Theranos founder Elizabeth Holmes sentenced to 11 years in prison

Judge Edward Davila told the heavily pregnant former Theranos boss: ‘Failure is normal. But failure by fraud is not OK’

Elizabeth Holmes has been sentenced to 11 years and three months in prison for defrauding investors in her blood testing startup Theranos.

Judge Edward Davila imposed a sentence of 135 months in prison, to be followed by three years of supervised release.

A tearful Holmes, who is heavily pregnant with her second child, hugged her husband Billy Evans after the sentence was read out.

Earlier, she apologised for her role in the collapse of the Silicon Valley firm – the first time she has admitted responsibility.

“I am devastated by my failings. I have felt deep pain for what people went through, because I failed them,” Holmes said.

Holmes was convicted in January of three felony counts of wire fraud and one felony count of conspiracy to commit fraud for enticing investors to pump hundreds of millions of dollars into Theranos.

The start-up had claimed its Edison machine could scan for hundreds of diseases and other aliments with just a few drops of blood. But the much-hyped technology never worked.

Prosecutor Jeff Schenk said the Theranos founder craved media attention and a lavish lifestyle and called on the judge to impose a lengthy sentence as a deterrent to others. “The attention desired by Ms Holmes fuelled the fraud,” he told the court.

Defence attorney Kevin Downey said Holmes had “good intentions” and there was no evidence that she had been driven by greed.

“Year in and year out, Elizabeth Holmes had the opportunity to become a very wealthy woman,” he said.

“Hundreds of millions of dollars. Year after year, she declined the offers.” She was “let down by her support network”, Mr Downey said.

Former Theranos CEO Elizabeth Holmes, centre, arrives at federal court with her partner Billy Evans, right, and mother Noel Holmes on Friday (Getty Images)

Prosecutors had asked the judge to sentence the 38-year-old to 15 years in prison and to pay $800m in restitution for defrauding investors.

Her lawyers argued that Holmes deserves more lenient treatment as a well-meaning entrepreneur who is now a devoted mother with another child on the way.

Senator Cory Booker wrote a letter calling for leniency in the sentencing of Elizabeth Holmes (Holmes sentencing memorandum)

Judge Davila described the case as “so troubling on so many levels”.

“The tragedy of this case is Ms Holmes is brilliant, she had creative ideas. She's a big thinker.

“She was moving into an industry that was dominated by, let's face it, male ego,” Judge Davila told the court, according to Mercury News reporter Ethan Baron. “Failure is normal. But failure by fraud is not OK.”

He ordered Holmes to surrender to corrections officials in April — after she has given birth to her second child.

Holmes founded Theranos aged 19 in 2003 after dropping out of Stanford University. She said a fear of needles had led her to invent the Edison blood-testing machine.

The company quickly attracted high-profile investors including Larry Ellison, Rupert Murdoch and the DeVos family, and was valued at $9bn at its peak.

Although evidence submitted during her trial showed the blood tests produced wildly unreliable results that could have steered patients toward the wrong treatments, Holmes claimed she didn’t stop trying to perfect the technology until Theranos collapsed in 2018.

New Jersey Senator Cory Booker was among 140 friends, family and supporters who asked Judge Davila for leniency.

The court was packed with dozens of supporters. Holmes’s husband Billy Evans and parents Christian and Noel Holmes accompanied her into the courtroom.

Holmes’s lawyers have cast her as a scapegoat who overcame a toxic relationship with Theranos COO Ramesh “Sunny” Balwani to become a loving mother.

They have argued that sending Holmes to prison was “unnecessary” and asked for an 18 month period of home incarceration.

Judge Davila said he was basing the sentence on 10 investors losing $121m.

Alex Schultz, the father of whistleblower Tyler Schultz, read a victim impact statement to say that Holmes had taken a “wrecking ball” to his family.

He looked directly at Holmes as he said Mr Schultz had feared for his life after she hired private investigators to pry into his life.

“My son slept with a knife under his pillow every night thinking somebody was going to come and murder him.”

A tearful Holmes stood to address Judge Davila, where she took responsibility for Theranos’ collapse. “I regret my failings with every cell of my body.”