Tech star jailed for fraud over ‘magic box’ that didn’t work
Millions raised for useless diagnostic device
A US judge has sentenced disgraced Theranos chief executive Elizabeth Holmes to more than 11 years in prison for duping investors in the failed start-up that promised to revolutionise blood testing but instead made her a symbol of Silicon Valley’s culture of audacious self-promotion.
The sentence imposed by US District Judge Edward Davila was shorter than the 15-year penalty requested by federal prosecutors but far tougher than the leniency her legal team sought for the mother of a year-old son with another child on the way.
Holmes, who was chief executive throughout the company’s turbulent 15-year history, was convicted in January over the scheme, which revolved around the company’s claims to have developed a medical device – a so-called “magic box” – that could detect a multitude of diseases and conditions from a few drops of blood. But the technology never worked.
Theranos was dashed “by misrepresentations, hubris and just plain lies”, the judge said. Holmes sobbed as she told the judge she accepted responsibility for her actions.
“I regret my failings with every cell of my body,” she said. The sentencing in the same
courtroom in San Jose, California, where Holmes was convicted on four counts of investor fraud and conspiracy in January, marks another climactic moment in a saga that has been dissected in an HBO documentary and an award-winning Hulu series about her meteoric rise and mortifying downfall.
While wooing investors, Holmes took advantage of a high-powered Theranos board that included former defence secretary James Mattis, who gave evidence against her during her trial, and two former secretaries of state, Henry Kissinger and the late George Shultz, whose son submitted a statement condemning Holmes for concocting a scheme that played Mr Shultz “for the fool”. Holmes, 38, faced a maximum of 20 years, but her legal team asked the judge for a sentence of no more than 18 months, preferably served in home confinement.
Her lawyers argued that Holmes deserved more lenient treatment as a well-meaning entrepreneur who is now a devoted mother with another child on the way.
Their arguments were supported by more than 130 letters submitted by family, friends and former colleagues praising Holmes.