A California judge sentenced Theranos founder Elizabeth Holmes, partner of San Diego-based Evans Hotels‘ heir William “Billy” Evans, to 11 years and three months in prison for defrauding investors in her now-defunct blood testing startup that was once valued at $9 billion.
U.S. District Judge Edward Davila in San Jose, Calif., sentenced Holmes on three counts of investor fraud and one count of conspiracy. A jury convicted Holmes, 38, in January following a trial that spanned three months.
Holmes, dressed in a dark blouse and black skirt, hugged her parents and Evans, who she reportedly married in 2019, after the sentence was handed down.
During the hearing, Holmes cried as she said she was “devastated” by her failures and would have done many things differently if she had the chance.
“I have felt deep shame for what people went through because I failed them,” she said.
Before handing down the sentence, Davila called the case “troubling on so many levels,” questioning what motivated Holmes, a “brilliant” entrepreneur, to misrepresent her company to investors.
“This is a fraud case where an exciting venture went forward with great expectations only to be dashed by untruths, misrepresentations, plain hubris and lies,” he said.
The judge set Holmes’ surrender date for April. Her lawyers are expected to ask the judge to allow her to remain free on bail during her appeal.
Assistant U.S. Attorney Jeff Schenk told the judge before he handed down the sentence that a 15-year sentence would be “making a statement that the ends don’t justify the means.”
Holmes’ attorney Kevin Downey sought home confinement for Holmes, saying leniency was justified because unlike someone who committed a “great crime” she was not motivated by greed.
Prosecutors said at trial that Holmes misrepresented Theranos’ technology and finances, including by claiming that its miniaturized blood testing machine was able to run an array of tests from a few drops of blood. The company secretly relied on conventional machines from other companies to run patients’ tests, prosecutors said.
Ahead of her sentencing, prosecutors had said a 15-year sentence was necessary to deter Holmes and others from fraud.
Her crimes “damaged the trust and integrity” on which Silicon Valley’s startup economy relies, they said.
The federal probation office had recommended a 9-year prison sentence, according to court papers.
Once valued at $9 billion, Theranos Inc promised to revolutionize how patients receive diagnoses by replacing traditional labs with small machines envisioned for use in homes, drugstores and even on the battlefield.
Forbes dubbed Holmes the world’s youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.
But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned its technology.
At trial, prosecutors said Holmes engaged in fraud by lying to investors about Theranos’ technology and finances rather than allowing the company to fail.
Holmes testified in her own defense, saying she believed her statements were accurate at the time.
Though she was convicted on four counts, Holmes was acquitted on four other counts alleging she defrauded patients who paid for Theranos tests.
Davila had denied Holmes’ requests to overturn her convictions, saying they were supported by the evidence at trial.
Now that the sentence has been imposed, Holmes can challenge those rulings and her sentence at the 9th U.S. Circuit Court of Appeals.
Reuters contributed to this article.