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Judge sentences Elizabeth Holmes to over 11 years in prison

Theranos founder ordered to surrender to federal custody on April 27

Elizabeth Holmes, former CEO of Theranos, arrives at the federal courthouse in San Jose on Oct. 1, 2021. Courtesy Harika Maddala/Bay City News.

A federal judge sentenced Theranos founder and CEO Elizabeth Holmes to 11 years and three months in prison on Friday, citing the need for investors in Silicon Valley startups to be able to take "risks free from fraud."

U.S. District Judge Edward Davila ordered Holmes to surrender to federal custody on April 27, 2023, apparently taking into account the fact that Holmes is pregnant with her second child.

Holmes was convicted of four counts of wire fraud based on false and misleading statements she made to investors in Theranos, the now-defunct blood testing company that was based in Palo Alto.

She was acquitted of four counts of wire fraud related to tests given to actual patients. The jury did not reach a verdict on three remaining counts involving investors.

The sentencing on Friday capped a four-hour hearing during which prosecutors had pushed for a 15-year sentence. Holmes' lawyers requested a sentence of 18 months of home confinement.

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The packed courtroom heard an emotional appeal from Alex Shultz, son of the late George Shultz, a former Theranos board member, and father of Tyler Shultz, a Theranos employee who had tried to alert his grandfather to the concealment going on at the company and the defects in its blood-testing technology.

Holmes, Alex Shultz said, had "desecrated his family."

Holmes spoke last, telling the judge that she loved Theranos and that the company was her "life's work."

"I am so, so sorry," Holmes said. "In looking back there are so many things I would do differently if I had the chance."

She told the judge that going forward she just wants to contribute by helping "one person at a time."

Explaining his decision, Davila harkened back to the agricultural days of Silicon Valley, then talked about the change brought about when the area became known for its innovation.

"The world relies on us," Davila said. "This is a fraud case where an exciting venture went forward ... only to be dashed by misrepresentations, hubris and just plain lies."

Holmes' defense team told the judge that they plan to file papers asking that Holmes be allowed to remain free on bail until an appeal of the judgment is decided.

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Judge sentences Elizabeth Holmes to over 11 years in prison

Theranos founder ordered to surrender to federal custody on April 27

by Susan Nash / Bay City New Foundation /

Uploaded: Fri, Nov 18, 2022, 4:23 pm

A federal judge sentenced Theranos founder and CEO Elizabeth Holmes to 11 years and three months in prison on Friday, citing the need for investors in Silicon Valley startups to be able to take "risks free from fraud."

U.S. District Judge Edward Davila ordered Holmes to surrender to federal custody on April 27, 2023, apparently taking into account the fact that Holmes is pregnant with her second child.

Holmes was convicted of four counts of wire fraud based on false and misleading statements she made to investors in Theranos, the now-defunct blood testing company that was based in Palo Alto.

She was acquitted of four counts of wire fraud related to tests given to actual patients. The jury did not reach a verdict on three remaining counts involving investors.

The sentencing on Friday capped a four-hour hearing during which prosecutors had pushed for a 15-year sentence. Holmes' lawyers requested a sentence of 18 months of home confinement.

The packed courtroom heard an emotional appeal from Alex Shultz, son of the late George Shultz, a former Theranos board member, and father of Tyler Shultz, a Theranos employee who had tried to alert his grandfather to the concealment going on at the company and the defects in its blood-testing technology.

Holmes, Alex Shultz said, had "desecrated his family."

Holmes spoke last, telling the judge that she loved Theranos and that the company was her "life's work."

"I am so, so sorry," Holmes said. "In looking back there are so many things I would do differently if I had the chance."

She told the judge that going forward she just wants to contribute by helping "one person at a time."

Explaining his decision, Davila harkened back to the agricultural days of Silicon Valley, then talked about the change brought about when the area became known for its innovation.

"The world relies on us," Davila said. "This is a fraud case where an exciting venture went forward ... only to be dashed by misrepresentations, hubris and just plain lies."

Holmes' defense team told the judge that they plan to file papers asking that Holmes be allowed to remain free on bail until an appeal of the judgment is decided.

Comments

JAFO
Registered user
Old Mountain View
on Nov 18, 2022 at 7:53 pm
JAFO, Old Mountain View
Registered user
on Nov 18, 2022 at 7:53 pm

Just an observation,

Many legal experts are starting raise warnings regarding the mentality of "FAKE IT TILL YOU MAKE IT" and "FEAR OF MISSING OUT" investment and business practices here in the valley.

In fact prosecutors are openly saying this is likely not the end of prosecutions, there are many more to follow given the meltdowns in businesses like Uber, Lyft, WeWork, AirBNB and so many GIG companies.

So either these groups remain only private investments, or stop trying to become "legitimate" by suckering stock investments.


Johnny Yuma
Registered user
Blossom Valley
on Nov 19, 2022 at 8:59 am
Johnny Yuma, Blossom Valley
Registered user
on Nov 19, 2022 at 8:59 am

The difference in this fraud case is that Holmes ruthlessly put lives at risk. “Accountability” is a thing that many people are unwilling to accept…


JAFO
Registered user
Old Mountain View
on Nov 20, 2022 at 12:43 pm
JAFO, Old Mountain View
Registered user
on Nov 20, 2022 at 12:43 pm

Just an observation,

I agree with above, the model of having Limited Liability Companies and Corporations was designed to encourage FRAUD. I have 2 business degrees and even I admit that.

The ideas were NOBLE at first because of the idea that a community survival was risky at the time. Remember we are talking about the 18th Century, no internet, no railroads, no cars and no major worldwide enterprises.

But what happened is the slow frog in the pot situation. The frog had no idea how hot the water was because it was rising very slowly. But now it is actually hyperboiling.

These entities were based on people being limited in their damage to the rest of the economy. So it was never a problem. Then came TOO BIG TO FAIL.

This example should set off a major reform in this kind of business standards. We need to start eliminating any limited liability for either FRAUD or UNSAFE practices. These corporate protections need to be reformed so that no more of these kinds of businesses can occur again. To see as much as $8Billion get burned up in this case, and look at WorldCom, Enron, and so many others.

The damages these people do is FAR WORSE than in some cases war crimes. Yet they get preferential treatment under the law. The facts are business kill and disable so many people and never are accountable for it. TIME FOR THAT TO END.

A drug dealer can be sent to life in prison by only harming maybe 1000 people, but then you have people like this that hurt millions.


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