Trial of Theranos CEO Elizabeth Holmes: Prosecutors are demanding 15 years in prison
Federal prosecutors have asked a judge to sentence disgraced Theranos CEO Elizabeth Holmes to 15 years in prison, arguing she deserves a lengthy sentence because her massive scheme defrauded investors of hundreds of millions of dollars by stealing falsely convinced them that their company had developed a revolutionary blood testing device.
Prosecutors called the case “one of the most serious white-collar crimes Silicon Valley or any district has seen,” and vehemently dismissed defense attorneys’ characterization that Holmes was unjustly victimized, in part through media coverage.
Holmes is expected to appear in federal court in San Jose, California, for sentencing on November 18, nearly a year after she was convicted of three counts of wire fraud and one count of conspiracy to commit fraud. She faces up to 20 years in prison for each charge.
“She has repeatedly preferred lies, hype and the prospect of billions of dollars to patient safety and fair dealings with investors,” Assistant US Attorney Robert S. Leach wrote in a 46-page brief filed Friday. “Elizabeth Holmes’ crimes had not failed, they were lies – lies in the most serious context where everyone needed them to tell the truth.”
Holmes’ lawyers filed an 82-page document late Thursday asking for a lenient sentence of no more than 18 months and saying her reputation was permanently tarnished, turning her into a “caricature who is being ridiculed and slandered.” should”.
In addition to demanding that Holmes receive a lengthy prison sentence, prosecutors are seeking $803,840,309 in compensation from the 38-year-old for her role in the year-long program that has made her one of the most respected and immensely wealthy entrepreneurs in Silicon Valley made United States.
“She capitalized on her investors’ hopes that a young, dynamic entrepreneur had transformed healthcare. She leveraged the credibility of her illustrious board,” Leach wrote. “And through her deception, she achieved spectacular fame, adoration, and billions of dollars in wealth.”
Leach also pointed out how after Wall Street Journal reporter John Carreyrou exposed the scheme, Holmes “attacked him along with his sources” and desperately tried to pin the blame on others.
“At trial, she blamed her COO (and longtime friend), her board of directors, her scientists, her business partners, her investors, her marketing firm, her attorneys, the media – everyone but herself,” Leach wrote.
The company’s former chief operating officer, 57-year-old Ramesh “Sunny” Balwani, was convicted in a separate trial in July of 12 counts of investor and patient fraud. He is due to be sentenced on December 7th.
And Leach wrote that actual patients’ health was endangered by what Holmes had done.
“When the money ran out, she went into the market with an unproven and unreliable medical device,” he wrote. “When her lead assay developer quit when Theranos was launched, she frostily told the scientist, ‘She has a promise to deliver to the customer, she has no choice but to proceed with the launch.'”
Holmes’ attorneys have argued that if US District Judge Edward Davila decides to send her to prison, she deserves a light sentence because she poses no danger to the public and has no criminal record.
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