The darling of Silicon Valley faces 20 years
Blood test fraudster could get jail and a £673m fine
A DISGRACED entrepreneur once tipped as Silicon Valley’s next Steve Jobs was last night facing jail over her fraudulent blood testing company.
Elizabeth Holmes arrived at the court in San Jose, California, for her sentencing hearing after she defrauded investors in the company Theranos, which she founded.
Holmes had said Theranos had developed a test to diagnose hundreds of diseases with just a few drops of blood, claims which were proved false. She entered the courthouse holding hands with her husband Billy Evans. The couple have a 12-month-old son, and Holmes, 38, is pregnant.
Prosecutor John Bostic told the jury about Holmes’ striking response when told by a consultant with a major US pharmacy chain that the blood tests could be inaccurate and she could go to jail.
She allegedly said: ‘They don’t put attractive people like me in jail.’
Holmes was found guilty in January of four counts of fraud.
At its peak, Theranos employed more than 800 people and was valued at $9 billion (£8 billion), with Holmes having a personal fortune of $4.5 billion (£4 billion), but after the Wall St Journal raised questions about the reliability of the blood tests, it quickly collapsed.
The maximum sentence Holmes faces is 20 years in prison, but prosecutors have asked for a 15-year term and $804 million (£673 million) in restitution – the sum Theranos raised from investors in 2013 and 2014. Holmes requested no more than 18 months in prison and community service. She was due to be sentenced late last night (UK time).
Holmes captivated Silicon Valley by claiming to have developed a machine called the Edison that would take a single drop of blood which could be used to detect eve
‘Don’t jail attractive people like me’
rything from STDs to cancer. It was a breakthrough because conventional blood tests require significantly more blood and multiple tests have to be run.
Holmes appeared on the cover of magazines such as Forbes, flew on a private jet, dined at the White House and lived in a $15 million (£13 million) mansion.
She founded Theranos when she was 19 after dropping out of Stanford College.
In their sentencing memo, prosecutors accused Holmes of having a ‘reality distortion field’ around her.
They said: ‘She repeatedly chose lies, hype and the prospect of billions of dollars over patient safety and fair dealing with investors.
‘She accepts no responsibility. Quite the opposite, she insists she is the victim. She is not.’
Holmes’ lawyers claimed she was manipulated by Ramesh ‘Sunny’ Balwani, who was the Theranos president and chief operating officer who she was also dating.
Balwani, 57, was found guilty of two counts of conspiracy and ten counts of wire fraud in a separate trial, and faces 20 years in jail. He accused Holmes of manipulating him.