The founder of Theranos was convicted of three counts of investor fraud and one count of conspiracy.
A California judge has sentenced Theranos founder Elizabeth Holmes to 11 years and three months in prison for defrauding investors in her now-defunct blood testing startup, which was once valued at $9 billion.
U.S. District Judge Edward Davila in San Jose, California, sentenced Holmes to three counts of investor fraud and one count of conspiracy. A jury convicted Holmes, 38, in January after a three-month trial.
The judge set Holmes’s surrender date for April. Her lawyers are expected to ask the judge to release her on bail during her appeal.
Assistant attorney Jeff Schenk told the judge before handing down the sentence that a 15-year prison sentence would be “making a statement that the end does not justify the means.”
But Holmes’ attorney, Kevin Downey, pushed for clemency for Holmes at the hearing, saying that unlike someone who committed a “great crime,” she was not motivated by greed.
Holmes had asked in court documents for a lenient sentence of 18 months of house arrest followed by community service, urging the judge not to make her a “martyr to public passion”.
Prosecutors said at trial that Holmes misrepresented Theranos’ technology and finances, including claiming that the miniaturized blood testing machine was capable of performing a series of tests using a few drops of blood. The company secretly relied on conventional machines from other companies to perform patient tests, prosecutors said.
Prior to her sentencing, prosecutors had said a 15-year sentence was necessary to deter Holmes and others from committing fraud.
Her crimes “damaged the trust and integrity” on which Silicon Valley’s startup economy relies, they said.
The federal probation office had recommended a 9-year sentence, according to court documents.
Once valued at $9 billion, Theranos Inc promised to revolutionize the way patients get diagnoses by replacing traditional laboratories with small machines intended for use in homes, drugstores and even on the battlefield.
Forbes named Holmes the world’s youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.
But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned the technology.
At trial, prosecutors said Holmes engaged in fraud by lying to investors about Theranos’ technology and finances rather than allowing the company to fail.
Holmes testified in her own defensesaying she believed her statements were correct at the time.
While she was convicted on four counts, Holmes was acquitted on four other counts, claiming she defrauded patients who paid for Theranos tests.
Davila had rejected Holmes’ requests to have her convictions overturned, saying they were supported by the evidence at trial.
Now that the sentence has been imposed, Holmes can challenge those rulings and her sentence in the 9th US Circuit Court of Appeals.