Elizabeth Holmes, CEO of Theranos, is facing charges that could result in a 15-year prison term
Elizabeth Holmes, the former CEO of Theranos, has been charged with fraud for defrauding investors out of hundreds of millions of dollars by claiming her company had developed a revolutionary blood testing device. Federal prosecutors have asked a judge to give Holmes a sentence of 15 years in prison.
Prosecutors called the case “one of the most substantial white collar offences Silicon Valley or any other District has seen,” and they strongly refuted the defense’s claim that Holmes was treated unfairly, in part because of media coverage.
About a year after her conviction on three felony counts of wire fraud and one felony count of conspiracy to commit fraud, Holmes is scheduled to appear for sentencing on November 18 in federal court in San Jose, California. For each count, she could spend up to 20 years in prison.
In a 46-page brief filed on Friday, Assistant U.S. Attorney Robert S. Leach argued that, “she repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors.” When everyone desperately needed the truth from her, “Elizabeth Holmes’ crimes were not failing, they were lying.”
In an 82-page document filed late Thursday, Holmes’ attorneys argued for a sentence of no more than 18 months, arguing that their client’s reputation had been irreparably damaged and that she had become a “caricature to be mocked and vilified.”
Prosecutors asked that Holmes, then 38 years old, be given a lengthy prison sentence and ordered her to pay $803,840,309 in restitution for her role in the years-long scheme that made her one of the most admired and wealthy Silicon Valley businesspeople in the world.
She took advantage of her backers’ belief that they had backed a game-changing young entrepreneur in the healthcare industry. She used the prestige of her distinguished advisory board to her advantage,” Leach said. Through her lies, she was able to amass unimaginable wealth, fame, and adoration.
Leach also noted that after John Carreyrou of the Wall Street Journal exposed the scheme, Holmes “attacked him, along with his sources” in an effort to shift blame away from himself.
As Leach put it, “at trial, she blamed her COO (and longtime boyfriend), her board, her scientists, her business partners, her investors, her marketing firm, her attorneys, the media, and anyone else but herself.”
Ramesh “Sunny” Balwani, the company’s former COO, was found guilty on 12 felony counts of investor and patient fraud in a separate trial in July. On December 7, he will be given a verdict and sentence.
Additionally, Leach stated in his article that Holmes’ actions were dangerous and endangered real patients’ health.
“As money was drying up, she went to market with an unproven and unreliable medical device,” he explained. “When her lead assay developer quit as Theranos launched, she chillingly told the scientist: ‘she has a promise to deliver to the customer, she doesn’t have much of a choice but to go ahead with the launch.’”
If U.S. District Judge Edward Davila decides to sentence Holmes to prison, her attorneys say she should get a light sentence because she is not a threat to the public and has no record.