SAN JOSE, Calif. (KRON) — Elizabeth Holmes, once the youngest self-made billionaire in America, could be facing up to two decades of prison time. Today, the famous felon says she’s broke.
Holmes will be sentenced on Friday by U.S. District Court Judge Edward Davila. According to a sentencing recommendation submitted by prosecutors, the disgraced ex-CEO deserves to be locked up for 15 years and pay more than $800 million in restitution to defrauded victims.
Court documents filed by Holmes’ defense attorneys on Wednesday assert that Holmes does not deserve prison time, nor a hefty restitution. Vilifying Holmes as a greedy white-collar criminal is unfair and untrue, her defense team claims.
When Holmes walks into the federal courthouse in San Jose Friday morning, it may be her last moment of freedom. Holmes, 38, could be immediately taken into custody after the judge announces his highly-anticipated sentencing decision, legal analyst Michele Hagan told KRON4.
At her most recent court appearance in October, Holmes appeared to be pregnant with her second child. She gave birth to her first child just weeks before her fraud trial began in 2021.
A prison cell will be a stark change for Holmes. She’s spent the past year living in a Woodside mansion with Billy Evans, the father of her baby.
When Holmes dropped out of Stanford University at age 19, she envisioned herself as the next Steve Jobs of Silicon Valley, according to her testimony. Holmes founded a biotech startup company, Theranos, proclaiming her new technology could run any blood test with just a few drops of blood.
By 2015, Holmes was already a “Fortune” magazine cover girl and America’s youngest self-made billionaire. Her desire for money, fame, and adoration fueled one of the biggest fraud scandals in Silicon Valley history, prosecutors said.
Theranos raised $945 million from investors based on lies about the capabilities of its blood testing machines, prosecutors said. Holmes’ lies to investors were unraveled to jurors who ultimately convicted her on four federal counts of conspiracy and fraud.
Holmes’ defense attorneys wrote in court documents this week, “Ms. Holmes built Theranos for indisputably good reasons. She works every day to be a good friend, partner, mother, and citizen who contributes to the positive well-being of those around her. Ms. Holmes was not driven by greed, as the government apparently cannot help but persist in suggesting despite the overwhelming evidence to the contrary.”
In Holmes’ request for leniency, defense attorneys urged the judge to only sentence Holmes to between 0-18 months in prison. More than 100 of her supporters wrote letters to the judge defending her character and intentions.
In one letter, Alex Moore, an investor at the investment firm 8VC, wrote, “Failures are a part of the game in Silicon Valley. We can’t punish our innovators in society or there will be no innovation.”
In another letter, Stanford University engineering professor Channing Robertson wrote, “Her attributes of compassion for others, her hope to make this a better world, her empathy for her teams at Theranos while expecting the best from them, her desire to give and not take, all combine to imbue her with qualities that inspired many young scientists and engineers to join with her in a crusade that could have, and would have improved the quality of life for all.”
Defense attorneys said the letters are evidence that Holmes is a good person with good intentions.
“As the scores of letters from people who know Ms. Holmes make clear, the government’s caricature of Ms. Holmes does not reflect who she really is. The government fails to see Ms. Holmes’ humanity,” defense attorneys wrote.
During Holmes’ 3-month-long trial, ex-Theranos employees testified that they tried to warn their boss that the company’s machines produced inaccurate blood test results. Holmes testified in self-defense. Holmes said she was unaware of Theranos’ technology flaws and claimed she was controlled by her abusive ex-boyfriend, Sunny Balwani.
Balwani, a former COO of Theranos, was convicted on 12 counts of fraud and conspiracy.
“While the public narrative of Theranos casts it as an entirely fraudulent enterprise, … Ms.
Holmes championed the work of the hundreds of people at Theranos who believed that they had made meaningful advancements in medical technology,” defense attorneys wrote.
Prosecutors said Holmes’ sentence should be no lighter than 15 years to send a clear message to future Silicon Valley startups — white collar criminals won’t walk away with a slap on the wrist. Significant prison time could send a message to entrepreneurs who “fake it ’till you make it.”
Defense attorneys took issue with even calling Holmes a white collar criminal. “Ms. Holmes was not convicted of ‘white collar crime’ in the abstract. She was convicted of defrauding certain sophisticated investors on a particular set of facts,” the defense wrote in court documents.
The defense wrote, “Ms. Holmes is punished every day for the offense conduct, has been for years, and will be for the rest of her life. Given her public notoriety, substantial scrutiny would undoubtedly attend any inventions or contributions by Ms. Holmes in the future.”
Ordering Holmes to pay millions in restitution is not reasonable, the defense asserted. Her attorneys wrote, “The reason Ms. Holmes has essentially no assets is that she was barely an adult when she left Stanford to start the company, she received a regular salary and did not cash out her shares, she has been unable to work since 2018, she was unable to invest what assets she did have because her trading accounts were repeatedly closed by financial institutions due to the indictment, and she has incurred substantial expenses, including legal fees, over the course of this ordeal.”