The 135-month sentence handed down on Friday marks the culmination of a story that has sparked a debate about the US tech sector’s “fake it till you make it” ethos and the investment community’s willingness to embrace charismatic company founders. Holmes, 38, who is pregnant with her second child, wept as she addressed the court on Friday. “I loved Thiranos. It was my life’s work,” he said. “I am devastated by my failures.” After the sentence was handed down, Holmes, who was wearing black, hugged her husband Billy Evans. She left through the courthouse door, avoiding the throngs of press awaiting her exit. She is scheduled to begin serving her sentence in April. “Her sentence reflects the brazenness of her massive fraud and the staggering damage it caused,” U.S. Attorney Stephanie Hinds said in a statement. Holmes was found guilty in January of four counts of defrauding investors after a trial that lasted nearly four months. Jurors were told how Theranos’ centerpiece, the Edison machine, was incapable of performing the groundbreaking blood tests promised by Holmes and her company. Prosecutors pointed to evidence they said showed he falsified approvals to win the approval of investors and partners, a deception that led Theranos to raise $900 million in funding at a $9 billion private valuation. Prosecutors said the investors deserved full reimbursement for their costs, likening Theranos to “a plane flying with a broken engine.” “The writing was on the wall, he was going to fail,” prosecutor John Bostic said during Friday’s sentencing hearing. “Investors were locked into this plane. There was no way he could escape. When the company went out of business, none of them got anything out of their investment.” Holmes faced up to 20 years in prison. The Justice Department, calling her “blinded” by ambition, had asked Judge Edward Davila to impose a 15-year prison sentence as well as millions of dollars in restitution to her defrauded investors. “Holmes’ crimes were not a failure, they were lying — they were lying in the most serious context, where everyone needed her to tell the truth,” prosecutors wrote. A hearing will be held to determine final compensation for 10 defrauded investors, including Rupert Murdoch. Judge Davila estimated the amount of money lost at about $121 million, although that could change. Holmes’ lawyers said in a sentencing memo that 18 months of house arrest, plus community service, was appropriate. They gave her a well-intentioned entrepreneur with honest goals and a determined woman with an unwavering belief that she could achieve what Theranos set out to do: create a game-changing device that could perform a series of sophisticated diagnostic tests only on a small drop of blood. “We recognize that this may seem excessive given the public perception of this case — especially when Ms. Holmes is seen as the caricature rather than the person. when the company is seen as a house of cards, not the ambitious, inventive and undeniably valuable business it was; and when the media vitriol about Ms. Holmes is taken into account,” her defense attorneys wrote. At Friday’s hearing, defense attorney Kevin Downey noted that Holmes had not tried to sell her shares in the company, unlike other high-profile people convicted of major fraud. “These are the cases with yachts, airplanes, parties and big mansions,” Downey said. “What did this woman do? Build technology.” After securing lucrative contracts with Walgreens and others, the promise of Holmes’ Edison machine quickly disintegrated. The company began using off-the-shelf technology made by companies such as Siemens to conduct tests, and it sometimes provided incorrect results. It wasn’t until Theranos employee-turned-whistleblower Tyler Shultz, nephew of former US Secretary of State and Theranos director George Shultz, tipped off the Wall Street Journal that the matter came to light. Recommended Reporter John Carreiro’s book about Holmes and Therano, Bad Blood, became a New York Times bestseller and inspired a series of dramatic television reimaginings, fueled by Holmes’ distinctive appearance and Steve Jobs-inspired mannerisms. Schultz’s father, Alex, spoke in court Friday, saying that Holmes had hired a private investigator to follow Tyler and that Tyler had slept with a knife under his pillow out of fear. “It was an exhausting experience,” Alex Shultz said. “My family home was defiled by Elizabeth.” Holmes’ defense said the public’s interest should not be used against her, noting that more than 130 people “who really know Mrs Holmes” had written to the court to support her. Among them was Democratic Sen. Cory Booker, who bonded with fellow vegan Holmes at a dinner where they both shared a bag of almonds. “She has within her a sincere desire to help others, to provide meaningful service, and she has the ability to redeem herself,” he wrote. In a separate trial, Holmes’ former friend and Theranos chief operating officer Ramesh “Sunny” Balwani pleaded guilty to 12 counts of fraud. He is expected to be sentenced in early December.
