SAN JOSE, California – (CNN) — On Friday, Elizabeth Holmes, a former star in Silicon Valley, will appear in a federal courthouse in this city to beg for leniency during her sentencing hearing. This will most likely be the final chapter in the years-long drama of Theranos, the blood-testing firm she founded. It is anticipated that the prosecution will argue that she should spend a sentence of fifteen years in prison.
The day of Holmes’s judgment comes after a jury found her guilty on all four counts of defrauding investors out of hundreds of millions of dollars by making false and misleading claims about what her supposedly ground-breaking technology could do with just a few drops of blood. The jury’s decision led to Holmes’s conviction. It found out that she was using conventional laboratory testing equipment behind the scenes.
The valuation of Theranos was projected to be $9 billion in 2014, which was greater than the market capitalization of both Uber and Spotify at the time. Not much longer after that, the company started falling apart.
The fall from grace of Holmes, an eccentric leader in the technology industry who was once compared to Steve Jobs and attracted fawning attention in the media, is one of the most spectacular examples of a business leader’s fall from grace in recent history.
In court documents filed before the hearing, federal prosecutors referred to Holmes’ crimes as “among the most substantial white-collar offenses Silicon Valley, or any other district, has seen.” However, defense attorneys for Holmes argued that she has shown remorse and that she is being punished for nothing more than a failed startup.
The attorneys for Holmes’ defense are requesting that he not go to jail but rather serve his sentence under home detention conditions. However, Holmes’ legal team also stated in the court documents that she should not spend any longer than 18 months in jail if it is determined that her detention is necessary. This stands in stark contrast to the prosecutor’s requested sentence of 15 years in jail, which is only a few months short of the maximum prison sentence she may face under federal guidelines, which is 20 years.
U.S. District Judge Ed Davila, who presided over Holmes’ trial as well as the separate trial of Theranos’ No. 2 executive, Ramesh “Sunny” Balwani, who was also convicted of fraud and is scheduled to be sentenced the following month, is the only person who has the authority to make a decision regarding this matter.
In January, the jury that was deliberating Holmes’ case came back with a finding that was less than clear. While they acquitted her of fraud charges relating to Theranos patients who were harmed, they found her guilty of fraud charges related to investors who were deceived.
The prosecution, on the other hand, has argued that the patients who received inaccurate blood test results as a result of the company’s faulty technology represent facts that should be considered “relevant conduct for sentencing purposes.” This means that the patients could still play a role in Davila’s sentence.
The legal team for Holmes turned in a total of 130 letters to the judge on his behalf. These letters came from friends, relatives, and other supporters of Holmes, including Senator Cory Booker of New Jersey, who has been a lifelong friend of Holmes. Booker quoted criminal justice reform advocate and lawyer Bryan Stevenson in the letter that he wrote, saying, “Each of us is more than the worst thing we’ve done.” Booker was referencing Stevenson.
Billy Evans, Holmes’ partner, pleaded for the judge’s mercy in a letter that he sent to the court and detailed the effect that the case has had on his family. Photos of the couple, their son, who is one year old, and their dog, Balto, who the family alleges was murdered by mountain lions are included in the submission. According to what Evans said, Holmes has already paid a hefty price for having to suffer the notoriety that followed the collapse of Theranos under pressure.
The attorneys for Holmes’ defense are requesting that he not go to jail but rather serve his sentence under home detention conditions. However, Holmes’ legal team also stated in the court documents that she should not spend any longer than 18 months in jail if it is determined that her detention is necessary. This stands in stark contrast to the prosecutor’s requested sentence of 15 years in jail, which is only a few months short of the maximum prison sentence she may face under federal guidelines, which is 20 years.
U.S. District Judge Ed Davila, who presided over Holmes’ trial as well as the separate trial of Theranos’ No. 2 executive, Ramesh “Sunny” Balwani, who was also convicted of fraud and is scheduled to be sentenced the following month, is the only person who has the authority to make a decision regarding this matter.
In January, the jury that was deliberating Holmes’ case came back with a finding that was less than clear. While they acquitted her of fraud charges relating to Theranos patients who were harmed, they found her guilty of fraud charges related to investors who were deceived.
The prosecution, on the other hand, has argued that the patients who received inaccurate blood test results as a result of the company’s faulty technology represent facts that should be considered “relevant conduct for sentencing purposes.” This means that the patients could still play a role in Davila’s sentence.
The legal team for Holmes turned in a total of 130 letters to the judge on his behalf. These letters came from friends, relatives, and other supporters of Holmes, including Senator Cory Booker of New Jersey, who has been a lifelong friend of Holmes. Booker quoted criminal justice reform advocate and lawyer Bryan Stevenson in the letter that he wrote, saying, “Each of us is more than the worst thing we’ve done.” Booker was referencing Stevenson.
Billy Evans, Holmes’ partner, pleaded for the judge’s mercy in a letter that he sent to the court and detailed the effect that the case has had on his family. Photos of the couple, their son, who is one year old, and their dog, Balto, who the family alleges was murdered by mountain lions are included in the submission. According to what Evans said, Holmes has already paid a hefty price for having to suffer the notoriety that followed the collapse of Theranos under pressure.
“If you are to know Liz, then you are to know that she is honest, humble, unselfish, and kind beyond what most people have ever experienced,” Evans said. “If you are to know Liz, then you are to know that she is to know that if you are to know her, then you are “Would you kindly let her go free?”
At her most recent court appearance, Holmes, who is 38 years old, could clearly be seen to be carrying a kid for a second time. In the event that Davila hands down a sentence, her pregnancy may affect the timing of when she begins serving her sentence.
Her legal team also brings up the fact that she has been volunteering as a victim counselor for people who have been sexually assaulted. She testified about her experience as a survivor of sexual assault when she took the stand during the trial, and her emotional testimony lasted for days. Holmes herself is a survivor of sexual assault.
Her legal team tries to convince the judge of this point by mentioning a letter that was filed to the court from a technology investor named David Sokol. The defense team for Holmes has argued that the media scrutiny and judicial processes associated to the failure of Theranos is sufficient punishment.
“She does not put anyone in harm’s way in any way. She makes no secret of the fact that she has made certain errors in her business dealings, and despite the fact that she had the potential to benefit financially from them, she did not do so “Sokol wrote. “Her suffering, which includes among other things extreme public ignominy, financial bankruptcy, and the terrifying prospect of incarceration while the mother of a new baby, provides more than adequate deterrence to others,” the author writes. “Her suffering provides more than adequate deterrence to others.”
When it comes to punishment, the quantity of money that was stolen is given more consideration than any other aspect of the case according to federal guidelines. This is something that the prosecutors bring out in the memorandum that they provided to the judge.
Prior to the implosion of the company, Theranos was able to raise close to one billion dollars from a variety of investors, including media magnate Rupert Murdoch and Oracle chief executive Larry Ellison. The maximum amount of loss that can be claimed under these standards, which is more than $550 million, does not even come close to covering the amount of fraud committed by Holmes. In other words, the huge quantity of money that was fraudulently obtained in this instance, according to the arguments made by the prosecutors, leaves no other choice than to imprison Holmes for a period of time that exceeds ten years.
A additional reason that the prosecutors are eager to get Holmes locked up is so that they may send a message to Silicon Valley.
According to the documents filed by the prosecution, “a severe prison sentence will serve not merely to dissuade future startup fraud schemes.” “However, this will also help to rebuild the trust that investors need to have in order to support innovation.”
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