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Former Theranos CEO Elizabeth Holmes will be sentenced

Former Theranos CEO Elizabeth Holmes awaits sentencing Friday, 10 months after a the jury found her guilty for defrauding investors in the failed blood-testing company.

The sentencing hearing in San Jose, Calif., began just after 10 a.m. Pacific Time and continued into the late afternoon — an unusually long time for what is usually a fairly procedural hearing.

Holmes, 38, founded Theranos in 2003, and it quickly grew to become one of the best-known startups in the world, with a peak valuation of $10 billion. But a series of revelations by the Wall Street Journal raised questions about the effectiveness of the company̵[ads1]7;s technology and business practices, and sparked several investigations by federal and state officials.

The sentence, to be handed down by Judge Edward Davila of the Northern District of California, will be seen as a signal of how serious criminals in the high-flying world of tech startups can expect to be punished when they misrepresent a company’s capabilities.

“Especially in a very high-profile case, you want the public to know that if you defraud investors or anyone else, you’re looking at serious prison time,” said Carrie Cohen, global co-chair of the Investigations and White-Collar Defense practice group at the law firm Morrison Foerster.

“Given the facts that all came forward at trial, I would suspect she’s looking at a significant amount of prison, probably closer to what the government asked for,” Cohen said.

In January, Holmes was convicted of four counts of investor fraud and conspiracy. A jury acquitted her of four other counts of harming patients who used Theranos’ blood-testing machine, and could not agree on other charges. Investors in Theranos, a group that included media mogul Rupert Murdoch and software billionaire Larry Ellison, lost $144 million when the startup faltered.

Federal prosecutors have asked for a 15-year sentence and $800 million in restitution, painting Holmes’ crimes as “among the most extensive white-collar crimes Silicon Valley or any district has seen,” according to court filings this week.

Theranos founder Elizabeth Holmes attends the court hearing
Elizabeth Holmes, founder of Theranos, right, leaves federal court in San Jose, California, Thursday, Sept. 1, 2022.


Holmes’ lawyers have asked for no prison time, arguing that she poses no danger to society, has debts she likely cannot repay and has already suffered from the “dehumanizingly cruel” media coverage of Theranos’ fall. They presented testimony from 130 people, including friends, family and even Senator Cory Booker, testifying to Holmes’ attentiveness.

Holmes has a 1-year-old son and appeared to be pregnant at her last court appearance. Both are factors that could lead the judge to be lenient in sentencing, Cohen said.

Holmes has testified that she was psychologically traumatized after being raped in college, and that she suffered sexual and emotional abuse at the hands of former Theranos chief operating officer Sunny Balwani, who is 19 years her senior. While the duo ran Theranos, Holmes claimed that Balwani controlled her schedule, diet and presentation to others, often belittling and ostracizing her.

Balwani’s lawyers have denied the allegations. He was found guilty of 12 cases of fraud in July and is scheduled to be sentenced on December 7.

Holmes has said she plans to appeal her conviction. If she is sentenced to prison, a point of contention could be when she begins her sentence. The judge can delay the start of the term until after Holmes has given birth. She can also post bail to stay out of jail while she appeals the sentence, Cohen said.

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