A judge on Friday sentenced disgraced Theranos founder and former CEO Elizabeth Holmes to 11 years and three months in federal prison.
Holmes, who was CEO throughout the company's turbulent 15-year history, duped investors and endangered patients with the company's false claims it had developed a medical device that could detect a multitude of diseases and conditions from a few drops of blood.
The sentence imposed by U.S. District Judge Edward Davila was shorter than the 15-year penalty requested by federal prosecutors but far tougher than the leniency her legal team sought for Holmes, who has a one-year-old son and another child on the way.
Theranos was dashed "by misrepresentations, hubris and just plain lies," the judge said.
"This case is so troubling on so many levels," he said. "What was it that caused Ms. Holmes to make the decisions she did? Was there a loss of a moral compass?"
Holmes, dressed in a dark blouse and black skirt, hugged her parents and her partner Billy Evans after the sentence was handed down.
'Spectacular fame'
Her meteoric rise once landed her on the covers of business magazines that hailed her as the next Steve Jobs. And her deception drew in a list of sophisticated investors that included software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart.
Holmes sobbed as she told the judge she accepted responsibility for her actions.
"I regret my failings with every cell of my body," Holmes said.
Theranos founder and CEO Elizabeth Holmes walks into federal court in San Jose, Calif., Friday. A federal judge sentenced her to 11 years and three months in prison. (Nic Coury/The Associated Press)
The judge set Holmes's surrender date for April. Her lawyers are expected to ask the judge to allow her to remain free on bail during her appeal.
Her sentencing in the same San Jose, Calif., courtroom where she was convicted on four counts of investor fraud and conspiracy in January marks a climactic moment in a saga that has been dissected in an HBO documentary and an award-winning Hulu TV series about her meteoric rise and mortifying downfall.
Prosecutors also want her to pay $804 million US in restitution. The amount covers most of the nearly $1 billion US that Holmes raised from a list of sophisticated investors that included software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart.
The judge on Friday said restitution will be discussed during a later date.
'Spectacular fame'
Assistant U.S. Attorney Jeff Schenk told the judge before he handed down the sentence that a 15-year sentence would be "making a statement that the ends don't justify the means."
Holmes's attorney Kevin Downey sought home confinement, saying leniency was justified because unlike someone who committed a "great crime" she was not motivated by greed.
Earlier, prosecutor Robert Leach had emphatically declared Holmes deserved a severe punishment for engineering a scam that he described as one of the most egregious white-collar crimes ever committed in Silicon Valley. In a scathing 46-page memo, Leach told the judge he had an opportunity to send a message that curbs the hubris and hyperbole unleashed by the tech boom of the past decade.
Holmes "preyed on hopes of her investors that a young, dynamic entrepreneur had changed health care," Leach wrote. "And through her deceit, she attained spectacular fame, adoration and billions of dollars of wealth."
Even though Holmes was acquitted by a jury on four counts of fraud and conspiracy tied to patients who took Theranos blood tests, Leach also asked Davila to factor in the health threats posed by Holmes's conduct.
The legal team for Holmes, who is pregnant and has a one-year-old son, had argued for a sentence of home confinement, while prosecutors sought 15 years. (Jeff Chiu/The Associated Press)
Holmes's lawyer, Kevin Downey, painted her as a selfless visionary who spent 14 years of her life trying to revolutionize health care with a technology that was supposed to be able to scan for hundreds of diseases and other aliments with just a few drops of blood.
Once valued at $9 billion US, 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.
Forbes dubbed Holmes the world's youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.
But the startup collapsed after a series of articles in the Wall Street Journal in 2015 questioned its technology.
At trial, prosecutors said Holmes engaged in fraud by lying to investors about Theranos' technology and finances rather than allowing the company to fail.
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.
Davila had denied Holmes' requests to overturn her convictions, saying they were supported by the evidence at trial.
Now that the sentence has been imposed, Holmes can challenge those rulings and her sentence at the 9th U.S. Circuit Court of Appeals.