Photographic illustration: Aïda Amer. Photo: Justin Sullivan/Getty Images
Elizabeth Holmes was sentenced Friday by a California judge to 11 years and three months in prison for defrauding investors in her failed blood testing company, Theranos.
Why it matters: This is the end of a years-long saga that saw the famous startup founder become a cautionary tale of Silicon Valley’s “until you make it” culture.
Flashback: Holmes in January was found guilty of four counts of wire fraud and conspiracy to commit wire fraud.
- Theranos had raised around $1 billion from investors, including at a valuation of nearly $11 billion, backers including Rupert Murdoch, Tim Draper, Betsy DeVos, James Mattis, the Walton family and the Cox family.
- The jury was unable to reach a verdict on three other charges involving investors. He did not convict on charges related to Theranos’ advertising practices or patients, although lawyers debated Friday whether or not the judge could consider his conduct toward patients during sentencing.
- Each guilty verdict carried a maximum sentence of 20 years in prison.
Background: Prosecutors had asked the judge for a 15-year sentence, while Holmes’ defense attorneys had asked for 18 months of house arrest.
- Prosecutors also sought full restitution of what they say were $804 million in investor losses tied to the guilty verdicts. But Judge Ed Davila reduced the applicable loss and said he would hear more about restitution arguments in the future.
- Holmes submitted dozens of letters of support from family and friends, including one from Sen. Cory Booker (D-NJ).
What they’re saying: “This case is so troubling on so many levels,” Davila said, adding that Holmes “undoubtedly” had a desire to see his company succeed.
- The judge also said it may have been arrogance or “fame intoxication” that led to Holmes’ conduct.
A tearful Holmes read a speech in court that said, “I regret my failures with every cell in my body,” Law360 reports.
- “Over the past few years I have felt deep pain,” he said, adding that he failed his workers, investors and patients he wanted to serve. “I gave everything I had to build our company.”
What happens next: Holmes’ former boyfriend and Theranos business partner Sunny Balwani in July was found guilty of 12 counts of conspiracy and fraud against certain investors and patients.
- Balwani is expected to be sentenced Dec. 7, and his attorney was available Friday for Holmes’ sentencing.
Editor’s note: Cox Enterprises, which backed Theranos, is the parent company of Axios.