Elizabeth Holmes was once celebrated as a self-made billionaire. Now her house of cards has collapsed: the 38-year-old has to serve a long prison sentence for fraud.
San Jose – Former US businesswoman Elizabeth Holmes was sentenced to more than 11 years in prison for fraud. Judge Edward Davila announced the 135-month sentence in San Jose yesterday.
Holmes wanted to revolutionize the pharmaceutical and healthcare industries with his blood testing company Theranos, but the promise turned out to be a bluff. In January, a grand jury found the 38-year-old guilty of willfully misleading investors.
Holmes intends to appeal
The penalty is a blow to Holmes. His lawyers had pleaded for up to 18 months in prison and otherwise asked for house arrest and community hours as punishment. The prosecution had asked for a minimum of 15 years in prison. Under the law, Holmes could have been sentenced to 20 years in prison. According to US media, he has already announced that he will appeal the verdict. He must not begin his sentence before April 27, 2023.
The lawsuit against Holmes, who once made the front pages of US business magazines as a great hope for innovation in the tech stronghold of Silicon Valley, has caused a stir in the United States. The former business star’s rise and fall has been discussed on podcasts and filmed on the TV series The Dropout. Holmes has always denied the allegations of fraud and has assured that he sincerely believes in Theranos technology. Judge Davila said her failure to plead guilty put her at a disadvantage in determining her sentence.
$4.5 billion – on paper
Holmes left Stanford University in 2003 at age 19 to found Theranos. The start-up promised to simplify blood testing with a breakthrough technology that allowed samples to be taken in just a few drops. Investors were thrilled, at times Theranos was valued at around nine billion dollars. Holmes was worth an estimated $4.5 billion, at least on paper. The company founder has been hailed on magazine covers and conferences as a successful self-made billionaire.
But the sharp rise was followed by the spectacular crash: In 2015, an investigative report by The Wall Street Journal cast serious doubts about Theranos’ technology. Though Holmes initially stubbornly denied all allegations, his house of cards continued to falter. A series of other investigative articles finally exposed the alleged success story as a hoax. In fact, Theranos’ supposed innovations didn’t work, instead the company has apparently been secretly using conventional testing methods. Fraud allegations followed in 2018. dpa
