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Tag: Elizabeth Holmes

  • Court orders Theranos founder Elizabeth Holmes to go to prison

    Court orders Theranos founder Elizabeth Holmes to go to prison

    A court has ruled that disgraced Theranos founder Elizabeth Holmes must report to prison while she appeals against her fraud conviction.

    Holmes, 39, had asked a judge to remain free while she fought against her jail sentence for a blood-testing hoax.

    She was sentenced to over 11 years in prison after a jury last year found her guilty of defrauding investors.

    In a separate ruling, US District Judge Edward Davila also ordered Holmes to pay $452m (£363.8m) to victims.

    She will split the multi-million dollar payment with her former romantic and business partner, ex-Theranos boss Ramesh “Sunny” Balwani.

    Holmes had been previously ordered to surrender to authorities on April 27. The judge will now set a new date for her to go to prison.

    The BBC has reached out to Holmes’ attorneys for comment.

    Balwani was sentenced to 13 years in prison after being convicted on 12 counts of fraud and conspiracy last year. He began serving his sentence in April after losing his own attempt to remain free while appealing against his conviction.

    The court has recommended Holmes serve her time behind bars at a federal minimum-security women’s prison in Bryan, Texas.

    Holmes had asked the Ninth Circuit Court of Appeals to delay her sentence days before she was supposed to report to prison in April.

    The Theranos founder had said that she would raise “substantial questions” about her case that could warrant a new trial, an argument that Mr Davila had rejected.

    “Contrary to her suggestion that accuracy and reliability were central issues to her convictions, Ms Holmes’s misrepresentations to Theranos investors involved more than just whether Theranos technology worked as promised,” he said at the time.

    Holmes’ attorneys also argued she should remain free while appealing against her case to care for her children.

    The mother of two has been living in San Diego, California, with her partner, hotel heir William Evans, as well as their one-year-old son William and three-month-old daughter Invicta.

    Once hailed as the “next Steve Jobs”, Holmes was said to be the world’s youngest self-made billionaire.

    She started Theranos after dropping out of Stanford University. During her time leading the company, Holmes was able to raise millions of dollars from high-profile investors, including media mogul Rupert Murdoch, former Secretary of State Henry Kissinger and Oracle founder Larry Ellison.

    But the start-up crashed in 2018 after investigations revealed its technology did not work. The blood-testing device was purported to be able to run a multitude of tests from just a few drops of blood.

    The company’s infamous downfall was documented in a TV series, an HBO documentary and a podcast.

  • Elizabeth Holmes sentenced to 11 years in prison on fraud charges

    Elizabeth Holmes, founder of the now defunct blood-testing start-up Theranos, has been sentenced to prison on four counts of criminal fraud for deceiving investors.

    The Wall Street Journal reports Holmes on Friday was sentenced by U.S. District Judge Edward Davilato to 11 years and three months in federal prison. Davilato preceded over Holmes’ months-long criminal trial.

    Back in January, Holmes was found guilty on four of 11 charges of defrauding the company’s investors and patients by being dishonest about the accuracy of the technology they were using.

    Holmes faced up to 20 years in prison, along with a fine of $250,000 plus restitution for each charge, which amounts to $1 million in fines, and nearly $804 million in restitution. Meanwhile, Holmes’ legal team requested 18 months of house arrest to compensate for the four counts of criminal fraud charges.

    “I still believe that she holds onto the hope that she can make contributions to the lives of others, and that she can, despite mistakes, make the world a better place,” Senator Cory Evans said, per CNN.

    Theranos, which Holmes founded after she dropped out of Standford at 19, was once estimated to be worth $9 billion, but later dropped after investors were misled. Holmes falsely claimed that Theranos could diagnose hundreds of diseases with just a few drops of blood.

    Holmes stood up in court on Friday and read a statement on her own behalf.

    “There is so much I have wanted to say. I want to thank the court for the respect you have shown me. I stand before you taking responsibility for Theranos,” she said.

    “I loved Theranos, it was my life’s work. My team meant the world to me. They worked tirelessly. Every day I have felt deep pain for what people went through because I failed them. I am so, so sorry. I gave everything I had to building and trying to save our company. Looking back, there are so many things I would do differently if I had the chance,” she said.

    Source: Complex.com

  • Theranos founder Elizabeth Holmes jailed for fraud

    Theranos founder Elizabeth Holmes has been sentenced to over 11 years in prison for defrauding investors in her blood testing start-up that was once valued at $9bn (£7.5bn).

    The former Silicon Valley star falsely claimed the technology could diagnose disease with just a few drops of blood.

    Holmes, 38, who is pregnant, tearfully told the court she felt “deep pain” for those misled by the scam.

    She was found guilty in January after a three-month trial.

    Holmes is expected to appeal against the sentence, which was handed down on Friday in a California court.

    Once hailed as the “next Steve Jobs”, she was at one time said to be the world’s youngest self-made billionaire.

    She launched Theranos after dropping out of Stanford University at age 19, and its value rose sharply after the company claimed it could bring about a revolution in disease diagnosis.

    But the technology Holmes touted did not work and – awash in lawsuits – the company was dissolved by 2018.

    At Holmes’ trial in San Jose, California, prosecutors said she knowingly misled doctors and patients about Theranos’ flagship product – the Edison machine – which the company claimed could detect cancer, diabetes and other conditions using just a few drops of blood.

    They also accused Holmes of vastly exaggerating the firm’s performance to its financial backers.

    Jurors ultimately found her guilty on four counts of fraud, with a maximum sentence of 20 years in prison. But they found her not guilty on four other charges, and failed to reach a verdict on three more.

    Before Judge Edward Davila issued his sentence on Friday, Holmes read a speech to the court in which she tearfully apologised to investors and patients.

    The rise and fall of Elizabeth Holmes

    “I am devastated by my failings. I have felt deep pain for what people went through, because I failed them,” she said.

    “I regret my failings with every cell of my body,” she continued.

    The judge referred to Holmes as a “brilliant” entrepreneur, and told her: “Failure is normal. But failure by fraud is not OK.”

    Silicon Valley is a place where fortunes can be made and squandered. It’s not unusual for investors to lose big sums of money.

    It’s also not unusual for founders to make grandiose claims about their tech.

    What is different about Holmes’ case, though, is that Theranos’ unwinding actually led to fraud charges that stuck.

    It is notoriously difficult to get successful prosecutions in cases of white-collar fraud in the US.

    When investors lose money, they often simply write it off, or pursue compensation privately.

    Holmes’ punishment is a warning for Silicon Valley executives that there are real consequences for misleading investors.

    This isn’t a slap on the wrist, it’s significant time in prison.

    She is required to surrender to begin serving her sentence on 27 April.

    Holmes and Ramesh “Sunny” Balwani, her former business partner and lover, were charged in 2018 with wire fraud and conspiracy to commit wire fraud. Balwani, who was tried separately, was found guilty of fraud this summer. He will be sentenced next month.

    Prosecutors requested that she face 15 years in prison and pay some $800m in restitution to investors, including several high-profile figures such as former US Secretary of Defense James Mattis, who testified against her at the trial, and software tycoon Larry Ellison.

     

    But Holmes’ defence team – who argued she was well-intentioned and trying to help people – said she should spend 18 months under house arrest.

    The judge on Friday determined that she had caused $121m in losses to investors, including Rupert Murdoch and the family that owns Walmart. The amount she will be required to repay will be determined at a later court hearing.

    Over 130 friends, family and former Theranos employees wrote to the judge to appeal for clemency.

    The group noted that Holmes is a young mother. She had a son in July 2021 and is currently pregnant with her second child.

    It is not known when she is due to give birth. Her lawyers are expected to try to keep her from entering prison until after the baby is born.

    Her partner Billy Evans, in his sentencing memo to the court, told the judge that he fears for “a future in which my son grows up with a relationship with his mother on the other side of glass armed by guards”.

    Eileen Lepera, a Silicon Valley secretary who lost a chunk of her life savings by investing in Theranos, told the BBC she was “happy” with the sentence.

    “I think it’s fair, considering all the facts of the case,” Ms Lepera said. “She [Holmes] knew it was fraud, and she put people’s lives at risk.”

     

    Source: BBC

     

  • Theranos: Silicon Valley holds breath for Elizabeth Holmes sentencing

    Theranos founder Elizabeth Holmes was found guilty of defrauding investors 10 months ago.

    Her company was once valued at $9bn (£7.5bn). It’s now a byword for corporate fraud.

    Holmes, 38, claimed the start-up could diagnose hundreds of diseases with just a few drops of blood. That wasn’t true.

    In January a jury concluded she had deliberately misled investors. She was convicted of four counts of wire fraud – with a maximum sentence of 20 years.

    However, it has taken an eternity to get this point – sentencing.

    Her legal team is arguing for 18 months of house arrest.

    The prosecution wants her to serve 15 years in prison and to pay back the best part of a billion dollars to investors.

    The judge has a big decision to make. Silicon Valley executives will be watching with interest. Founders rarely end up getting convicted of fraud.

    What happens to Holmes will be seen as a test case. Does corporate fraud in Silicon Valley end up with a slap on the wrist? Or does it mean serious jail time?

    We are about to find out.

    A school form
    Image caption, Her lawyers submitted school papers showing Holmes saying she tries “to do right”

    Elizabeth Holmes’ long wait for a verdict is unusual. In part it’s because her former business partner, and lover, Sunny Balwani, was tried after her.

    The trial was separated after Holmes claimed Balwani had been controlling – and even accused him of sexual assault. Balwani has vehemently denied the accusations.

    In the summer, Balwani was also found guilty of fraud. The judge will hand out his punishment in December.

    Holmes’ sentencing was supposed to happen last month.

    However, in a bizarre twist the defence team claimed a key witness – former Theranos lab director Adam Rosendorff – had visited Holmes’ partner Billie Evans.

    Snapshots show Holmes enjoying her freedom since her conviction in June

    Snapshots show Holmes enjoying her freedom since her conviction in June

    Mr Evans claimed an apparently repentant Rosendorff had said that prosecutors had “tried to make everyone look bad” and felt “he had done something wrong”.

    But when questioned in a hastily put-together hearing, Mr Rosendorff told the judge he stood by his original testimony.

    A new date for sentencing was given – 18 November.

    Snapshots show Holmes enjoying her freedom since her conviction in June

    Since her conviction, the last months appear to have been filled with family fun – with Holmes embracing her freedom.

    Pictures supplied to the court by Mr Evans show trips skiing and to the Grand Canyon. Baby baths and pyjama days.

    Dozens of letters have been submitted vouching for Holmes’ character.

    Among them is one from Cory Booker, a US Senator for New Jersey, who wrote to the judge.

    The Democrat said they’d bonded over vegan food at a dinner six years before she was charged with fraud, and they had remained friends. He appealed for clemency.

    The defence has even submitted a school Q&A – in which a young Holmes says she always tries “to do right”.

    It’s a theme her legal team comes back to time and time again, that she was trying to help people, that her intentions were good.

    The prosecution, though, is calling for a tough sentence for “one of the most substantial white collar offenses Silicon Valley or any other District has seen”.

    They say the idea that Holmes has been unfairly victimised is plain wrong.

    The prosecution is also asking Holmes to pay $803m in restitution to investors.

    “She preyed on hopes of her investors”, Assistant US Attorney Robert Leach said.

    One investor was Eileen Lepera. A Silicon Valley secretary, she says her boss told her to invest in Theranos, tipping it as the next Apple. She put a chunk of her life savings in, only to lose everything.

    “I think she should do some prison time,” she says.

    “A normal person just doesn’t do that to another person. When they know that [fraud] is happening, they stop immediately.”

    Sentencing starts at 18:00 GMT.

    Source: BBC