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Prosecutor urges California federal judge to give Holmes 15-year sentence

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2022-11-18T21:47:42Z

Theranos founder Elizabeth Holmes arrived on Friday at a federal courthouse in San Jose, Calif., where she is scheduled to be sentenced for defrauding investors in her now-defunct blood-testing startup.

Theranos founder Elizabeth Holmes should serve 15 years in prison, a prosecutor told a California federal judge on Friday as Holmes awaited sentencing on charges of defrauding investors in her now-defunct blood testing startup.

Holmes, wearing a black skirt and dark blouse, sat in court facing U.S. District Judge Edward Davila, who will sentence her 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.

Assistant U.S. Attorney Jeff Schenk told the judge that by handing down a 15-year sentence, he would be “making a statement that the ends don’t justify the means.”

“Day after day, week after week, month after month and finally year after year, Ms. Holmes made the decision to defraud her investors,” he said.

Defendants in other major fraud cases have received sentences ranging from 10 to 25 years, prosecutors said in court papers. Examples included Enron CEO Jeffrey Skilling who was sentenced to 14 years in prison for his conviction on charges stemming from the company’s spectacular collapse.

Holmes’ attorney Kevin Downey urged leniency for Holmes at the hearing, saying that unlike someone who committed a “great crime” she was not motivated by greed. Holmes did not cash in her multibillion dollar stake in Theranos, he said.

Holmes has asked in court papers for a more lenient sentence of 18 months of home confinement, followed by community service.

More than 130 friends, family, investors and former Theranos employees submitted letters to Davila urging leniency.

They included U.S. Senator Cory Booker of New Jersey, who said Holmes “can, despite mistakes, make the world a better place.”

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.

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.

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.

But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned its technology.

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Theranos founder Elizabeth Holmes arrives with her family and partner Billy Evans to be sentenced on her convictions for defrauding investors in the blood testing startup at the federal courthouse in San Jose, California, U.S., November 18, 2022. REUTERS/Brittany Hosea-Small

Theranos founder Elizabeth Holmes arrives with her family and partner Billy Evans to be sentenced on her convictions for defrauding investors in the blood testing startup at the federal courthouse in San Jose, California, U.S., November 18, 2022. REUTERS/Brittany Hosea-Small

Theranos founder Elizabeth Holmes and her family leave the federal courthouse after attending her fraud trial in San Jose, California, U.S. January 3, 2022. REUTERS/Brittany Hosea-Small/File Photo
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