SAN JOSE, Calif. The criminal prosecution that exposed the blood-testing scam at the heart of Elizabeth Holmes’ Theranos firm is entering its final phase as Holmes prepares to report to prison next week.
The 11-year sentence is just dessert for the starry-eyed lady who rose to the top of Silicon Valley’s business world despite the “tech bro” culture’s bias towards women, only to be revealed as a phony. Along the process, Holmes became symbolic of the obnoxious boasting that permeates the startup community.
The federal judge who oversaw her trial seems perplexed by the numerous unanswered issues regarding her motivations. And Holmes’ supporters keep asking if the sentence is proportional to the crime.
She was convicted of fraud and conspiracy at the young age of 39, and it seems likely that she will be known as Silicon Valley’s Icarus.
Some of her supporters believe federal prosecutors unfairly singled her out in their pursuit of bringing down a prominent practitioner of fake-it-til-you-make-it, the tech industry’s brand of self-promotion that sometimes veers into exaggeration and blatant lies to raise money.
On May 30, Holmes will begin serving the sentence that will force her to spend time away from her two children, a son whose birth in July 2021 delayed the start of her trial and a 3-month-old girl conceived after her conviction.
Bryan, Texas, is around 100 miles (160 km) northwest of her hometown of Houston and is where she is slated to serve her time. The judge who condemned Holmes suggested the prison, but the location where she would be housed has yet to be made public.
Many people think she is dishonest and should go to jail for selling a device that, she said, could detect hundreds of diseases and other health problems with just a few drops of blood collected from a finger prick.
The criminal prosecution that exposed the blood-testing scam at the heart of Elizabeth Holmes’ Theranos firm is entering its final phase.
The technique was less effective than advertised. Instead, the results of Theranos’s tests were extremely unreliable, potentially jeopardizing patients’ lives, which is why she should be charged.
Holmes had secured over $1 billion from several sophisticated investors, including Oracle co-founder Larry Ellison and media magnate Rupert Murdoch before those lies were exposed in a series of blockbuster articles in The Wall Street Journal beginning in October 2015. She was convicted of fraud and had to pay $452 million in compensation because of the victims she defrauded.
At one time, Holmes’ Theranos investment made her a paper billionaire worth $4.5 billion. She never sold any of her shares in the company, but the trial evidence showed that she enjoyed the perks that came with her newfound celebrity and money. She and her children’s father, William “Billy” Evans, even resided in a mansion in Silicon Valley while the trial was going on.
Trial evidence recording Holmes’ efforts to prevent the Journal’s research from being published lent credence to the allegation that she was running an extensive fraud. John Carreyrou, the reporter who broke the blockbuster story, attended the trial because of the pressure from the campaign. He sat directly in front of Holmes as she testified.
Holmes approved surveillance aimed at intimidating employees who uncovered the vulnerabilities in Theranos’ blood testing system. Tyler Shultz, the grandson of former Secretary of State George Shultz, was one of the whistleblowers Holmes met and persuaded to join the Theranos board.
Alex Shultz revealed at his daughter’s sentencing that Tyler Shultz slept with a knife beneath his pillow because he was terrified of Holmes’ attempts to silence him.
Holmes’ defenders insist she never intended any harm and was made a scapegoat by the FBI and DOJ. They claim she is just as guilty of using hyperbolic advertising as Elon Musk, another prominent tech entrepreneur who has constantly exaggerated the capabilities of Tesla’s self-driving cars.
Some have argued that Holmes was treated unfairly because she was a woman and because her trial transformed her into a modern-day Hester Prynne, the protagonist of the 1850 classic “The Scarlet Letter.”
Throughout seven days of often compelling testimony in her defense, Holmes doggedly maintained her innocence, causing thousands to queue shortly after midnight to acquire one of the few dozen seats in the San Jose courtroom.
The criminal prosecution that exposed the blood-testing scam at the heart of Elizabeth Holmes’ Theranos firm is entering its final phase.
While attending Stanford University, Holmes was the victim of sexual assault, an experience she had never fully recovered. She said that her former lover and Theranos conspirator, Ramesh “Sunny” Balwani, had subjected her to a cycle of emotional and sexual abuse and that his oppressive control had clouded her judgment.
Jeffrey Coopersmith, Balwani’s attorney, refuted the claims during the trial. Coopersmith attempted, but failed, to portray his client, Balwani, as Holmes’ pawn in the later trial.
Balwani, 57, was found guilty of fraud and conspiracy and is currently serving nearly 13 years in prison.
U.S. District Judge Edward Davila seemed as perplexed as the rest of us when it came time to sentence the pregnant Holmes in November.
“This is a fraud case where an exciting venture went forward with great expectations and hope, only to have them dashed by untruth, misrepresentations, hubris, and plain lies,” Davila bemoaned as Holmes stood before him. “I suppose we step back and look at this, and we think, what is the pathology of fraud?”
The judge also recalled when Silicon Valley was primarily orchards planted by immigrants. That was before Palo Alto, where Theranos is headquartered, gave way to the tech boom in the late 1930s, when William Hewlett and David Packard launched the corporation that would bear their names in a one-car garage.
You’ll remember the incredible innovation of those two men in that modest garage,” Davila told the attentive courtroom. “No flashy cars or opulent lifestyle, just a commitment to doing good, honest work for the benefit of others. And that, I can only hope, will be Silicon Valley’s lasting legacy and standard operating procedure.
SOURCE – (AP)
