Elizabeth Holmes, founder and CEO of the collapsed Silicon Valley blood testing company, Theranos, has been sentenced to 11.25 years in prison plus three years supervised release for financial crimes she committed while running the once-high flying venture.
Holmes was also fined a $400 million special assessment. Holmes must surrender to custody on April 27, 2023. Holmes is expected to appeal.
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Before Holmes' sentence was read, she addressed the courtroom to express remorse.
"I stand before you taking responsibility for Theranos. I loved Theranos. It was my life’s work. My team meant the world to me. They wanted to make a difference in the world. I am devastated by my failings," she said.
"Every day for the past years, I have felt deep pain for the people…those people who believe in us and those patients. I worked so hard to serve. I gave everything I had to try to to build...Theranos. Looking back, there are so many things I would do differently. I tried to realize my dream too quickly."
She claimed to invent a machine that could analyze a multitude of medical conditions with a 50mL blood sample which modern medical tech required a full phlebotomy (typically a 500 mL blood draw) to diagnose as one-offs.
After a series of fraudulent tech demos, she raised hundreds of millions for her start-up firm and even began selling prototype machines to pharmacies (CVS, most notably) in order to establish cash flow. Of course, the tech didn't work, so her machines produced a bunch of false negatives. She also had her firm acquire a full Siemens analysis system to fake the results of tests her machines couldn't perform. And, because she was only drawing 50 mL samples, she was engaged in really shady use of the devices to get results out (mixing or diluting samples before introducing them to the Siemens device, which produced more false negatives).
Eventually, she wasn't able to maintain the masquerade any longer. Her business and her tech was exposed as fraudulent. And so the investors sued. They also got the cops involved, because that's something you get to do when you're a billion dollar investment group.