Elizabeth Holmes, the founder of US startup Theranos, which offered fast and low-cost blood tests, was found guilty of fraud and sentenced to more than 11 years in prison on Friday.
According to media reports citing court documents, a court in San Jose, California found Holmes guilty of three counts of fraud and one count of conspiracy after she allegedly deceived investors about the presumed efficacy of her company’s blood-testing technology. Holmes was also ordered to pay a $400 million fine.
“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,” the judge said while handing down the sentence, as cited by Reuters.
Holmes founded Theranos, which produced instant blood testing devices, in 2003. The technology became popular, and by 2015, Theranos’ market capitalization soared to around $9 billion. Holmes became the world’s youngest female billionaire, with Forbes estimating her fortune at $4.5 billion.
Shortly after the startup’s launch, however, patients began to complain about errors in Theranos devices, and by 2015, reports of fraudulent activity at the company started to appear in the media, with whistleblowers accusing it of deceiving investors and customers about the capabilities of the technology. Following the scandal, Theranos was forced to shut down in 2018.
Prosecutors initially asked for Holmes to be sentenced to 15 years in prison and fined $800 million, reports indicate. Her lawyers asked for the sentence to be lowered to 18 months.
She will likely start serving her sentence in April next year, as she is currently expecting a child. Holmes’ lawyers are now expected to file an appeal and ask the judge to allow her to remain free on bail during the appeal time.
Forbes now estimates the value of Holmes’ assets at $0.
Theranos’ former operating chief, Ramesh ‘Sunny’ Balwani, was also found guilty of criminal fraud charges earlier this year. His sentencing is reportedly set for next month.
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