Ms. Holmes was found guilty of two counts of fraud and one count of conspiracy to commit fraud, after a years-long trial that exposed the many troubling secrets behind her former startup, Theranos. She will now likely spend the next eleven years behind bars, after being sentenced to an effective sentence of 6-and-a-half years in prison on Thursday.
Holmes’ lawyers argue that she is not a flight risk and that she would be able to keep up with her court appearances if freed on bail. But Judge Davila disagreed, citing Holmes’ history of deception and blaming her for duping people out of millions of dollars.
The court has not found substantial reason to keep Davila out of prison, and so she will be sent to jail. However, because of her lack of a criminal record and her cooperation with authorities in the case against Holmes, she is seen as a low risk to the community.
Investigators allege that Holmes used secretive bankruptcy proceedings to subsidize her lavish lifestyle, including extensive expenditures on luxury cars and designer clothes. The fraudsters also say that she falsified invoices to make it look like her company was making money when in reality the company was hemorrhaging cash.
The Valley has long been home to some of the most innovative startups in the world, but Theranos’ ascent to become one of them exemplifies the dangers of taking on too much. The company claimed that its technology could revolutionize blood testing by making it more accessible and eliminating the need for intravenous blood draws, which were seen as necessary because conventional tests use so much blood. However, despite having a massive valuation and high-profile board members, Theranos’ technology never worked as advertised and the company is now preparing for prison for fraud. With so many high-profile examples of startup failures these days, it’s important to be aware of what can go wrong before investing in a new business idea
