Elizabeth Holmes, the founder of medical startup Theranos, has been sentenced to 11 years in prison for defrauding her former company’s investors. At its peak, the start-up was valued at over AUD $13 billion.
Court papers show that Holmes had initially asked for a sentence of 18 months of house arrest, as well as community service hours. However, Judge Edward Davila from the California District Court wasn’t having a bar of it as per the ABC.
In January, Holmes was found guilty of four counts of fraud after a criminal trial, revealing the ultimate consequences of girlbossing too close to the sun.
In the Northern California District Court, Holmes was found guilty of three counts of wire fraud and one count of conspiracy to defraud investors. She was found not guilty of four other charges, and the jury failed to reach a unanimous verdict for three of the eleven total charges.
Holmes founded Theranos when she was in her second year at Stanford University, aged 19.
The narrative that Holmes sold to investors was that Theranos’ tech could detect a load of diseases — like cancer, high cholesterol and diabetes — from a few drops of blood as opposed to a needle injection.
The project raised a lot of money from a lot of high-profile peeps, including Rupert Murdoch (who sold his stock in 2017, before the company collapsed), the Walton Family — aka the people who run Walmart — and the DeVos family office’s investment arm.
Problematically, the tests were not very accurate. Vanity Fair writer Nick Bilton conducted an investigation into Theranos back in 2016.
“Regulators from the Centers for Medicare and Medicaid Services, which regulates laboratories, visited the labs and found major inaccuracies in the testing being done on patients,” he wrote.
“C.M.S. also soon discovered that some of the tests Theranos was performing were so inaccurate that they could leave patients at risk of internal bleeding, or of stroke among those prone to blood clots. The agency found that Theranos appeared to ignore erratic results from its own quality-control checks during a six-month period last year and supplied 81 patients with questionable test
results.”
Oof, indeed!
During her tenure as Theranos CEO, the company raised $1.3billion from investors and Holmes became the world’s youngest self-made billionaire.
She drew a lot of comparison to Steve Jobs, who she reportedly emulated by wearing black turtlenecks. This once again proves it’s incredibly easy to spot the people who work in tech startups.
In the trial, the prosecution’s core argument was that Elizabeth Holmes was aware of the flaws in the company’s tech, but misled investors anyway.
Holmes denied in the trial that she intended to deceive any of her investors. She also alleged that her ex-partner Ramesh “Sunny” Balwani – who was president and COO of Theranos – was abusive and controlling.
Balwani has denied these abuse allegations but was found guilty of fraud in July as per the BBC.
The bizarre saga inspired the TV series The Dropout starring Amanda Seyfried.
