The dramatic rise and fall of former Silicon Valley darling Elizabeth Holmes has come to a conclusion: On Friday afternoon a judge ruled that the former founder and CEO of blood testing startup Theranos must serve 11.25 years in prison.
The sentencing concludes a yearslong legal journey that started with Holmes being indicted in 2018. Thanks to delays caused by the coronavirus pandemic and Holmes becoming pregnant, her trial didn’t end up happening until 2021. It took nearly four months, with a jury hearing out a star-studded list of 29 witnesses that included former Secretary of State Henry Kissinger, former Secretary of Defense James Mattis, and right-wing media mogul Rupert Murdoch. The jury found her guilty on four out of 12 counts of fraud—one count of conspiracy to defraud investors and three counts of wire fraud totaling over $140 million against investors.
Holmes’ sentence is about in line with what prosecutors asked for. A few days before the former CEO was scheduled to be sentenced this week, the Department of Justice asked she be given 15 years in prison, based on federal sentencing guidelines, plus pay $800 million in restitution. Prosecutors argued that would reflect the seriousness of her offenses, including the fact that she knowingly lied to investors from 2010 to 2015 when promising Theranos’ technology could run multiple tests on only one drop of blood (spoiler: It couldn’t). Holmes’ lawyer argued she should be sentenced to no more than 18 months, including letters filed by multiple family members and even New Jersey Sen. Cory Booker pleading for some leniency. Billy Evans, Holmes’ partner, revealed in his letter that the former CEO swam the length of the Golden Gate Bridge while pregnant and that she believes with “religious fervor” the capacity to make the world a better place.
Federal guidelines typically don’t make exceptions for superb swimmers last time we checked. They do say prison time for crimes of larceny, embezzlement, and other forms of theft are determined by how much money was lost, and given Holmes’ $140 million in wire fraud crimes, the DOJ initially said she could face a maximum 20-year prison sentence for the conspiracy count and each count of wire fraud. Given the absurd amount of money Holmes’ crimes involved, and the lack of remorse she showed during her tenure at Theranos, Felix Salmon predicted a few years ago in Slate that her sentence would end up at the upper end of that range.
In case you haven’t caught the many pieces of visual, print, and audio media breathlessly recapping the start of the Holmes saga, here’s a refresher: Her crimes started nearly 15 years ago, right around the time she decided to drop out of college. In 2003 when Holmes was a wee 19-year-old at Stanford University, she took a job at the Genome Institute of Singapore where she worked on a computer chip designed to detect the presence of the SARS virus in the body, piquing her interest in medical devices. Fast-forward about a year and Holmes has dropped out of Stanford to pursue her newly formed blood testing startup, Theranos. By 2014, Holmes had raised $400 million and Theranos presented its first offering, a lab testing device claiming to be capable of running over 1,000 medical tests on an individual with only a few drops of blood. It even earned the first and only approval for a diagnostic test for the herpes virus by the Food and Drug Administration.
But it turned out Theranos’ tests didn’t really work. One woman said her Theranos blood test misdiagnosed her as having HIV, while another almost got diagnosed with prostate cancer after getting faulty blood work by the company. But the promise of Theranos attracted millions upon millions of dollars, including by Safeway, which spent over $300 million on the company, and Walgreens, which paid $140 million. Her success even prompted Forbes to name her one of the youngest self-made female billionaires—worth $4.5 billion at just 30 years old. But things took a nosedive for Holmes in 2015 after the Wall Street Journal outed Theranos as a sham, reporting that the company’s entire premise, one-drop blood testing, was actually only being used on a small number of its tests and that most were still drawing standard vials for bloodwork.
Then came countless leadership reshuffles, a warning from federal regulators, failed partnerships, multiple lawsuits, with federal fraud charges serving as the nail in Holmes’ corporate coffin. Mere months after that, Theranos announced it would be dissolving. Oh, and Forbes eventually rejiggered her net worth to $0.
Holmes filed three requests for a new trial based on new evidence, but a judge denied all of them. She’s expected to try again soon after her sentencing.
