Fallen United States biotech star Elizabeth Holmes was sentenced Friday to 11 years and three months in prison for defrauding investors with her Silicon Valley start-up firm.
The Theranos founder had been convicted on four felony fraud counts in January for persuading investors that she had developed a revolutionary medical device before the company flamed out after an investigation by The Wall Street Journal.
The closely watched case became an indictment of Silicon Valley, and US federal prosecutors had sought a 15-year jail term for Holmes. She was sentenced to 135 months.
US attorney Stephanie Hinds said the sentence “reflects the audacity of her massive fraud and the staggering damage she caused.”
“For almost a decade, Elizabeth Holmes fabricated and spread elaborate falsehoods to draw in a legion of capital investors, both big and small, and her deceit caused the loss of hundreds of millions of dollars,” the prosecutor said in a statement following the judge’s decision.
Holmes, who is pregnant, will not have to surrender herself until April next year, ordered US District Judge Edward Davila in a courtroom in San Jose, California.
Holmes’s lawyer indicated she would appeal her conviction.
Moments before her sentencing, a tearful Holmes told the court, “I stand before you taking responsibility for Theranos. I loved Theranos. It was my life’s work.”
She added, “I am devastated by my failings. Every day for the past years I have felt deep pain for what people went through because I failed them.”
“I gave everything I had to building our company and trying to save our company.”
– ‘Tragedy’ –
Holmes became a star of Silicon Valley when she said her now defunct start-up was perfecting an easy-to-use test kit that could carry out a wide range of medical diagnostics with just a few drops of blood.
At the time, Holmes often dressed soberly in black turtlenecks that evoked her hero, the late Apple icon Steve Jobs.
She sold investors on the idea that her invention would disrupt medical practice, replacing expensive lab tests with her cheap kits.
But prosecutors said Holmes knew her device was not producing accurate and reliable results, yet induced dozens of investors to contribute nearly one billion dollars, all without ever achieving meaningful revenue.