A jury in January convicted Holmes, 38, of three counts of investor fraud and one count of conspiracy after defrauding the company’s investors and endangering patients while peddling a fake blood test technology. The trial lasted three months. More to come. A US federal judge on Friday will decide whether disgraced Theranos founder and former CEO Elizabeth Holmes should serve a long prison sentence for defrauding investors and endangering patients while peddling a fake blood-testing technology. Holmes’ sentencing in the same court in San Jose, Calif., where she was convicted of four counts of investor fraud and conspiracy in January marks a high point in a saga that has been chronicled in an HBO documentary and an award-winning Hulu TV series about her meteoric rise and her disastrous fall. U.S. District Judge Edward Davila will take center stage as he weighs the federal government’s recommendation to send Holmes, 38, to federal prison for 15 years. That’s slightly less than the maximum sentence of 20 years she could face, but much longer than her legal team’s bid to limit her prison term to no more than 18 months, preferably under house arrest. Her lawyers argued that Holmes deserved more lenient treatment as a well-meaning businesswoman who is now a devoted mother with another child on the way. Prosecutors also want Holmes to pay $804 million in restitution. The amount covers most of the nearly US$1 billion Holmes raised from a sophisticated list of investors that included software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart. While courting investors, Holmes used a powerful Theranos board that included former US Secretary of Defense James Mattis, who testified against her during her trial, and two former US Secretaries of State, Henry Kissinger and the late George Shultz , whose son filed a statement blasting Holmes for concocting a scheme that played Schultz “for a fool.”
Pregnant with 2nd child
Dávila’s sentencing — and Holmes’ report date for possible jail time — could be affected by the former businessman’s second pregnancy in two years. After giving birth to a son shortly before her trial began last year, Holmes became pregnant sometime while she was out on bail this year. Although her attorneys did not mention the pregnancy in an 82-page memo filed with Davila last week, the pregnancy was confirmed in a letter from her current partner, William “Billy” Evans, that urged the judge to be lenient. Holmes leaves federal court in San Jose, Calif., on Jan. 3 after being convicted of fraud for turning her blood-testing startup Theranos into an elaborate scam that duped billionaires and other unsuspecting investors into backing an ostensibly revolutionary company whose medical technology never worked as promised. (Nic Coury/The Associated Press) The pregnancy makes it more likely that Davila will face criticism regardless of his sentence, predicted Amanda Kramer, a former federal prosecutor. “There’s a pretty healthy debate about what kind of penalty is needed to exercise general deterrence to send a message to others who are thinking of crossing that line from heavy selling to material counterfeiting,” Kramer said. In that 12-page letter, which included photos of Holmes cradling their one-year-old son, Evans said Holmes participated in a Golden Gate Bridge swimming event earlier this year while pregnant. He also noted that Holmes suffered a case of COVID-19 in August while pregnant. Evans did not disclose Holmes’ end date in his letter.
“spectacular reputation”
Federal prosecutor Robert Leach said unequivocally that Holmes deserved a severe punishment for masterminding a fraud he described as one of the most horrific white-collar crimes ever committed in Silicon Valley. In a scathing 46-page memo, Leach told the judge he has an opportunity to send a message that limits the hubris and excess unleashed by the technology boom of the past decade. Holmes “got her investors’ hopes up that a young, dynamic entrepreneur had changed health care,” Leach wrote. “And through her fraud, she gained spectacular fame, cult following and billions of dollars in wealth.” Although Holmes was acquitted by a jury on four counts of fraud and conspiracy related to patients taking blood tests at Theranos, Leach also asked Davila to consider the health threats posed by Holmes’ behavior. Holmes’ attorney, Kevin Downey, painted her as a selfless visionary who spent 14 years of her life trying to revolutionize health care with a technology that could supposedly detect hundreds of diseases and other foods with just a few drops of blood . Although evidence presented during her trial showed that the tests produced highly unreliable results that could lead patients in the wrong direction, her lawyers argued that Holmes never stopped trying to perfect the technology until it collapsed Theranos in 2018. They also pointed out that Holmes never sold any of Theranos stock — a stake worth $4.5 billion in 2014, when Holmes was hailed as the next Steve Jobs on the covers of business magazines.
