SAN JOSE, Calif. (Reuters) -A California judge sentenced Theranos founder Elizabeth Holmes to 135 months in prison for defrauding investors in her now-defunct blood testing startup that was once valued at $9 billion.
U.S. District Judge Edward Davila in San Jose, Calif., sentenced Holmes on three counts of investor fraud and one count of conspiracy. A jury convicted Holmes, 38, in January following a trial that spanned three months.
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.”
But Holmes’ attorney Kevin Downey urged leniency for Holmes at the hearing, saying that unlike someone who commited a “great crime” she was not motivated by greed.
Holmes had asked in court papers for a more lenient sentence of 18 months of home confinement, followed by community service, urging the judge not to make her a “martyr to public passion.”
Prosecutors said at trial that Holmes misrepresented Theranos’ technology and finances, including by claiming that its miniaturized blood testing machine was able to run an array of tests from a few drops of blood. The company secretly relied on conventional machines from other companies to run patients’ tests, prosecutors said.
Ahead of her sentencing, prosecutors had said a 15-year sentence was necessary to deter Holmes and others from fraud.
Her crimes “damaged the trust and integrity” on which Silicon Valley’s startup economy relies, they said.
The federal probation office had recommended a 9-year prison sentence, according to court papers.
Once valued at $9 billion, 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.
(Reporting by Jody Godoy in New York and Dan Levine in San Jose;Editing by Noeleen Walder and Diane Craft)
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