizabeth Holmes to 11 years and three months in prison for defrauding buyers in her now-defunct blood testing startup that was as soon as valued at $9 billion.

U.S. District Judge Edward Davila in San Jose, Calif., sentenced Holmes on three counts of investor fraud and one rely of conspiracy. A jury convicted Holmes, 38, in January following a trial that spanned three months.

Holmes, dressed in a darkish shirt and black skirt, hugged her dad and mom and her companion after the sentence was handed down.

During the listening to, Holmes cried as she mentioned she was “devastated” by her failures and would have finished many issues otherwise if she had the prospect.

“I have felt deep shame for what people went through because I failed them,” she mentioned.

Before handing down the sentence, Davila referred to as the case “troubling on so many levels,” questioning what motivated Holmes, a “brilliant” entrepreneur, to misrepresent her firm to buyers.

“This is a fraud case where an exciting venture went forward with great expectations only to be dashed by untruths, misrepresentations, plain hubris and lies,” he mentioned.

The decide set Holmes’ give up date for April. Her legal professionals are anticipated to ask the decide to enable her to stay free on bail throughout her enchantment.

Assistant U.S. Attorney Jeff Schenk informed the decide earlier than he handed down the sentence {that a} 15-year sentence can be “making a statement that the ends don’t justify the means.”

Holmes’ legal professional Kevin Downey sought residence confinement for Holmes, saying leniency was justified as a result of in contrast to somebody who dedicated a “great crime” she was not motivated by greed.

The federal probation workplace had really useful a 9-year prison sentence, in accordance to courtroom papers.

Prosecutors and an legal professional for Holmes declined to remark as they left courtroom.

Prosecutors mentioned at trial that Holmes misrepresented Theranos’ know-how and funds, together with by claiming that its miniaturized blood testing machine was ready to run an array of checks from a number of drops of blood. The firm secretly relied on standard machines from different corporations to run sufferers’ checks, prosecutors mentioned.

Holmes testified in her personal protection, saying she believed her statements have been correct on the time.

(*11*)Though she was convicted on 4 counts, Holmes was acquitted on 4 different counts alleging she defrauded sufferers who paid for Theranos checks.

Once valued at $9 billion, Theranos Inc promised to revolutionize how sufferers obtain diagnoses by changing conventional labs with small machines envisioned for use in houses, drugstores and even on the battlefield.

Forbes dubbed Holmes the world’s youngest feminine self-made billionaire in 2014, when she was 30 and her stake in Theranos was price $4.5 billion.

But the startup collapsed after a collection of articles in the Wall Street Journal in 2015 questioned its know-how.

Holmes is predicted to problem her sentence and Davila’s rulings upholding her convictions on the ninth U.S. Circuit Court of Appeals.

Before handing down the sentence, Davila requested if any victims of Holmes’ fraud have been in courtroom.

Alex Shultz, whose son Tyler Shultz labored at Theranos and whose father, former U.S. Secretary of State George Shultz, invested in the corporate, informed the decide how a member of the family as soon as heard Holmes describe her supposedly revolutionary know-how.

“What’s the hitch?'” the member of the family requested Holmes,

in accordance to Shultz.

“There is no hitch,” Holmes responded.

Reporting by Jody Godoy in New York and Dan Levine in San Jose;
Editing by Noeleen Walder and Diane Craft

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