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Elizabeth Holmes sentenced to greater than 11 years in jail for Theranos fraud By Reuters

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© Reuters. FILE PHOTO: Theranos founder Elizabeth Holmes and her household go away the federal courthouse after attending her fraud trial in San Jose, California, U.S. January 3, 2022. REUTERS/Brittany Hosea-Small/File Picture

By Jody Godoy and Dan Levine

SAN JOSE, Calif. (Reuters) -A California decide sentenced Theranos founder Elizabeth Holmes to 11 years and three months in jail for defrauding traders in her now-defunct blood testing startup that was as soon as valued at $9 billion.

U.S. District Decide Edward Davila in San Jose, Calif., sentenced Holmes on three counts of investor fraud and one depend of conspiracy. A jury convicted Holmes, 38, in January following a trial that spanned three months.

Holmes, wearing a darkish shirt and black skirt, hugged her mother and father and her accomplice after the sentence was handed down.

Throughout the listening to, Holmes cried as she mentioned she was “devastated” by her failures and would have accomplished many issues otherwise if she had the possibility.

“I’ve felt deep disgrace for what individuals went by as a result of I failed them,” she mentioned.

Earlier than handing down the sentence, Davila referred to as the case “troubling on so many ranges,” questioning what motivated Holmes, a “sensible” entrepreneur, to misrepresent her firm to traders.

“This can be a fraud case the place an thrilling enterprise went ahead with nice expectations solely to be dashed by untruths, misrepresentations, plain hubris and lies,” he mentioned.

The decide set Holmes’ give up date for April. Her legal professionals are anticipated to ask the decide to permit her to stay free on bail throughout her enchantment.

Assistant U.S. Lawyer Jeff Schenk informed the decide earlier than he handed down the sentence {that a} 15-year sentence could be “making a press release that the ends do not justify the means.”

Holmes’ lawyer Kevin Downey sought residence confinement for Holmes, saying leniency was justified as a result of not like somebody who dedicated a “nice crime” she was not motivated by greed.

The federal probation workplace had really useful a 9-year jail sentence, in line with court docket papers.

Prosecutors and an lawyer for Holmes declined to remark as they left court docket.

Prosecutors mentioned at trial that Holmes misrepresented Theranos’ expertise and funds, together with by claiming that its miniaturized blood testing machine was capable of run an array of assessments from a number of drops of blood. The corporate secretly relied on typical machines from different corporations to run sufferers’ assessments, prosecutors mentioned.

Holmes testified in her personal protection, saying she believed her statements had been correct on the time.

Although she was convicted on 4 counts, Holmes was acquitted on 4 different counts alleging she defrauded sufferers who paid for Theranos assessments.

As soon as valued at $9 billion, Theranos Inc promised to revolutionize how sufferers obtain diagnoses by changing conventional labs with small machines envisioned to be used in houses, drugstores and even on the battlefield.

Forbes dubbed Holmes the world’s youngest feminine self-made billionaire in 2014, when she was 30 and her stake in Theranos was value $4.5 billion.

However the startup collapsed after a sequence of articles within the Wall Road Journal in 2015 questioned its expertise.

Holmes is predicted to problem her sentence and Davila’s rulings upholding her convictions on the ninth U.S. Circuit Courtroom of Appeals.

Earlier than handing down the sentence, Davila requested if any victims of Holmes’ fraud had been in court docket.

Alex Shultz, whose son Tyler Shultz labored at Theranos and whose father, former U.S. Secretary of State George Shultz, invested within the firm, informed the decide how a member of the family as soon as heard Holmes describe her supposedly revolutionary expertise.

“What is the hitch?'” the member of the family requested Holmes,

in line with Shultz.

“There isn’t a hitch,” Holmes responded.

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