Elizabeth Holmes awaits sentencing for her crimes at Theranos

Michael Liedtke, The Related Press

Posted Friday, November 18, 2022 05:52 AM EST

A federal choose will determine Friday whether or not disgraced Theranos CEO Elizabeth Holmes ought to serve a prolonged jail time period for defrauding buyers and endangering sufferers whereas promoting pretend blood-testing know-how.

Holmes’ sentencing in the identical courtroom in San Jose, Calif., the place she was convicted of 4 counts of investor fraud and conspiracy in January, marks the climax of a saga that has been chronicled in an HBO documentary and an award-winning Hulu TV sequence about her meteoric rise and the deadly fall.

U.S. District Choose Edward Davila will take middle stage as he considers the federal authorities’s suggestion that Holmes, 38, be despatched to federal jail for 15 years. That is barely lower than the utmost 20-year sentence she might face, however for much longer than her authorized workforce’s try to restrict her jail time period to not more than 18 months, ideally underneath home arrest.

Her attorneys argued that Holmes deserved lenient therapy as a well-meaning entrepreneur who’s now a faithful mom with one other youngster on the best way. Their arguments have been supported by greater than 130 letters from household, mates and former colleagues praising Holmes.

A probation report additionally submitted to Davila beneficial a nine-year sentence for Holmes.

Prosecutors are additionally asking Holmes to pay $804 million in restitution. The quantity covers many of the almost $1 billion Holmes has raised from a listing of refined buyers that features software program magnate Larry Ellison, media mogul Rupert Murdoch and the Walton household behind Walmart.

Whereas wooing buyers, Holmes tapped a robust Theranos board that included former U.S. Protection Secretary James Mattis, who testified in opposition to her at her trial, and two former U.S. secretaries of state, Henry Kissinger and the late George Shultz, whose son filed an announcement condemning Holmes for developing with a scheme that performed Schultz “for a idiot.”

Davila’s sentence – and Holmes’ reporting date for potential jail time – could possibly be affected by the previous entrepreneur’s second being pregnant in two years. After giving start to her son shortly earlier than her trial started final yr, Holmes turned pregnant in some unspecified time in the future whereas out on bail this yr.

Though her legal professionals didn’t point out the being pregnant in an 82-page temporary filed with Davila final week, the being pregnant was confirmed in a letter from her present accomplice, William “Billy” Evans, urging the choose to point out mercy.

Within the 12-page letter, which included photos of Holmes entertaining her one-year-old son, Evans talked about that Holmes had participated in a swim on the Golden Gate Bridge earlier this yr whereas she was pregnant. He additionally famous that Holmes suffered a case of COVID in August whereas pregnant. Evans didn’t reveal Holmes’ due date in his letter.

Duncan Levine, a former federal prosecutor who’s now a protection legal professional, predicted that the being pregnant is not going to have an effect on Davila’s sentencing resolution, however he expects the choose to permit her to stay free till the newborn is born.

“She’s going to now not be a flight threat after being sentenced whereas awaiting sentencing,” Levin stated. “We’ve to mood our sentences with some measure of humanity.”

The being pregnant makes Davila extra more likely to be criticized whatever the sentence he fingers down, predicted Amanda Kramer, one other former federal prosecutor.

“There is a fairly wholesome debate about what sort of penalty is required to have an effect on general deterrence to ship a message to others who’re considering of crossing that line from exhausting promoting into materials misrepresentation,” Kramer stated.

Federal prosecutor Robert Leach emphatically stated Holmes deserved a stiff sentence for masterminding the rip-off, which he described as one of the egregious white-collar crimes ever dedicated in Silicon Valley. In a scathing 46-page memo, Leach informed the choose he has a chance to ship a message that curbs the hubris and hyperbole fueled by the know-how growth of the previous decade.

Holmes “satisfied her buyers {that a} younger, dynamic entrepreneur had modified well being care,” Leach wrote. “And thru her deception, she gained spectacular fame, adoration and billions of {dollars} in wealth.”

Though the jury acquitted Holmes on 4 counts of fraud and conspiracy associated to sufferers taking Theranos blood exams, Leach additionally requested Dávila to think about the well being threats posed by Holmes’ habits.

Holmes’ legal professional, Kevin Downey, painted her as a selfless visionary who spent 14 years of her life making an attempt to revolutionize well being care with know-how that was supposed to have the ability to scan a whole lot of illnesses and different meals with only a few drops of blood.

Though proof introduced throughout her trial confirmed that the exams produced extremely unreliable outcomes that would have misled sufferers, her legal professionals argued that Holmes by no means stopped making an attempt to excellent the know-how till Theranos collapsed in 2018. In addition they identified that Holmes by no means bought any of her Theranos inventory — a stake valued at $4.5 billion in 2014 when Holmes was hailed as the following Steve Jobs on enterprise journal covers.

Defending in opposition to the legal costs left Holmes with “a big debt from which she is unlikely to get better,” Downey wrote, suggesting she is unlikely to ever pay any restitution Davila may order as a part of her sentence.

“Holmes shouldn’t be a hazard to society,” Downey wrote.

Downey additionally requested Davila to look into the alleged sexual and emotional abuse Holmes suffered whereas in a romantic relationship with Ramesh “Sunny” Balwani, who turned a Theranos investor, CEO and finally confederate in her crimes. Balwani, 57, is because of be sentenced on December 7 after being convicted in a July trial on 12 counts of fraud and conspiracy.

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