Elizabeth Holmes will be sentenced this week as Therano’s saga draws to a close

Elizabeth Holmes, Therano’s founder, will be sentenced this week to up to 20 years in prison for her role in the blood-testing company that fell from the heights of Silicon Valley after its fraudulent claims were exposed.

The sentencing will take place in a California courtroom on Friday, after a federal judge denied Holmes’ request for a new trial last week. Holmes had requested a new trial after she said a key prosecution witness apologized for the role he played in her conviction.

That witness, former Therano lab chief Adam Rosendorff, appeared in August at the home Holmes shares with his partner, William Evans, to express his remorse, the founder’s lawyers said in the dismissed motion. Rosendorff later stood by his original testimony and said he had only regrets that Holmes — the mother of a young child — was facing years in prison.

Holmes was convicted in January of four counts of fraud after a nearly four-month trial, in which prosecutors called 29 witnesses to describe her 15-year reign as CEO.

She will likely face significant time behind bars, experts say. Federal sentencing guidelines suggest more time for larger-dollar fraud and evidence in court for the charges she was convicted of, including wire fraud totaling more than $140 million.

“My best guess based on how sentencing guidelines work is that she’ll get somewhere within four to five years,” said James Melendres, a white-collar defense attorney and former federal prosecutor. “But I wouldn’t be surprised if she received a sentence significantly higher than that – maybe even over 10 years.”

During her trial, the founder accused her co-conspirator and former romantic partner Sunny Balwani of abuse, claims he has denied. In a separate trial, Balwani was convicted of all 12 fraud charges brought against him for his role in the venture. He faces his own sentence in December.

Lawyers for Holmes have cast her as a scapegoat who overcame a toxic relationship to become a loving mother in a bid to avoid a lengthy prison sentence. In an 82-page document filed the week before the verdict, they argued that it is unnecessary to send Holmes to prison, in part because she has already been stigmatized by intense media coverage that has turned her into a “caricature to be mocked and vilified.”

Holmes’ lawyers argued that she should be sentenced to no more than 18 months. “We acknowledge that this may seem like a tall order given the public perception of this case, especially when Ms. Holmes is seen as the caricature, not the person,” the filing said.

On Friday, however, prosecutors requested that Holmes be sentenced to 15 years and $800 million in restitution, arguing that it would “reflect the seriousness of the crimes, provide just punishment for the crimes and deter Holmes and others.”

The verdict will mark the end of Holmes’ journey with Theranos, a company she dropped out of Stanford to found at age 19. She promised a revolutionary technology that could run hundreds of health tests on just a drop of blood, despite little scientific evidence that it worked, creating partnerships with major health care companies like Walgreens.

Holmes appeared at conferences and on magazine covers as Theranos took Silicon Valley by storm, raising hundreds of millions of dollars from big-name investors such as media mogul Rupert Murdoch, former Secretary of State Henry Kissinger and former Defense Secretary James Mattis, who went on to testify against her .

But cracks began to appear in 2015 when Wall Street Journal reporting revealed that its internal tests had apparent inaccuracies and that the company was performing other tests using traditional blood-drawing methods and outside laboratories.

Holmes, 38, was charged in 2018 with 12 counts of fraud for his role in the company. The trial began in 2021 after delays after Holmes revealed she was pregnant. The trial sparked a media frenzy outside the San Jose courthouse where Holmes testified that she did not knowingly commit fraud and that she believed the company’s promise.

Holmes was convicted of four charges, including one count of conspiracy to defraud investors and three counts of wire fraud against investors, but was acquitted on three counts involving patients receiving false test results. The jury remained deadlocked on three of the charges.

The conviction and sentence could mark a new era for Silicon Valley, an industry that for years has fostered a culture of “fake it till you make it,” where founders must make big promises, often with little evidence, to collect interest and money. for their startups.

The fact that the government was able to prosecute Holmes and Balwani is “significant,” said Neama Rahmani, a former federal prosecutor and co-founder of West Coast Trial Lawyers.

“Executives are going to be a lot more careful about what they say during the start-up phase, what they say to investors,” he said. “This shows that the government will hold you accountable.”

The Associated Press contributed reporting

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