Tech: 11 years in prison for the founder of start-up Theranos

Former Silicon Valley star Elizabeth Holmes was sentenced on Friday to just over 11 years in prison for fraud in managing her startup Theranos, which promised a revolution in health diagnostics. The accused, pregnant and mother of a boy, has until April 27 to begin sentencing, Judge Edward Davila said.

After four months of a media court trial in San Jose, Calif., she was found guilty in January of lying to investors about her company’s actual progress. “I assume, before you, my responsibilities for Theranos,” she said at the hearing on Friday, sobbing, shortly before sentencing. “I’m devastated by my failures,” she added. “Not a day has gone by in years that I haven’t been deeply touched by what people went through because of my mistakes.”

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When the sentence was pronounced, the partner and parents of the former leader, now 38 years old, came to hug her. The prosecution had asked for fifteen years in prison and wanted her to return 800 million dollars to the victims. The defense had asked for a maximum sentence of one and a half years.

Her lawyer said on Friday that she would appeal.

Manipulation and lies

“The tragedy in this case is that Ms Holmes is brilliant” and that she has managed to find a place for herself in a world “dominated by male egos”, noted the judge. But there was also enough evidence of “manipulations and lies used to do business”, he added.

The magistrate explained that he did not take into account Elizabeth Holmes’ apparent disregard for the potential risks to patients, in so far as she was acquitted of fraud charges against them. Her failure to acknowledge her responsibility by pleading not guilty, on the other hand, worked against her, he said.

The judge also said that he did not take into account all the losses generated by the fall of his company, but only part of those collected by ten investors, that is, 121 million dollars. The amount you will have to return to investors will be decided later. She will not be fined.

Prosecutor Jeff Schenk argued in court that the sentence should reflect the idea that “the end does not justify the means”. This is not “punishment for Mrs. Holmes’s dream” but punishment for “the decision to deceive investors”, he insisted. Her lawyer, Kevin Downey, countered that her client was never motivated by greed: she could have gotten rich, but she never sold stock, using the money to build her technology.

beautiful story

Elizabeth Holmes founded Theranos in 2003, aged just 19, with the idea of ​​making a blood diagnostic tool that was quick, painless and cheaper than traditional labs. With the help of a very elaborate history and appearance, in a few years she managed to win the trust of luminaries and raise funds from prestigious investors attracted by the profile of this young woman, a rarity in the male world of Californian engineers.

“I thought it would be the next Apple,” summarized Adam Rosendorff, who was once director of the company’s laboratory, during the trial.

The story was beautiful. As a child, she hated injections. So she wanted to invent a machine that would perform hundreds of blood diagnoses from a single drop of blood taken from a fingertip. Media tycoon Rupert Murdoch, former Secretary of State Henry Kissinger and Jim Mattis, Donald Trump’s defense minister, have already been convinced by Elizabeth Holmes’ project. At its peak, the company was valued at nearly $10 billion.

But in 2015, the scandal came to a head when the Wall Street Journal revealed that the machine never worked as it was supposed to. Ramesh “Sunny” Balwani, former partner of Elizabeth Holmes and director of operations at Theranos, was tried separately and was also found guilty of fraud. His sentence is due on December 7.

(With AFP)

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